Export Finance Australia (EFA) is looking into helping fund the Dubbo Project which it says "closely aligns" with a recently-announced initiative by the government to develop its critical minerals sector.

The Dubbo Project is based on a large in-ground resource of zirconium, hafnium, niobium, yttrium and rare earth elements at Toongi.

It is owned by Australian Strategic Materials Limited (ASM), a wholly-owned subsidiary of Alkane Resources.

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Alkane Resources calls the Dubbo Project the "most advanced poly-metallic project of its kind outside China, making it a potential strategic and independent supply of critical minerals for a range of sustainable technologies and future industries".

It reports that the project is development-ready subject to financing, with the mineral deposit and surrounding land acquired, all major state and federal approvals in place and extensive piloting and engineering completed.

ASM managing director David Woodall has welcomed "positive action" by the EFA.

"I look forward to continuing ASM's discussions with strategic partners and offtake parties, particularly with the ongoing trade support and now potential financial support from the Australian government," he said.

"It is very clear in today's world that security of supply chains in all manner of materials is a pressing issue, and security of critical minerals is one supply chain that the Australian government is clearly identifying as a priority for government backing."

Alkane Resources announced the appointment of Mr Woodall earlier this month. At the same time it revealed it was considering the "demerger" of ASM with a decision expected in the first half of 2020.

In a statement, Alkane Resources said: "Once approved, Australian Strategic Materials would become an ASX listed autonomous entity and Mr Woodall will remain as managing director."