As most investors familiar with the critical materials sector know, China currently dominates the space, especially in downstream critical materials ‘processing’. This leaves the Western world very vulnerable to supply chain interruptions that can threaten the supply of end-user products such as electrical and electronic components, electric vehicles, wind turbines, solar panels, and/or military systems.
Today’s company, Ucore Rare Metals Inc. (TSXV: UCU | OTCQX: UURAF) (Ucore), is working to bridge that gap, domestically, and become a USA ‘processor’ first of the rare earths, and ultimately of other key critical materials. They also plan to be a vertically integrated individual, separated, heavy rare earths producer.
Ucore is focused on initially developing an Alaska-based Strategic Metals Complex (SMC) rare earths’ central processing facility with commissioning targeted for 2024. After that Ucore plans to develop its own magnet rare earths’ deposit located on Bokan Mountain on Prince of Wales Island, Alaska. The ultimate plan for Ucore is to have their Bokan-Dotson Ridge REE Project – containing the heavy rare earths’ Dysprosium (Dy), Terbium (Tb) & Yttrium (Y) – feed their first, Alaska located, SMC processing facility. The underlying technology for this and other planned SMCs is the RapidSX™ REE separation technology platform, which will be operated by Ucore’s wholly owned subsidiary, Innovation Metals Corp. (IMC).
Ucore plans to fill the processing gap in creation of a Western rare earths supply chain with their SMC facilities
Source: Ucore news January 2022
A key part of getting the Alaskan SMC processing facility up and running is to secure material supply agreements. The facility will have an initial 2,000 tpa total rare earth oxide (TREO) separation and purification capacity, ramping to at least 5,000t/year TREO by 2026.
Feedstock agreements are progressing well for Ucore’s planned Alaskan SMC processing facility
In October 2021 Ucore signed a non-binding Memorandum of Understanding (MOU) with Vital Metals Limited (ASX: VML | OTCQB: VTMXF) for the supply of a mixed rare earth carbonate, beginning H1 2024. The deal is for “Vital to sell to Ucore a minimum of 500t REO (ex-cerium)/year, commencing H1 2024. Vital to expand production to support a minimum of 50% of Ucore’s envisioned 5,000t TREO/yr processing capability by 2026.”
It also was announced last week on April 20, 2022, that Ucore and Germany’s ThyssenKrupp Materials Trading had executed a feedstock supply MOU for the Alaska SMC. Under the MOU “ThyssenKrupp Materials Trading is expected to begin the supply of a minimum of 1,000 tpa of mixed rare earth carbonate to Ucore in 2024 for ten years.” The announcement also states that the non-binding MOU allows for increasing quantities in subsequent years and that the two parties will work towards a 10-year binding contract.
The above MOU is a great achievement and positive endorsement for Ucore, as ThyssenKrupp Materials Services is the biggest mill-independent materials distributor and services provider in the Western world with around 380 locations, in more than 30 countries.
The loud and clear message for investors is that Ucore is putting together a North American individual rare earths supply chain from mixed rare earths carbonate (concentrate) all the way to the final product of separated individual rare earth oxides, used to make rare earth metal alloys (including magnets) such as those required for many critical and green energy products. It will be a key initial step for the USA to gain rare earths processing independence from China, which currently dominates the sector.
Ucore is also developing processing technology for other critical metals in Ontario
As announced on April 19, 2022 Ucore is improving the management and technical team for their Ontario RapidSX™ Commercialization and Development Facility (CDF). The demonstration plant construction is ongoing and is scheduled for commissioning in mid-2022.
What I find most interesting is that Ucore is also working on nickel laterite ore processing technologies as well as lithium-ion battery recycling, including working with clients such as Li-Cycle Holdings Corp.
Full details on Ucore’s 2022 plans can be read here and include:
- A commercial demonstration plant for their RapidSX™ technology in Ontario.
- Development of the Alaska SMC Project.
- Exploring the potential of developing an SMC in Canada.
- Accelerating the development of the Bokan Project as a vital US supply chain component to provide a long-term secure source of HREEs; the most expensive and scarce inputs of the permanent magnet alloys.
Ucore’s business summary – Includes a target for construction of the Alaska SMC by 2023, subject to finance
The Western world needs to develop its own complete end-to-end supply chains for critical strategic metals. In the case of rare earths, Ucore is advancing well and steadily moving towards becoming a U.S. individual separated rare earths producer by 2024, all going to plan. Of course, investors should remember these dates are the best guide from the company only and are subject to variables such as successful funding.
Ucore Rare Metals Inc. trades on a market cap of C$37 million. Ucore still has a long way to go with several hurdles and risks ahead, partially explaining the very low market cap. Still, if they succeed the potential reward could be significant.