Operation of Rare Element Resources' demonstration plant in Upton, Wyoming, could still begin the fourth quarter of this year, despite recent construction delays caused by skyrocketing inflation.
Double-digit inflation contributed to delays that postponed the plant’s July opening of its novel rare earth minerals processing plant in the northeast corner of the state, where there is a mine with unusually high concentrations of rare earths. Inflation added 21% more cost to the plant’s original $44 million project, according to figures from the company, making it a $53 million and some project.
It’s not going to scuttle the plant, however, which is almost complete. The U.S. Department of Energy has issued a second and final Project Continuation Notice for the Upton plant, which includes a 10% increase to the federal agency’s funding for the project’s new cost-share budget of $53.6 million. That will boost the federal support from $21.8 million to about $24.2 million.
The company now only needs one more federal thumbs-up to begin operation, from the U.S. Nuclear Regulatory Commission. That’s expected in the next few weeks, according to Rare Element Resources President and CEO Ken Mushinski.
The company has continued efforts to have all its ducks in a row once the trigger can be pulled, he added.
“In anticipation of the DOE’s operations approval just received, we have spent the past several months working alongside the project team and our contractors preparing the site for operations,” Mushinski said in an emailed statement. “With the achievement of this pre-operational milestone and anticipated receipt of the NRC’s license amendment necessary for operations, we continue preparations for the commencing of plant operations.”
Wood PLC of Gillette, Wyoming, is the project’s staffing contractor.
“Entering the operations phase moves us one step closer to proving our innovative rare earth recovery technology is ready for commercial applications,” Mushinski said.
A New Approach To Rare Earths
Rare earths are used for a wide array of technological gadgets that Americans rely on, ranging from cellphones and tablets to electric vehicle car batteries and nuclear missiles.
China has long had a stranglehold on these rare earths. Even the few minerals that are mined in America are sent overseas to China for processing.
Given that China is flooding the market with rare earths below market cost, a lower-cost method is essential to creating a feasible domestic supply chain of rare earth elements.
That’s where the Upton plant comes in. Not only is there a world-class resource at the site, but Rare Element Resources is pioneering what it says is a best-in-class refinement process that not only has fewer steps than traditional methods, but also produces less waste. It should be cheaper than the traditional methods, and that is game-changing not just for Wyoming, but America.
Rare Element Resources reports it has already demonstrated remarkable success with its process at the laboratory level. Now it’s a matter of scaling up, showing that this process is still feasible at much larger, manufacturing-sized quantities.
A domestic supply chain of rare earth metals is something multiple presidents from both Democrat and Republican parties have identified as key to national security, and that’s why DOE has become involved in this project.
“We are appreciative of the DOE’s recognition of the significance of our plant to U.S. domestic supply chain, and its willingness to provide additional cost-share to assist in off-setting the project cost growth,” Mushinski said. “While we focus on the important nextstep of plant operations, we will continue to diligently manage costs and schedule.”
Final Costs Still To Be Tabulated
Mushinski also said the final cost of building the demonstration plant is likely to rise and will be refined as the project proceeds.
That could mean adjustments to the final $53.6 million cost-share budget that the federal government has been helping to get off the ground.
“We have taken extraordinary measures to control costs during the design, construction and soon-to-commence operation phases,” Mushinski added. “(But) the fact is, our first-of-its-kind rare earth element separation plant project has gone from concept to reality during a recovering economy and associated supply chain issues, which has resulted in both schedule and cost challenges.”
In previous statements to Cowboy State Daily, Mushinski has said higher costs were driven by post-pandemic supply chain issues and inflation, as well as design refinements to the project as it has moved from concept to final construction.
The company plans to use existing company funds to cover the additional costs above the DOE-approved cost-share budget, as well as pursue other funding to get the project off the ground.
Once operational, the Upton demonstration plant is expected to include a full-time staff of 20 people.
Wyoming has a long history of mining and is already well-positioned to become a rare earth mining powerhouse, Rare Element Resources officials have told Cowboy State Daily.
The state already has the right legal infrastructure, and it already has the right logistics chain as well. Having the world’s most efficient, cost-effective method of processing rare earths on top of all that can bring tremendous value to the Cowboy State’s already strong position in this sector.
Editor's note: This story has been corrected to reflect construction of the project is almost complete, not ready to begin.
Renée Jean can be reached at renee@cowboystatedaily.com.
