Building a Rare Earth Supply Chain: An Interview with Ionic Rare Earths

• IXRE is developing a rare earths supply chain from its project in Uganda to a US refinery and into magnet and battery manufacturing.
• Work is underway on the mining license application and refinery scoping study to advance the project. The goal is to get the mining license approved in Q1 2023.
• IXRE has established a new technology facility in Belfast and is now producing rare earth products like magnet metals from recycling. This validates the refinery technology.
• There is strong demand from auto companies pivoting to EVs, but education is needed on the full rare earths supply chain beyond just lithium batteries.
• 2023 will see further progress but fully building out the ex-China supply chain will take time. The focus is on ensuring downstream processing and end customers are secured.

About Ionic Rare Earths

Ionic Rare Earths (IXR) is an Australian mining company developing a large-scale rare earth project in Uganda, East Africa. The company aims to build an integrated supply chain, from mining the rare earth minerals to refining and processing them into advanced materials required for electric vehicles, wind turbines and other technologies. Ionic Rare Earths is led by Managing Director Tim Harrison.

Interview with Tim Harrison, Managing Director of Ionic Rare Earths Ltd

The Makuutu Rare Earth Project

Ionic Rare Earths' flagship project is the Makuutu rare earth deposit in Uganda, which is among the largest known rare earth deposits globally. Spanning over 200 sq km, it has potential for multi-decade production.

The company is currently finalizing studies and permit applications to advance the project. A mining licence application is underway, with approval targeted for Q1 2023. This would enable moving to a demonstration plant to prove the economic viability of the deposit at scale.

According to Harrison, the demonstration plant phase over 6-9 months during 2023 will be key. It will validate assumptions on ore grades and processing methods, providing crucial data to de-risk Makutu for future investment decisions.

Developing Processing Capabilities

A key part of Ionic Rare Earth's strategy is building downstream processing capabilities to produce advanced rare earth materials. This moves beyond just mining and separating rare earth oxides to produce the alloys and magnets needed by technology manufacturers.

The company has invested substantially in facilities and expertise at its Technology Metals division in Belfast. This facility is producing early samples of neodymium, praseodymium and other rare earths. Over 2023, capabilities will be expanded to eventually process the full range of rare earths from Makuutu.

Building an Ex-China Supply Chain

According to Harrison, a driving force behind Ionic Rare Earths' strategy is the global push to develop rare earth supply chains independent of China. With China controlling over 80% of current rare earth processing, governments and manufacturers worldwide want alternative sources.

The company is focused on developing an integrated supply chain spanning mining, processing and metal/alloy production in the US and Europe. This includes talks underway with major automakers like Ford and GM around meeting their needs for electric vehicle magnet materials.

Harrison emphasized that building these new supply chains will take time and involve downstream partners across metals manufacturing and magnet production. But it represents a major opportunity for companies like Ionic Rare Earths that can provide a diversified basket of rare earths mined and processed outside China.

Funding Growth Plans

With A$23 million in cash reserves, Ionic Rare Earths is funded for its near-term work plan including the demonstration plant and feasibility studies. Further investment will be required down the track for full-scale development of the Makutu mine and refinery projects.

Harrison noted that government funding support is flowing to build domestic rare earth supply chains, evidenced by the US Department of Energy's recent $2.8 billion investment into EV battery materials processing. Attracting this funding will be important given the scale of capital required.

The company is also in talks with automakers and other end-users about strategic partnerships and off-take agreements to fund growth. Overall, Harrison is focused on educating investors and stakeholders about the massive potential as rare earths move into the spotlight amid the global energy transition.

Conclusion

With its large-scale Makuutu deposit and move into downstream processing, Ionic Rare Earths aims to be a pioneer in rare earths amid the global push for supply chain security. It represents a long-term strategic play on critical energy transition materials rather than quick returns.

If the company can continue executing on its plans to prove Makuutu's viability during 2023, it will be well positioned to capitalize on accelerating demand as automakers and other manufacturers look to shore up supplies. Government funding appetite for domestic rare earth infrastructure should also open doors.

But risks remain around successful permitting, financing and expansion of processing capabilities. Makuutu's full potential is still to be proven. Given this, investors should view Ionic Rare Earths as a speculative opportunity to gain exposure to what looks set to be a key strategic industry for energy transition. Careful due diligence is recommended.