Energy Fuels and Neo Performance are creating a new U.S.-European rare earths supply chain


Many in the market may have not realized that the U.S and Europe now have a new rare earths and rare element materials supply chain. Up until now the only rare earths producer of significance in the US was MP Materials Corp. (NYSE: MP). Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) has begun to produce a rare earths carbonate in the US and has teamed up with Neo Performance Materials Inc (TSX: NEO) (“Neo”), who makes the final rare earth materials in Estonia Europe.

According to rare earths expert Jack Lifton: “Energy Fuels is today, June 30, shipping the first 20 tonne container load of MRECs (mixed rare earth carbonate), extracted from Chemours’ monazite and processed to remove uranium and thorium and other interfering (with solvent extraction) ions, to Neo Performance’ dedicated SX facility in Estonia. Both Mark Chalmers and Constantine Karayannopoulos will be present at the processing plant in White Mesa, Utah.”

Jack Lifton also states that this is “the first production of a clean MREC derived from monazite in the USA since 1998” and “the restoration of a domestic rare earth supply chain beyond the mine has begun and Energy Fuels is leading the way.”

As reported by Energy Fuels in May 2021, the Company update stated:

“…the Company, along with Neo Performance Materials, announced the joint launch of a U.S.-European REE production initiative under which the parties plan to produce value-added REE products from natural monazite sands, a byproduct of heavy mineral sands mined in the southeastern United States. Pursuant to this initiative, in late-March 2021 Energy Fuels commenced ramping-up commercial production of a mixed rare earth carbonate (“REE Carbonate“) from natural monazite sands at the Company’s White Mesa Mill. Under an agreement in principle signed on March 1, and subject to completion of definitive agreements and successful ramp-up of production, Energy Fuels will ship a portion of its REE Carbonate production to Neo’s REE separations facility in Sillamae, Estonia  (“Silmet“). Neo will then process the REE Carbonate into separated REE materials for use in REE permanent magnets and other REE-based advanced materials.”

Energy Fuels is an emerging U.S producer of rare earth element products, plus an existing uranium & vanadium producer (on standby) at their White Mesa Mill in Utah, USA

Source: Energy Fuels

The monazite ore is supplied to Energy Fuels’ White Mesa Mill in Utah, USA by The Chemours Company’s Offerman Plant in Georgia, and potential future supply of additional natural monazite sands is contracted via a non-binding MOU from the Titan heavy mineral sand project in Tennessee owned by Hyperion Metals Limited. All of this means that a new USA supply chain for rare earths carbonate has begun.

Energy Fuels’ President and CEO, Mark S. Chalmers, stated:

“Without a doubt, Energy Fuels is making major strides toward restoring critical U.S. rare earth supply chains, while also maintaining our position as the leading U.S. uranium producer…..On rare earths, our efforts over the past several months culminated in the announcement on March 1 that Energy Fuels and Neo Performance Materials were creating a new, U.S.-European rare earth supply chain……However, as I’ve said many times, we have much bigger rare earth plans, and the momentum is building rapidly as we execute our purposeful strategy. We are now taking real steps toward designing and building fully integrated, U.S. rare earth production capabilities.

It seems the mass media is yet to realize the significance of CEO Chalmer’s statement, especially given Energy Fuels trades on a market cap of just US$873 million. When comparing to MP Materials on a market cap of US$6.08 billion, Energy Fuels looks cheap, but it should be noted that Energy Fuels is not yet a fully integrated rare earths carbonate producer and has less capacity (up to 2,500 tons per year of monazite) than MP Materials (noting mining in USA and processing in China). Of course, the plan is for this to change in coming years, plus Energy Fuels has uranium and vanadium on standby production awaiting better prices and/or to supply uranium into the U.S. Uranium Reserve once it is established by the U.S. government. You can read more on Energy Fuels rare earths plan here.

In the case of Neo Performance Materials, they are further along the supply chain specializing in advance materials including rare earths magnet materials. Neo trades on a market cap of C$616 million (US$497 million). Neo states:

Neo is the only company in the world that operates dual supply chains inside and outside of China for REE separation and REE advanced materials. Neo owns the only operating commercial rare earth separation facility in Europe.

You can read more on Neo here.

Neo Performance Materials produces rare earths advanced materials (magnet materials etc) and sells globally

Source: Neo Performance Materials company presentation

Closing remarks

For investors wanting to get involved in western based rare earths and rare earth magnet materials companies then it would be sensible to consider both Energy Fuels (intermediate rare earths carbonate materials) and Neo Performance Materials (advanced rare earth materials).

Both companies appear to be moving in the right direction with a large runway of growth ahead. Demand for their products looks to be exceptional in the years ahead, thanks to the electric vehicle and renewable energy booms, which should support strong pricing and margins.

As a result of all of this, the West’s sustainable future looks brighter thanks to increasing rare earths products supply from Energy Fuels and Neo Performance Materials.

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2 responses

  1. Rare Earths Investor Avatar
    Rare Earths Investor

    An interesting process linking several N. American companies. Congratulations to all for having undertaken such a move without apparent strategic support. Question as to where NEOs’ feedstock was/is coming from? Is this mainly China? This would raise an interesting issue/question linked directly to what apparently NEO already does according to the article –

    “Neo is the only company in the world that operates dual supply chains inside and outside of China for REE separation and REE advanced materials.”

    1. Will other companies choose to do the same in terms of component and end line manufacture? Will we begin to see facilities set up by companies for both the American/EU market and also the Chinese? Will the EU ESG focus further force this diversification on manufacturers seeking supply chain compliance and therefore access to specific markets? 2. How might China react (if at all) to NEO’s newfound very public relationship with US RE companies and the aim to supply to both huge markets?

    Thanks for the update.

    1. Alexander Nosovskiy Avatar
      Alexander Nosovskiy

      SILMET had supplyed by Russian mix carbonate from SMZ, if Energy Fuel became supplyer instead of SMZ , the SMZ will need to find new supply chain

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