The United States Department of Defense (US-DoD) offered a Canadian rare earth metals company a USD$4 million government contract for a study in the separation of rare earth elements (REE).
Ucore Rare Metals Inc. (TSXV: UCU) (OTCQX: UURAF) subsidiary Innovation Metals Corp was awarded the contract on Tuesday by the US Army Contracting Command-Orlando to conduct a rare earth element separation technology capabilities prototype project at it’s facility in Kingston, Ontario.
The project is to show the capability of commercially sourcing a sustainable domestic processing facility within the United States and Canada. This facility will play a crucial role in converting both heavy and light REE feedstock sources into salable individual rare earth products.
By establishing a reliable and self-sustaining processing facility within the region, the project aims to reduce dependence on foreign sources and enhance the domestic availability of rare earth elements.
Secondly, the project aims to introduce a new and innovative separation process that will significantly enhance the feasibility of creating domestic REE processing plants.
This novel separation process is designed to optimize the efficiency and effectiveness of separating REE, thereby overcoming existing challenges and bottlenecks. By improving the separation capabilities, the project seeks to promote the establishment of domestic REE processing plants, which would further bolster the strategic and economic interests of the United States.
“We believe that Ucore has one of the West’s most compelling rare-earth-supply chain business models,” said Pat Ryan, Ucore Chairman and CEO.
“This US-DoD Project will allow us to demonstrate the RapidSX technology platform for rare earth element separation and will include original equipment manufacturers’ qualification trials in coordination with our commercial development activities at the company’s planned Louisiana SMC.”
The importance of REEs lies in their indispensable contribution to a wide range of applications. They are vital for the development and production of advanced technologies used in defense systems and various commercial sectors like smart phones. Rare earth permanent magnets are extensively utilized in numerous devices and machinery, including electric motors for vehicles. As the world transitions towards electric vehicles, the demand for these magnets is anticipated to experience a significant upswing.
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China controls 85% of the global rare earth processing market
Furthermore, China also controls 85 per cent of the global rare earth processing market prompting President Joe Biden to sign executive order 14051 to ensure an adequate stockpile of rare earth for national security purposes.
The agreement gives the company the opportunity to operate its RapidSX Demo Plant for extended periods, demonstrating the specific attributes to the US-DoD. The primary objective is to showcase a rare earth separation processing capability that surpasses the efficiency of conventional solvent extraction. By achieving a higher efficiency rate, the company aims to highlight the superiority of its separation technology.
Another crucial aspect to demonstrate is the applicability of the separation technology to both light and heavy rare earth elements using the same equipment. This versatility showcases the flexibility and adaptability of the company’s technology, enabling efficient processing of a broad range of REE compositions.
The project also focuses on showcasing a continuous process working facility capable of processing substantial quantities of feedstock. This capability demonstrates the scalability and robustness of the technology, as it handles large volumes of feedstock consistently and efficiently.
The US-DOD issued a Request for Solutions (RFS) on November 10, 2022, in search of vendors and suppliers offering innovative REE projects. The objective was to identify solutions that promote the adoption of REE recovery and separation technologies with advanced processing capabilities capable of meeting the US-DOD’s requirements.
Ucore, in collaboration with its subsidiary IMC, submitted a solution on January 17, 2023, in response to the RFS. The solution was based on Ucore’s ongoing separation technology development program in Kingston, Ontario, and its advancements in commercial deployment in Louisiana. The solution detailed the proposed project, outlining the uses of Ucore’s separation technology at the Critical Materials Development Facility through the operation of the demo plant.
Following a series of negotiations, the US-DoD and Ucore finalized the deal on June 2, 2023. The terms of the agreement have the company undertaking the project in stages and providing regular reporting and information updates. Payment milestones are established, divided into fixed tranches and tied to the successful completion of each project stage.
UCore shares dipped 1.6 per cent to $1.23 on Thursday on the TSX Venture Exchange.
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