Namibia Critical Metals Advances Heavy Rare Earths Project with JOGMEC Partnership

• Namibia Critical Metals is developing the Lofdal heavy rare earth project, one of the largest deposits of dysprosium & terbium outside China
• Partnered with JOGMEC (Japanese government agency) which has earned 40% of the project through $17 million investment, targeting 50% with $20 million total spend and offering full project funding with 26% carry option for NMI
• Unlike light rare earth projects producing NdPr ($65/kg), Lofdal targets dysprosium ($250/kg) and terbium ($1,000+/kg) essential for high-temperature permanent magnet applications in defense and advanced technology
• Company advancing toward Pre-Feasibility Study completion by end-2025, with ongoing pilot-scale testing, XRT/XRF sorting optimization, and mine design work targeting sub-$300 million capex
• Recent US Department of Defense deal with MP Materials establishing 70% premium floor pricing for NdPr demonstrates renewed focus on critical minerals supply chain security outside China

The global rare earth metals sector is experiencing a strategic renaissance, driven by supply chain security concerns and increasing demand for advanced materials essential to defense and clean energy technologies. At the forefront of this transformation is Namibia Critical Metals (TSXV:NMI), a company developing what represents one of the most significant heavy rare earth deposits outside of China's control.

In a recent interview, company President & CEO Darrin Campbell outlined the strategic positioning and development progress of the Lofdal project, emphasizing how the venture stands apart from the broader rare earth landscape through its focus on premium heavy rare earth elements and strategic Japanese government partnership.

The Heavy Rare Earth Advantage

The distinction between light and heavy rare earth elements represents a fundamental investment thesis differentiator that many market participants overlook. While most rare earth projects focus on neodymium-praseodymium (NdPr) production for permanent magnets, Campbell explains the superior value proposition of heavy rare earths.

"When most people are hearing about rare earths it's primarily light rare; it's the NdPr neodymium-praseodymium, which are used in permanent magnets for EV motors, wind turbines, robotics. But what you also need in those permanent magnets is dysprosium and terbium to be able to let those magnets operate at high temperature."

The pricing differential is substantial and telling. Light rare earths trade around $65 per kilogram, while dysprosium commands approximately $250 per kilogram and terbium exceeds $1,000 per kilogram. This premium reflects both scarcity and critical functionality in advanced applications including defense missile systems and laser technologies.

Campbell emphasized the production scale advantages: 

"We’re producing 1,500 to 2,000 tons of TREO (Total Rare Earth Oxides) a year, but we can produce 150 tons of dysprosium and 30 tons of terbium a year."

Strategic Japanese Government Partnership

The partnership with JOGMEC (Japan Organization for Metals and Energy Security) represents perhaps the most significant strategic asset in Namibia Critical Metals' development trajectory. JOGMEC operates with an annual budget exceeding $10 billion and maintains a mandate to secure natural resource supply chains for Japanese industry.

This relationship follows JOGMEC's successful model with Lynas Corporation, where the agency invested over $300 million over the past decade to establish Lynas as a major light rare earth supplier. Campbell explained the earning structure: 

"They are earning up to a 50% interest in the project. They've currently earned 40% right now. We are probably another year away from reaching that 50% earning by spending a total of CAD$20 M."

The partnership structure provides exceptional optionality for Namibia Critical Metalls shareholders. Upon JOGMEC reaching 50% project ownership, the company can either maintain 49% participation or accept dilution to a carried working interest of no less than 26% while having the project fully funded by Japan.

Technical Development and Process Innovation

The company has made substantial progress in metallurgical testing and process optimization throughout 2025. Pilot-scale flotation and hydrometallurgical testing has validated the processing flowsheet, while recent focus on XRT/XRF sorting technology promises to enhance project economics through grade improvement of lower-grade material.

Campbell described recent technical achievements: 

"What we've determined is that the hydrometal process of acid bake works very well on our product and it enables us to create a uranium and thorium free, high value mixed earth carbonate product at the end."

The elimination of radioactive elements from the final product creates operational flexibility, allowing the company to ship concentrate to third-party separation facilities globally rather than requiring on-site separation infrastructure. This design decision reflects input from Japanese partners seeking supply chain flexibility.

Process optimization through XRT/XRF sorting has shown promising results in upgrading the 0.2% head grade material up to 20 times concentration, bringing it to 3-5% TREO levels comparable to larger light rare earth projects. This technological approach could significantly reduce processing costs while maintaining production targets.

Interview with CEO, Darrin Campbell

Infrastructure & Development Timeline

The Lofdal project benefits from Namibia's established mining infrastructure, though Campbell acknowledged some challenges in securing power and water supply commitments from national utilities. The project requires approximately 12 megawatts of power, planned as a hybrid system combining solar generation with national grid connection.

Water supply will be secured through on-site aquifer development, with drilling activities currently underway. The company has completed geotechnical drilling and mine design work, targeting a strip ratio of 4.5-5:1 with ongoing optimization efforts.

Capital expenditure estimates have increased modestly from the 2022 preliminary economic assessment, with current targets under $300 million compared to the previous $230 million estimate. Campbell attributed this increase to inflationary pressures while maintaining that the project represents 

"A very modest capex for this project for the amount of revenue that we have can potentially generate."

Pre-Feasibility Study Progress

The Pre-Feasibility Study remains on track for completion by year-end 2025, with final XRT sorting test results expected within two months to inform final flowsheet and economic modeling. Campbell expressed confidence in the timeline: 

"All of the PFS is still fully funded with the JOGMEC earning. They're at about 17 million out of the 20 to earn 50%."

The study will incorporate recent pilot testing results, optimized mine design, and updated infrastructure assessments. Production targets have been refined to 1.5-2 million tons per annum throughput at higher grade, potentially reducing mine life by approximately two years while maintaining a 15-year operational timeline.

Market Context

The recent US Department of Defense investment in MP Materials, including $400 million in equity and 100% offtake agreements, has fundamentally altered the rare earth investment landscape. Campbell highlighted the significance: 

"One of the most important pieces of that news release that came out for me was the floor price that they established for NdPr. Essentially establishing a 70% premium to current spot prices on NdPr that has the potential to be rocket fuel for other projects including ours."

This government intervention validates the strategic importance of rare earth supply chain security and suggests similar support mechanisms may extend to heavy rare earth projects, particularly given their defense applications and extreme supply concentration in China.

Industrial Partnerships

JOGMEC's business model involves early-stage project development followed by introduction of Japanese industrial partners for production and offtake. Campbell reported ongoing discussions: 

"We have had many meetings over the last three years with about a dozen of the largest industrial companies in Japan that you would think be interested in the rare earth sector."

Recent developments include JOGMEC's joint venture with Iwatani Energy to invest in Carester, a French rare earth separation company actively seeking heavy rare earth feedstock. This creates potential vertical integration opportunities for Lofdal production.

The Investment Thesis for Namibia Critical Metals

• Premium Product Focus: Targeting dysprosium ($250/kg) and terbium ($1,000+/kg) versus light rare earths ($65/kg), providing superior revenue per ton of production
• Strategic Government Partnership: JOGMEC backing with $20 million investment, potential 50% project ownership, and full funding option with 26% carry provides exceptional risk mitigation
• Supply Chain Security Theme: Heavy rare earth scarcity outside China aligns with growing Western supply chain security initiatives, as demonstrated by recent US DoD investments
• Proven Metallurgical Process: Pilot-scale testing validates hydrometallurgical flowsheet producing uranium/thorium-free concentrate suitable for global third-party separation
• Scalable Production Profile: Targeting 150 tons dysprosium and 30 tons terbium annually from compact operation, providing $120-200 million annual revenue potential
• Multiple Exit Strategies: Structure provides options including full buyout by JOGMEC/Japanese industrial, third-party acquisition of minority stake, or dividend-yielding royalty position
• Technical Differentiation: XRT/XRF sorting technology enables economic processing of lower-grade material, potentially extending mine life and improving project economics
• Infrastructure Advantages: Namibian mining jurisdiction with established infrastructure, though power/water solutions require execution
• Near-Term Catalysts: PFS completion by year-end 2025, JOGMEC earning to 50%, and potential Japanese industrial partner introduction

The global heavy rare earth market represents one of the most acute supply chain vulnerabilities in the critical minerals complex. China controls approximately 70% of global rare earth production, creating strategic dependencies for Western defense and technology industries. Unlike light rare earths where projects like MP Materials and Lynas provide alternative supply, heavy rare earth sources remain extremely limited outside Chinese control.

This supply concentration becomes particularly concerning given heavy rare earths' essential role in advanced permanent magnets required for high-temperature applications in defense systems, aerospace, and next-generation electric vehicle motors. The recent US Department of Defense intervention in rare earth markets, establishing premium floor pricing and direct investment, signals governmental recognition of supply chain risks and willingness to support alternative sources.

Dysprosium and terbium demand continues growing driven by wind turbine permanent magnets requiring high-temperature performance, electric vehicle motor efficiency requirements, and expanding defense applications. The pricing premium these elements command reflects both scarcity and criticality, with terbium trading at 15-times light rare earth prices.

The convergence of supply security concerns, premium pricing, and limited alternative sources creates a compelling investment environment for heavy rare earth development projects with credible technical and financial backing.