Ionic Rare Earths has approved advancing to a formal evaluation of the business case for the development of a standalone rare earth Separation and Refining facility, to be developed for the downstream processing of mixed rare earth carbonate (MREC) product from its Makuutu Rare Earths Project in Uganda, to produce refined critical and heavy rare earth oxides (CREO, HREO).
A review of existing global HREO refining capacity indicated the majority of capacity exists in China, with minor capacity identified in Vietnam. IonicRE has concluded the development of a dedicated facility, strategically located, has the potential to be a substantially earnings accretive asset, which would enhance and strengthen the engagement and participation of potential strategic partners looking to secure access to product from IonicRE’s Makuutu basket, whilst adhering to the highest ESG standards via a secure and traceable supply chain.
Ionic Rare Earths MD Tim Harrison comments:
“IonicRE has identified a clear opportunity to provide mine to market CREO and HREO capacity. The Company has been assessing options and desktop studies, to maximise returns from Makuutu’s unique and highly valuable basket, especially given the potential for demand to dramatically exceed supply for the HREO in the future. Therefore, the opportunity to build a more integrated mine to market strategy for our CREO and HREO basket becomes far more compelling.”
“Our timeline to production from Makuutu remains firm – the focus is set on 2024. As we ramp Makuutu up over the rest of the decade to 2030, IonicRE also wants to ensure we can build Separation and Refinery capacity to match that scale of production proposed at Makuutu. To meet those goals, now is the time to start this activity.”
“IonicRE, through Makuutu, has the potential to produce a dominant 73% CREO/HREO basket, as an intermediate chemical MREC precipitate, free of the radionuclide issues that plague our hard rock rare earth peers, and with a substantially lower capital requirement for downstream refining. Everything points to a fantastic opportunity provided to IonicRE.”
“Additionally, the Company sees the development of a standalone Rare Earth Separation and Refinery facility as being key to providing optionality for the future. With limited HREO refining capacity forecast to be developed outside China in the near term, the development provides direct exposure to maximising value from product with a CREO/HREO dominant basket with greater future demand forecast and diminishing existing supply in years to come.”
The scale of the Separation and Refinery facility is likely to be initially set at approximately 4,000 tpa REO equivalent feed, reflecting an alignment to the peak projected production capacity announced in the Makuutu Rare Earths Project Scoping Study.
Given the potential for Makuutu to support long-life, low-cost REO production for a period of 27 years, and recent exploration results defining further scale for significant additional growth in resources at Makuutu, the development of a standalone Separation and Refining asset provides greater long term strategic importance and upside for the Company.
IonicRE at present owns 51% of Makuutu, however the Company will move to 60% ownership of Makuutu on the completion of the FS before October 2022 and has a pre-emptive right over the remaining 40% stake in Makuutu.
The proposed Separation and Refinery facility will be a 100% owned by IonicRE and will enable the company to increase payability attained from the MREC basket produced at Makuutu to 100% payability for refined individual REO products. The study will also include a location analysis to help refine the list of potential global sites against an identified criterion, with alignment to demands of potential strategic partners looking to ensure security of supply long-term.