Ucore Rare Metals (TSXV:UCU,OTCQX:UURAF) has moved to shore up future supplies of heavy rare earths through a preliminary offtake deal with Critical Metals (NASDAQ:CRML).
The Halifax-based company announced Tuesday (August 26) it had signed a non-binding letter of intent with Critical Metals, which plans to develop the Tanbreez rare earth project in Southern Greenland.
Under the proposed 10 year arrangement, Critical Metals would deliver a rare earth carbonate or oxide product to Ucore, starting in 2027 or upon commercial production, whichever comes later.
The feedstock is slated for processing at Ucore’s Strategic Metals Complex in Louisiana, a facility backed by both the Pentagon and the state of Louisiana. Smaller volumes will be processed first at Ucore’s demonstration plant in Kingston.
“Critical Metals Corp’s Tanbreez offers tremendous opportunities for Ucore given the significant concentration of heavy rare earths it contains, which are essential for the production of rare earth permanent magnets,” Ucore Chief Executive Pat Ryan said in a statement. “Both Critical Metals Corp and Ucore share a vision to lessen China’s grip of the rare earth ecosystem in the West, and we look forward to our partnership.”
Critical Metals’ executive chairman Tony Sage also said the collaboration would help fill gaps in Western supply chains for strategic minerals.
“These materials are critical to a number of western defense and consumer applications and we look forward to teaming up with Ucore and their exceptional team to support the development of a robust supply chain in America that isn’t reliant on China,” he said.
Rare earth elements, particularly the heavy segment such as terbium and dysprosium, are crucial for high-performance magnets used in fighter jets, missiles, radar, electric vehicles and renewable energy systems.
China currently controls the vast majority of mining and separation capacity, leaving Western nations exposed to potential export restrictions and supply chain disruptions.
Incidentally, the offtake announcement comes weeks after Ucore recieved a US$18.4 million Phase 2 award from the US Department of Defense to scale up its Louisiana refining complex.
The project builds on an earlier US$4 million Phase 1 program in which the company successfully demonstrated the separation of terbium and dysprosium at its Ontario pilot facility.
In addition, the Pentagon funding supports the installation of the company’s proprietary RapidSX separation technology at commercial scale. Ucore said the award will culminate with the construction of a first commercial RapidSX machine at the Louisiana site.
Pentagon officials have repeatedly warned that China’s dominance in the sector poses a strategic vulnerability, and have stepped up efforts to seed alternative supply chains in North America.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
