Australian Rare Earths (ASX:AR3) is now sitting on $750,000 after receiving the first of a larger $5 million payment from Canberra’s Critical Minerals Program (CMP).

Remaining payments (contingent on AR3 matching set milestones) will further validate the company’s Koppamurra Project as far as its operator is concerned. Koppamurra is largely in South Australia, though also crosses the Victorian border.

In the background, the CMP’s rationale for funding the project is one likely familiar to market participants in 2024 (and especially those who play in junior miners). Australia’s vast push to establish its own REE mining and processing capacity rolls on.

Notably, the $5M thrown to AR3’s Koppamurra play is dwarfed by Canberra’s 2024 investment into Arafura Rare Earths’ NT project, which was valued closer to A$1 billion.

Still, the story of an economy decoupling its materials reliance from a vaguely hostile but also not China remains very much in strategic vogue. And for AR3, that can only be a good thing.

Overall, the company is keen to use the total $5M package to advance metwork on samples, launch a pre-feas study and, ultimately, construct a pilot demonstration plant to produce small amounts of REE end product.

Australian Rare Earths, for its part, will match the $5M funding. Under the deal, a demo plant is slated for operation by December 31, 2026 – though the deal doesn’t expire for six months after that.

AR3 on Tuesday noted its own $5M contributing spend could end up coming back to the coffers given it’d likely be eligible for an R&D rebate.

AR3 last traded at 10cps.

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