Australia’s ABx Group (ASX:ABX) has taken an important step towards cementing a deal with Nova Scotia-based Ucore Rare Metals (TSX-V:UCU) for the supply of mixed rare earth carbonates to the US.
The two companies have inked a memorandum of understanding to work towards a binding agreement for the supply of mixed rare earth carbonate from ABx’s ionic adsorption clay-hosted rare earths project in Tasmania to Ucore.
It also opens the door to a potential investment from Ucore into ABx’s project.
Ucore has developed a rare earth separation technology, known as RapidSX, and is currently undertaking heavy and light rare earth element separation at demonstration scale at its Ontario-based facility.
Meanwhile, ABx says the grades of the two key heavy rare earths – dysprosium and terbium – within its Tasmanian project are the highest of any clay-hosted rare earths resource in Australia and comparable to the highest in the world; a claim which has been confirmed through metallurgical testing by the Australian Nuclear Science and Technology Organisation.
Dysprosium and terbium are both key components of the strong permanent magnets used in electric vehicles and wind turbines.
ABx and Ucore will work towards agreeing on the annual volume of the intermediate rare earth product, which is expected to be a mixed rare earth carbonate, to be supplied.
The pair also anticipate the deal will allow for Ucore to obtain first right of refusal for 50% of ABx’s annual volume for at least five years, subject to the agreement of commercial terms.
Additionally, the collaboration will explore potential investment by Ucore into ABx’s rare earth project as well as project finance opportunities for both companies’ projects.
ABx says this may involve joint approaches to companies active in the rare earth value chain, governments, institutional funds, and private investors.
ABx and Ucore will also collaborate on the development and optimisation of a comprehensive product flowsheet, considering where best to implement collective project efficiencies, as well as a total project development strategy, including laboratory, pilot, and demonstration plant testing.
Ucore is working to establish a Western supply chain and break China’s stranglehold over the North American rare earths supply chain.
The US imports over 70% of its rare earths from China. US Geological Survey statistics show that the US imported $190 million worth of rare earth compounds and metals in 2023, which was a 7% reduction from $208 million in 2022.
Ucore CEO Pat Ryan says the prospect of securing a stable supply of mixed rare earth carbonates with high heavy rare earth content from Australia is very appealing to the company.
“This partnership builds on our commitment to establish relationships within the Australian private sector and between US and Australian government agencies as we work to establish rare earth manufacturing in the United States and across the West,” he says.
Ucore has also partnered with the US Department of Defense and the Canadian Government as it implements its technology transfer plan from demonstration scale to commercial scale at its Louisiana Strategic Metals Complex in the US.
ABX Managing Director Mark Cooksey says Ucore’s progress and strategic importance is evidenced by their demonstration plant in Canada and significant financial support from both the Canadian and US governments.
“This agreement is further validation of the outstanding prospects for the ABx rare earth project in northern Tasmania,” he says.
“We are passionate about bringing our project into production as soon as possible to supply the rare earth elements required for the energy transition.”
Write to Angela East at Mining.com.au
Images: ABx Group
