Ionic Rare Earths (ASX:IXR) is on track for the commercial development of its rare earth oxide manufacturing facility in Belfast, UK, after completing a Feasibility Study which has shown “strong” financial returns and environmental sustainability.
Through Ionic’s wholly owned subsidiary Ionic Technologies, the company has developed rare earths separation and refining technology and applied this to the recycling of spent permanent neodymium-iron-boron magnets.
The Feasibility Study shows the manufacturing facility has a post-tax net present value of US$502 million ($776.69 million) and a post-tax internal rate of return of 43.6%. The study also highlights the facility has a capital expenditure of US$108.7 million.
Ionic, which has a market capitalisation of $43.82 million, says the project has a net revenue of US$2.12 billion and an earnings before interest, tax, depreciation, and amortisation of $1.78 billion.
It will have a capital payback period of two years and four months, based on throughput of 1,200 tonnes per annum to produce 400tpa of separated magnet rare earth oxides over a 20-year operation life.
Managing Director Tim Harrison says the study confirms the commercial case for magnet recycling is compelling, complementing the clear environmental and sustainability benefits, alongside the forthcoming need for rare earths production outside of China.
“Financially, this represents a low capital risk pathway to sovereign magnet REO production compared to alternative sources, offering strong financial returns based on a circular economy model of sustainable production, backed by the UK Government and our project partners,” Harrison says.
“Now that we have successfully delivered on this UK Government supported study, we anticipate significant strategic and investor interest owing to the potential for the development to underpin UK and European net zero ambitions, create supply certainty, reduce exposure to cost fluctuations and promote regional growth within the UK.”
Harrison adds Ionic plans to use this study to progress additional opportunities in target markets such as Asia, Brazil, Europe and the US.
“We are now moving to secure feedstock and offtake agreements, enabling Ionic Technologies to capitalise on its leading market position and technical capability to deliver benefits for all stakeholders,” he says.
“With more than 50% of the global production of neodymium-iron-boron magnets consumed for decades in the west, a sizable inventory of material is available to recycle back into new supply chains now.”
Ionic now plans to appraise commercial options to progress to front end engineering design (FEED) with an appropriate engineering, procurement and construction management (EPCM) partner. The company will also engage with local stakeholders to accelerate delivery of its Belfast facility.
The company is targeting a final investment decision for the facility in the first half of 2025. First production is targeted to begin in 2026, based on regulatory approvals and project funding.
Discussions are currently underway with strategic investors and debt financiers to secure the total investment required to progress towards a final investment decision.
Ionic is also progressing the necessary approvals needed for the commercial site, which is located on Queens Island in Belfast Harbour. Permitting is anticipated to be finalised early next year.
The planned commercial-scale plant aims to represent a 40-fold increase in production capacity from the demonstration plant to meet demand from the net zero transition, advanced manufacturing and defence.
Executive Chairman Brett Lynch says the Belfast plant is the first producer of recycled separated magnet REOs in the western world.
“We are now moving rapidly to commercialise rare earth recycling, with planned commercial-scale production within just two years, offering investors direct exposure to the growth of a western supply chain,” Lynch says.
Ionic Rare Earths is an emerging miner, refiner, and recycler of sustainable and traceable magnet and heavy rare earths needed to develop net zero carbon technologies.
Write to Aaliyah Rogan at Mining.com.au
Images: Ionic Rare Earths
