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Ionic Rare Earths courts political interests eyeing Makuutu as strategic project

The date of: 2020-06-29
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source:S&P Global
Ionic Rare Earths Ltd. has fielded interest from entities representing government interests around the world for the critical and heavy rare earths that could be produced from its Makuutu project in Uganda within two years.
Tim Harrison, who was elevated to company CEO on June 26 after having served as Makuutu's project manager since January, revealed the global interest during an interview with S&P Global Market Intelligence. The company entered into an agreement in July 2019 to acquire up to a 60% interest in the project and changed its name to Ionic Rare Earths from Oro Verde in March.
Harrison said a number of groups in Europe, North America and Asia were attracted by the low estimate for capital expenditure and the high-margin rare earths targeted at Makuutu. About 25% of the product will be yttrium, a critical rare earth for defense applications. Rare earths are also used in electric vehicles and wind turbines and for 5G cellular technology.
The U.S. Department of Defense held talks with various companies in mid-2019 to secure minerals the U.S. government listed as critical for strategic economic and defense purposes. This included Mkango Resources Ltd., which is developing the Songwe Hill project in Malawi, and Rainbow Rare Earths Ltd., which operates the Gakara mine in Burundi.
Lynas Corp. Ltd. won a tender from the Defense Department in April for a phase-one contract for a planned separation facility for heavy rare earth in the U.S.
Makuutu's geology is similar to the ionic adsorption clay deposits in southern China, which are the cheapest and most readily accessible source of heavy rare earth oxides. Ionic is looking at less than US$50 million to build a plant to produce at least 2,000 tonnes of rare earth oxide equivalent annually, with over 45% heavy rare earths and greater than 50% critical rare earths.
The resource estimate for the project was recently upgraded to 78.6 million tonnes of ore grading 840 parts per million total rare earth oxides, or TREO, at a reduced cutoff grade of 300 ppm TREO-cerium oxide. Harrison said another upgrade is expected, given only a small part in the central exploration tenements has been tested.
Harrison said the strategic value of ionic clay is well known as it produces the bulk heavy and critical rare earths. He noted that China, which produces 95% of the world's rare earths, has been depleting its own ionic clay reserves.


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