The Elements of Innovation Discovered
The Elements of Innovation Discovered
Metal Tech News - June 17, 2024
Bags of high-grade rare earths concentrated by an ore sorter operated by Jeremy Catholique in 2021 are lined up and ready for shipment to Saskatchewan.
A sample of high-grade rare earths ore from the Nechalacho project in Northwest Territories.
North T mining operation at Nechalacho in 2021.
As home to the first rare earths mine in Canada, Vital Metal Ltd.'s Nechalacho project in Northwest Territories grabbed national headlines as the initial link of a burgeoning rare earth supply chain that would be completely independent of China.
With this being hailed as a major milestone for Canada and its allies, Vital's announcement late last year that it would be selling the rare earth stockpiles from previous small-scale mining at Nechalacho to China-based Shenghe Resources Holding Co., Ltd. raised the concern and ire of many Canadians.
"Nechalacho was sold as a source of rare earths and critical minerals that would be controlled by allies," Kieron Testart, a member of the legislative assembly in Northwest Territories and former director of economic development for Yellowknives Dene First Nation, said during an interview with Yellowknife, NWT-based Cabin Radio.
"I was there with the late Chief Edward Sangris when that announcement was made publicly, with representatives from Australia, Norway and the United States all holding hands, showing that this was going to be a Western supply chain," he added. "Now, with China involved, that's clearly not the case anymore."
While Shenghe remains involved in Nechalacho's future, at least the initial rare earths mined at Nechalacho will remain within the Canadian value chain due to a superior offer for the high-grade REE stockpiles put forward by the Saskatchewan Research Council (SRC), which is scaling up its own rare earth separation and processing facility just outside of Saskatoon, Sask.
In a deal announced on June 17, SRC has agreed to buy rare earth stockpiles previously mined from the very high-grade North T deposit at Nechalacho for C$3 million (US$2.2 million), which is a 25% better offer and supersedes the roughly C$2.4 million (US$1.8 million) deal struck with Shenghe last December.
North T mining operation at Nechalacho in 2021.
"This agreement highlights the strategic value and importance of the Nechalacho rare earths project, and the prioritization of a rare earths value chain in Canada," said Vital Metals Managing Director Geordie Mark.
The deal with SRC also means that the first rare earths mined in Canada will be following a similar value chain path as initially planned.
Vital's original strategy was to establish a complete rare earth supply chain that was to begin with mining and upgrading high-grade ore at Nechalacho; shipping the concentrated REE ore to Saskatoon, where it would be further upgraded to a mixed rare earth product that could be forwarded on to separation plants in Europe and North America for the final stage of processing.
In 2023, however, Vital completed a strategic review that determined its original rare earths supply chain strategy, anchored by the high-grade North T deposit and Saskatoon processing plant, was not economically viable.
As a result, the Australia-based company decided to no longer pursue the Saskatoon facility, filed bankruptcy for its Canada-based company operating the REE processing plant in Saskatchewan, and redirected its resources toward the development of Tardiff, a much larger but lower-grade deposit at Nechalacho.
To help fund this shift of strategy, Shenghe agreed to invest up to A$14.8 million (US$9.4 million) to buy an 18.2% stake in Vital.
This began with an initial A$5.9 million (US$3.4 million) last December to acquire 589 million Vital shares at A1 cent each, which gave Shenghe a 9.99% stake in the Australian junior.
A sample of high-grade rare earths ore from the Nechalacho project in Northwest Territories.
The China-based rare earths mining and processing company also agreed to buy the high-grade rare earth stockpiles at Nechalacho at the time. Now, however, Vital has opted to take the 25% better offer from SRC, which operates a rare earths separation and metals plant right next door to Vital's former REE processing plant.
"This sale is also beneficial in deriving value from our work at Nechalacho as we continue to advance the Tardiff rare earths deposit as a long-life, large-scale project with a scoping study to examine potential size and scalability of Tardiff on track for delivery by the end of 2024," said Mark.
While technical and financial difficulties resulted in Vital scrapping its Saskatoon REE plant in favor of advancing a larger mine at Nechalacho, SRC is having better success with its rare earths processing and separation technologies in Saskatchewan.
SRC's Saskatoon plant already has the ability to separate neodymium and praseodymium, which are the primary rare earths used in the powerful permanent magnets for electric vehicle motors, wind turbine generators, and countless other applications.
In February, Natural Resources Canada (NRCan) awarded SRC C$5 million (US$3.7 million) in federal funding to support the ability to separate dysprosium and terbium, which are less abundant and higher-valued rare earths that add heat resistance and durability to REE magnets used in EV motors and wind turbines, at the Saskatoon plant.
"Additional investment into the REE industry is imperative as Saskatchewan helps develop a cutting-edge and secure REE supply chain in North America to decrease reliance on supply from China," said Jeremy Harrison, Saskatchewan's minister responsible for SRC. "Demand for these resources is increasing and Saskatchewan aims to be a world leader in supplying the rare earth market."
At least some of those rare earths entering the burgeoning North American REE supply chain will come from Nechalacho.
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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