The Elements of Innovation Discovered
The Elements of Innovation Discovered
Strategic Materials Complex could enjoy Army, AIDEA funding Metal Tech News Weekly Edition – February 12, 2020
Bokan Mountain, the site of Ucore Rare Metals' heavy rare earth element deposit on Prince of Wales Island in Southeast Alaska, rises above the American flag.
Rare earths consist of 17 elements that are increasingly important to a growing number of high-tech and military applications. Clockwise from top center: praseodymium, cerium, lanthanum, neodymium, samarium, and gadolinium.
Ucore Rare Metals Inc. wants to provide the Pentagon with an American source of rare earth elements, vital ingredients to a wide array of U.S. military hardware, from helmet mounted radios to laser guided missiles.
While essential to national defense, the U.S. currently depends on foreign countries for 100 percent of its supply of rare earths. And more than 80 percent of these critical metals are imported from China, either directly or via secondary countries.
As part of a joint armed forces effort to establish a domestic source of rare earths, the U.S. Army sent memos to Ucore and other companies that are advancing potential U.S.-based rare earth processing plants requesting information on the costs to develop separation facilities that can produce heavy rare earths, which tend to be the least abundant but most highly prized of the 17 elements that fall into the REE category.
This is in-line with Ucore's plan to develop a mine at Bokan Mountain, a project in Southeast Alaska that leans toward the heavy REEs the Pentagon is looking for, and an associated heavy rare earth separation facility in Ketchikan, a port town about 30 miles away from Bokan.
The Dotson Ridge deposit at Bokan Mountain hosts 79 million metric tons of indicated resource averaging 0.6 percent (63.54 million pounds) total rare earth oxides. While not particularly high-grade, roughly 40 percent of the rare earths at Dotson Ridge are classified as heavy REEs, which is what the Pentagon is particularly interested in.
"The U.S. Department of Defense is now pursuing the ways and means of establishing HREE separation capabilities within the U.S.," said Ucore Rare Metals Chairman Pat Ryan. "Without a doubt, this highly focused opportunity fits hand-in-glove with Ucore's HREE advantages, and our already substantial financing pipeline from the state of Alaska. We look forward to advancing our multi-point solution to the emergent U.S. HREE supply chain."
AIDEA affirms Bokan support
The Alaska funding mentioned by Ryan is in the form of a loan from the Alaska Industrial Development and Export Authority, which was established by the Alaska Legislature in 1967 to advance economic growth and diversification in the state by providing various means of financing and investment.
In 2014, the Alaska Legislature authorized AIDEA to invest up to US$145 million to help finance the development of a mine at Ucore's Bokan Mountain and the Alaska Strategic Metals Complex, a REE separation facility envisioned to be built at the Southeast Alaska port town of Ketchikan.
During 2019, AIDEA reviewed Ucore's plans to develop the Alaska SMC and mine at Bokan Mountain. As a result of this evaluation, Alaska's powerful development finance arm continues to see the projects as a good investment.
One of the reasons for AIDEA's continued interest is the potential that its investments in Alaska SMC and Bokan could be leveraged by federal support for the project.
"According to media reports, the U.S. Army recently sent out memos to a select group of companies that are advancing potential U.S.-based rare earth processing plants requesting information on the costs to develop separation facilities that can produce heavy rare earths. The Army is considering funding up to two-thirds of the costs required to establish at least one domestic facility which can separate these heavy rare earths into the individual metals needed for military hardware," AIDEA CEO and Executive Director Thomas Boutin penned in a December letter to Ucore.
In addition to the already approved bonds, with the approval of its board AIDEA said it has the ability to issue Ucore conduit bonds to potentially further finance the construction of the proposed Alaska SMC rare earth separation plant near Ketchikan.
Ucore said the prospective financing from AIDEA is an integral component of its planned objective of developing Alaska SMC, which may get started with rare earth feedstocks from other projects within the U.S. or allied countries; and then eventually from concentrates produced at a mine developed at Bokan Mountain.
"Ucore is grateful to AIDEA for its continued support of our efforts toward project development in Southeast Alaska," said McKenzie. "The $145 million AIDEA bonds authorization by the Alaska Legislature for the Bokan rare earth project, and the recent notification regarding potential AIDEA conduit bond financing for the Alaska SMC, uniquely positions Ucore in its pursuit to advance these projects."
Pentagon interested
The strong financial backing from AIDEA could make Bokan and the Alaska SMC more attractive to the Pentagon as it decides on one or more American rare earth projects to support.
"The current U.S. government initiatives to liberate North America from Chinese dependence on REEs require an element of self-funding that the AIDEA financing may provide or contribute to, and it distinguishes the potential development of Bokan apart from other heavy REE projects," said McKenzie.
In the information requests sent to Ucore, Texas Mineral Resources Corp., which is advancing the Round Top critical minerals project in western Texas, and others, the Army said it is looking into funding up to two-thirds of the costs required to establish at least one domestic facility that can separate the tightly interlocked heavy rare earths into the individual metals needed for military hardware.
This is the second such rare earth query by a branch of America's armed forces.
The first such memo, sent out by the Air Force last July, asked America's fledgling rare earth sector for information on both mines and processing facilities.
The Air Force and Army requests mirror and are likely related to July directives from the White House to establish a complete "mines-to-magnets" REE supply chain in the U.S. and break China's near monopoly on the production of these critical minerals vital to high-tech and military devices.
AIDEA, with an eye on its core mission of bolstering Alaska's economy, hopes to leverage the Pentagon's interest in establishing a domestic rare earth supply chain by potentially investing in the Alaska SMC.
"We would be glad to provide the U.S. Army with any additional information it may need about AIDEA finance programs which could apply to Ucore," Boutin penned in his letter to McKenzie.
More details on U.S. REE imports and efforts to foster domestic mining and separation of these elements can be found in The enigmatic rare earth elements paradox in the current edition of Metal Tech News.
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
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