Rare Element Resources Ltd. is set to complete a rare earth minerals demonstration factory in Upton, Wyoming, this summer that is viewed as a first step toward putting the United States in a better competitive advantage with China, which has long dominated this sector.
The demonstration-scale processing plant, which was unveiled in a groundbreaking ceremony last fall, is pioneering a new, more efficient method to extract rare earths.
Canadian-based Rare Element Resources is holding the line to a July opening date for the demonstration project despite concerns about inflation driving up the construction cost of the $44 million project, said President and CEO Brent Berg.
In a filing with the U.S. Securities and Exchange Commission, the company states that “potential options include changes to the project timeline and the raising of additional funds.”
The company is addressing the higher expense to build the plant with a major financial backer, the U.S. Department of Energy, and may negotiate for additional money, Berg told Cowboy State Daily.
Besides being backed by a 54% stake from military contractor General Atomics of San Diego, a builder of huge drones and other high-tech gadgetry, Rare Element Resources is getting $21.9 million in financial support from DOE’s Advanced Materials and Manufacturing Technologies Office, a matching amount from the company, and a $4.4 million grant from the Wyoming Energy Authority.
Richer Discovery
Fueling optimism for the plant’s prospects is a new analysis of the company’s mineral resources held in the Bull Hill deposit at the Bear Lodge Project, located in northeastern Wyoming.
The mining operation will supply a steady stream of rare earth minerals to the demonstration project, and later a commercial-size plant once the innovative technology is proven, Berg said.
Significantly, a deeper dive into which critical minerals the demonstration plant will separate, and a revised analysis of minerals from core holes drilled between 2009 and 2013, reveals that the company has a richer discovery on its hands than originally anticipated, Berg said.
“We’ve tried to evaluate the resources where we’d get the biggest bang for the buck," Berg said.
The analysis focused on the key magnet materials of neodymium, praseodymium, terbium and dysprosium, as well as other critical rare earths such as lanthanum.
Rare earth minerals are used in magnet materials required for everything from powering electric vehicles and wind turbines to military applications to ensure short takeoffs and landings of jets from an aircraft carrier’s deck, and aircraft powered by magnet motors.
The recent analysis is crucial to Rare Element Resources, which hopes to complete a $35 million rights offering to existing shareholders for its proprietary rare earth minerals recovery and separation technology in Upton, as well as invest in its Bear Lodge Project.
That rights offering to sell stock to existing shareholders is expected to close next week, according to a filing with the U.S. Securities and Exchange Commission.
Hurdles Remain
Rare Element Resources must still overcome potential hurdles.
The company put on pause the environmental assessment of its mining operation back in 2016 with the U.S. Forest Service. Those plans will get jumpstarted after the demonstration plant proves its new technology, Berg said.
Getting a permit with the federal forestry service could take a few years, as could permits from other entities, like from Wyoming, he said.
“With demand for magnet materials expected to grow exponentially over the next 30 years, driven primarily by their use in defense and green technologies, it makes sense to focus our efforts on those key magnet materials in this resource model," Berg said. “This will ensure that over the longer term, we are aligned with the national security interests and decarbonization goals of the United States.”
China controls about 86% of the world’s refining capacity for rare earth minerals and 92% of the world’s supply of magnets.
“We see an opportunity to develop a domestic supply chain,” Berg said.
Pat Maio can be reached at Pat@CowboyStateDaily.com
