Australia's Ardea Resources eyes up to $700 million government funding for nickel project

Feb 5 (Reuters) - Australia's Ardea Resources ARL.AX said on Thursday its Kalgoorlie Nickel project received separate letters of support for a potential funding of up to A$1 billion ($699.90 million) from Export Finance Australia and the U.S. Export-Import Bank.

The funding would provide financing support for Kalgoorlie Nickel's Goongarrie Hub project under development in Western Australia, which is set to supply critical minerals nickel and cobalt, both used in lithium batteries.

Ardea's shares rose 9.6% to A$0.745 by 0058 GMT, hitting their highest level in nearly two weeks while snapping out of three sessions of losses.

The Trump administration has stepped up efforts to secure U.S. supplies of critical minerals, proposing measures such as a floor price mechanism and unveiling new funding for miners to challenge Chinese dominance over supply chains.

Washington this week convened dozens of allied nations to forge a critical-minerals trading bloc and the EU proposed a new U.S.–EU partnership in moves aimed at jointly sourcing and securing minerals outside China.

The promise of government backing has bolstered investor confidence, drawing fresh capital into the sector and pushing several projects closer to construction, laying the foundations for a new wave of domestic supply expected to come online around 2028.

Strong interest from government-backed institutions underscores the Goongarrie Hub's strategic importance in supplying nickel for both stainless steel and the fast-growing EV and energy storage battery markets, said Ardea CEO Andrew Penkethman.

Export Finance Australia has expressed interest in providing a maximum of A$500 million, while U.S. Export-Import Bank indicated the potential for support of up to $350 million under its Supply Chain Resiliency Initiative.

($1 = 1.4288 Australian dollars)