The US Defense Logistics Agency (DLA) has outlined plans to procure up to US$40M worth of scandium oxide from Rio Tinto over the next five years.

The initiative forms part of broader US efforts to reduce reliance on China, the world’s leading scandium producer, and address national security concerns.

In October 2024, China imposed export controls on rare earth elements (REEs) and scandium, restricting global supply and prompting Western nations to seek alternative sources. In April 2025, these restrictions were further tightened under China’s Export Control Law and dual-use regulations.

In May 2022, Rio Tinto began producing high-purity scandium oxide at its Rio Tinto Iron and Titanium (RTIT) facility in Québec, Canada, using titanium dioxide waste as feedstock. This marked North America’s first commercial-scale scandium production.

The US DLA selected Rio Tinto as a potential scandium supplier, noting that it was “…the only vendor available capable of fulfilling the government's required product needs at the capacity required for the contract.” Under the five-year contract, the DLA will purchase 6.4t of scandium oxide via fixed-price delivery orders, with approximately 2t planned for the first year.

RTIT has nameplate capacity of 3tpy of scandium oxide; however, thus far, output has fallen short of this level due to limited demand.

Pricing remains the key constraint; Project Blue’s scandium cost tracker shows that Rio Tinto’s costs are significantly higher than those of Chinese producers, requiring customers to be willing to pay a premium for non-Chinese supply. Rio Tinto may have found such a buyer in the US Government.