USA Building A Critical Minerals Hub in Utah?

I spotted a news release this week which got me excited. It could be the precursor to a big move by the US government to take back control of its Rare Earth strategy. If it is, this is huge.

Rare Earth Elements (REEs)

Most people don't actually know what rare earths are or what they are used for.

Sounds way too technical, and not as exciting as gold, or explosive (pardon the word) as uranium. Rare Earth Elements (REE) or Rare Earth Metals (REM) are used in lights, screens, glass, as catalysts, in magnets, in batteries and steel alloys and also for critical defence uses and in the manufacture of aircraft: we will write up a more in-depth article about the who and the where. But for now, let's keep this simple.

Anyone with any semblance of knowledge about the Rare Earths space recognises its strategic importance. They will also know that 90% of the market is controlled by China. The Chinese government has got a track record of weaponising this fact against countries who do not bend to their will on given topics. It would also be fair to say that relations between the Donald Trump / USA and the Chinese government has been strained of late. So what do you do?

Energy Fuels (NYSE: UUUU)

Step forward Energy Fuels. We spoke to them a few weeks ago following an announcement that they made about processing rare earths and radioactive material at their White Mesa Mill. It was interesting but I didn't think much of it. Just more so-so news flow, typical of companies looking for the oxygen of publicity. That was until I saw their recent announcement about engaging Constantine Karayannopoulos & Brock O'Kelley. And a light bulb moment happened.

Just the slightest amount of digging reveals Karayannopoulos and O'Kelley are big hitters in the rare earth space. Karayannopoulos the CEO and later Chairman of MolyCorp and selling it for c.$1.3Bn. Now, he is Chairman of Neo Performance Materials (TSX: NEO). O'Kelley was in operations for Mountain Pass in the 1990s and the 2000s. Both have extensive REE processing facility design, start-up experience, operations, and downstream value-added manufacturing of advanced REE products. What Energy Fuels brings to the party is a technologically sophisticated, multi-licenced, regulated and controlled environment in the shape of the White Mesa Mill. Put all the above together and you have the beginnings of something quite exciting. Let me tell you why.

Disrupting The Chinese Monopoly

Lots of companies, and countries, have talked about competing with the Chinese in the rare earths space. None have managed. But now the same US Senators who have been beating the drum about the strategic importance of uranium, also see rare earths as critical to the safety and security America. These are the same US Senators that Energy Fuels have been courting through the entire Section 232 process. Relationships have been established and formed. Ideas have been shared. A mill that can process radioactive material, such as uranium and rare earths, in the USA, will have been on the agenda. The mill can even extract uranium from rare earths. Now things just got interesting.

Energy Fuels are clearly the leading US producer of uranium, when the taps get turned back on. They also control the economics of the other US based uranium juniors, because they own the keys to the mill. Non Energy Fuels shareholders won't like this fact, but it has always been thus in the mining. Uranium is, and will continue to be, their core business. But make no mistake, Energy Fuels intends to make a significant contribution to the bottomline line with rare earths feed business. The potential contribution will be counted in the tens of millions.

Think it is time to start paying attention to White Mesa's potential for multiple revenue streams, and its technical advantage as the only meaningful critical minerals hub in the USA.

Let me know what you think. Can you see rare earths being at the heart of the American Dream again?