An international REE partnership in NWT
Aussie and Norwegian enter into a Canadian rare earth pact Metal Tech News – February 3, 2021
Last updated 6/8/2023 at 12:05pm
With the recent signing of a rare earth offtake and profit-sharing agreement with Norway-based REEtec, Australia-based Vital Metals Ltd. said it is targeting the production of rare earths from its Nechalacho project in Northwest Territories before the end of this year.
"The signing of this agreement will enable REEtec and Vital to work together to supply separated rare earth oxides, which are competitive to products produced anywhere else in the world into the electric vehicle and wind turbine markets," said Vital Metals Managing Director Geoff Atkins.
Under the definitive agreement signed on Feb. 2, Vital will provide REEtec 1,000 metric tons of rare earth oxides per year. This excludes any cerium from Nechalacho, which accounts for about half of the total rare earths in the zones to be mined by Vital.
The magnet rare earths praseodymium and neodymium are expected to account for roughly 447 metric tons of the annual rare earth oxides covered under the preliminary offtake agreement. When it comes to volume, this would make up roughly 45% of the rare earth oxides mined by Vital and separated by REEtec. When it comes to value, however, these two rare earths account for US$37 million, or roughly 87% of the expected value at current REE prices.
"Through this agreement with Vital Metals, REEtec is taking further steps to secure access to rare earth feedstock and thereby strengthening our ability to offer competitively priced magnetic materials to our customers," said REEtec CEO Sigve Sporstøl.
The rare earth feedstock supplied by Vital will be mined from near surface resources in the T-Zone and Tardiff zones at Nechalacho, which the Aussie miner acquired from Canada-based Avalon Advanced Materials Inc. for C$5 million in 2019.
Overall, these upper zones at Nechalacho host 94.7 million metric tons of combined measured, indicated, and inferred resources averaging 1.46% rare earth oxides.
Vital plans to begin mining at North T, a high-grade subzone that hosts 105,000 metric tons averaging 9% light rare earth oxides.
It is from this deposit that Vital will begin delivering rare earth oxides to REEtec, a Norwegian company that has developed a new and potentially game changing process for the separation of high purity rare earths. REEtec says the energy demand for its separation tech is very low and it is able to recover and reuse virtually all of the chemicals used, which makes the process highly efficient and environmentally sound.
"In the same way that Vital is focusing on the development of a low environmental impact mining operation at Nechalacho in Canada's Northwest Territories, it is also a pleasure to be able to join with a likeminded company to develop a source of rare earths to support our customers in the diversification of their supply chains," Atkins said.
This diversification of the rare earth supply chains dominated by China has become increasingly important to government leaders in the United States, Japan, Australia, and the European Union.
"By diversifying the supply chain from third countries and developing the EU's own capacity for extraction, processing, recycling, refining and separation of rare earths, we can become more resilient and sustainable," European Industry Commissioner Thierry Breton said during a September press conference.
In preparation to begin providing a Canadian source of rare earths from the upper zones at Nechalacho later this year, Vital has been upgrading the camp and clearing the area where mining is slated to begin. The mining fleet is expected to arrive in March on an ice road currently under construction.
Vital intends to grow the scale of its operations at Nechalacho and the offtake and profit-sharing agreement with REEtec provides the companies with the option to increase this offtake volume up to 5,000 metric tons of rare earth oxides per year, minus the cerium.
"We believe the step-by-step growth approach of Vital is complementary to our own," said Sporstøl. "We look forward to growing our businesses together while providing our partners further down the value chain with a more diversified source for their much-needed magnetic materials."
REEtec was founded by Scatec Innovation, a Norway-based company that has taken a leading role in the industrialization of several ground-breaking technologies in renewable energy and advanced materials over the past three decades.
"We look forward to a prosperous working relationship with Vital, thereby securing stable supply of rare earth elements, a critical product for the performance of electric vehicles, wind turbines, consumer electronics and industrial robots," said REEtec Chairman and Scatec Innovation CEO John Andersen, Jr.