Australian Strategic Materials Ltd (ASX:ASM) has been awarded a Federal Government Grant to the tune of A$5 million which is set to help the company establish an economical framework for getting its cornerstone Dubbo rare earths project in New South Wales into production.

The grant funding was awarded under the under the government’s International Partnerships in Critical Minerals (IPCM) Program, and will be matched by the company itself, with the cash going towards work that will enable lower capital and shorter implementation pathways for production at Dubbo.

This process will be implemented through the RE Options Assessment and Pilot Program, which will be required for completion before work kicks off under the Front-End Engineering Design (FEED) services contract – awarded to US-owned Bechtel Mining and Metals Inc.

This will then be followed by an updated feasibility study on the construction and operation of Dubbo – which is set to receive a Final Investment Decision in the first half of 2026.

ASM managing director and CEO Rowena Smith said that receipt of this grant represented an acknowledgment of the project’s national and international strategic value.

“With this funding, we will be able to undertake important work to identify lower capital and shorter implementation pathways to unlock rare earth production at the Dubbo Project and ensure a focused completion of our final FEED,” she said.

“Working in collaboration with international strategic partners is critical if Australia is to play a leading role in building alternative, end-to-end rare earths and critical minerals supply chains.

“We thank the Australian Government for their generous support to enhance Australia’s rare earth production and processing capability.”

ASM shares rose on the news, and at 12:58 AEDT, they were trading at 62 cents – a rise of 2.48% since the market opened.

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