Can you give us an introduction to your flagship Makuutu Rare Earths Project?
The Makuutu Rare Earths Project currently ranks amongst the world’s largest and most advanced ionic adsorption clay (IAC) deposits, and will be Uganda’s and Ionic Rare Earths’ flagship mine. This mine will be a long-life, low-cost, supplier of high-value magnet and heavy rare earth elements (REE).
Makuutu is a unique deposit with scale to move the needle on magnet and heavy rare earth oxide (HREO) supply and is receiving global attention as it will help Western governments secure critical elements for the new economy. The Makuutu Basket is made up predominantly of heavy rare earths such as Neodymium (Nd), Praseodymium (Pr), Dysprosium (Dy), and Terbium (Tb).
The project area comprises of six licenses covering approximately 345km2 located 120km east of Kampala, Uganda. The deposit, stretching 37km, is situated near high quality tier one infrastructure such as:
- Water available
- Highway and road access to site, plus rail
- Nearby 132kV power infrastructure with readily available low-cost hydropower
- Cell phone communications available across site
Makuutu is a high-quality basket of balanced magnet and HREO free of environmentally challenging radionuclides (including uranium and thorium).
Not all rare earths projects are created equal. Unlike other projects, which come from hard rock or mineral sands, Makuutu is a near-surface IAC mineral deposit, with a clay layer averaging 5m to 12m thick, under cover approximately 3m deep.
We proved through our base case Stage 1 DFS – meaning these figures are for only one of our six tenements for which we have a Mining Licence Application (MLA) – Makuutu will be a low CapEx project. The rich product basket from Stage 1 will produce a total rare earths oxide (TERO) production basket of 71% magnet plus heavy rare earth oxides (REO) content.
The project is swiftly advancing, with an updated MRE imminent. What do you think the update will look like in terms of deposit size and grade?
We have ambitious plans for further growth along along all tenements in the mineralized corridor – this demonstrates Makuutu’s scalability and our recent Phase 5 drill programme.
To recap, our holding is over 345km2 and Makuutu’s MRE is currently >500Mt on Makuutu Central Zone (RL 1693) for Stage 1. This area alone is estimated to provide a mine life of 35+ years.
With the other tenements, the larger consolidated project has substantial scope for future growth and increasing geopolitical importance.
The Phase 5 drill programme commenced in June on three of the five remaining tenements and is running ahead of schedule. The programme will include approximately 4,380m of diamond core drilling used for resource upgrade on RL00007, in addition to 2,230m of RAB drilling used for evaluation of exploration targets on EL00147 and EL00257.
So, once we consider our position and ability to scale up resource estimates and exploration across other tenements – Makuutu could have a mine life extended from 50 to 85 years and beyond.
Ionic recently raised its buy in for Makuutu to 60%. Are there plans to increase this in the coming years?
Yes, following the Stage 1 DFS from April 2023, Ionic Rare Earths became a majority owner of private Ugandan company Rwenzori Rare Metals Limited (RRM) and Makuutu. We have the first right over the remaining 40% stake and discussions with partners on a transaction continue to progress.
There is a broader strategic play with the increase in ownership of RRM, which will continue to position Ionic Rare Earths to truly change global supply chains.
Our strategy is three-fold, be a miner, refiner, and recycler of the magnet and heavy rare earths circular economy.
Developing a sustainable supply chain (external from China) needs scale and capacity along every step of the vertical supply chain and Ionic Rare Earths can provide that security and delivery. The Makuutu project has the size to have an impact in this area.
Owning 100% of the Makuutu Rare Earths Project will ensure Ionic Rare Earths will create an impact along every step of the supply chain from mining, refining, and recycling of magnet and heavy rare earth oxides for decades to come.
The project has similar characteristics to Chinese ionic clay-type deposits, which are currently the cheapest and most readily accessible source of heavy rare earth oxides. How will cost compare to those accessed in China, which currently dominate the supply chain of REEs?
Makuutu currently ranks amongst the world’s largest and most advanced IAC deposits outside of China. We have an outstanding metallurgical team who continually test and develop refinements to ensure that our oxides will be sustainably extracted with no harm to the environment.
The Ugandan government awarded us our ESIA certificate since the soil we will be restoring is of greater health than what we are extracting. Once we have been able to measure and report against science-based targets, this will have a net positive carbon effect and economic benefit for the farmers who will yield more crops.
Now that the demonstration plant is currently under construction at Makuutu, the team will continue to de-risk heap leaching processing methods. The philosophy at Ionic Rare Earths is to produce sustainable, traceable magnet and heavy rare earth elements. We are heavily focused on how we manage all ESG matters.
Do you think we are currently undergoing a type of de-globalization in terms of countries wanting to protect domestic supply chains, particularly in the wake of COVID and the Ukraine war?
The impact on supply chains on items such as PPE for healthcare workers, cars, or electronic devices during COVID highlighted the weakness in manufacture and supply chain pressures globally.
Outside of COVID and the war in Ukraine, Western governments have become acutely aware of the stronghold that China has on critical minerals.
Rare earths are amongst the most resource-critical raw materials, they are of the highest economic importance and at the same time feature a high supply risk.
China has a dominant position in every value addition step in conversion of mined REEs to value added products.
Developing a sustainable supply chain external from China needs scale and capacity along every step of the value chain. Ionic Rare Earths strategy is simple and clear. We will secure critical elements for the new economy – our technology will accelerate mining, refining, and recycling of magnets and heavy rare earths critical for energy transition, advanced manufacturing, and defence.
Governments such as the US, EU, and UK have all enacted policies to secure ex-China supply chains of these critical minerals to ensure the sourcing of rare earth elements and environmentally sustainable production.
Without these critical minerals, life in the new technologically advanced economy as we know it will standstill. Products such as EVs, wind turbines, electronic devices, and fighter jets require huge sources of magnet and heavy rare earth elements.
Until now, all heavy magnet and rare earths oxides and end products revolved around China’s supply chains.
There are also new policies in place in the West where new products must have a percentage of recycled sourced material within them – so this is where sustainable, traceable recycled materials will be highly sought after.
This is where Ionic Rare Earths’ strategy is different to other listed entities and will contribute positively.
That was the long version of answering your question. Yes, we are experiencing a decoupling of China which can be seen as a sort of de-globalization.
However, it is not COVID that has brough this on. It is the fact that China has a strangle hold on these critical minerals and produces these in ways which devastate the environment and villages close to where these minerals are mined and refined.
Let’s look at the circular economy of rare earths. Your Ionic Technologies Magnet Recycling Demonstration Plant in Belfast is set to produce magnet REOs in June 2023. Do you feel creating a secondary sourcing of REOs is important for the green energy transition?
Creating a secondary market for recycled, separated magnet, and rare earth oxides is a climate action imperative. It not only supports the transition – recycled magnet and HREO will also support the new economy and contribute positively to the future sustainability of the planet.
Ionic Rare Earths is now a producer of sustainable and traceable magnet and rare earth oxides (MREO). This outcome is testament to the achievement of our team in Belfast at Ionic Technologies who have produced high purity, 99.9%, separated magnet rare earths from end-of-life industrial magnets.
Recycling end-of-life industrial magnets into separated magnet rare earths oxides within a 9-month period is a brilliant outcome for our Belfast team and the UK government. This is one of the fastest proof of concepts, and the UK are the beneficiaries as it will safeguard the British EV automotive industry
In September 2022, the UK government’s Innovate UK Automotive Transformation Fund Scale-up Readiness Validation (SuRV) programme, awarded us a grant of A$2.9M.
We can mobilize this technology to assist other countries such as the US, Korea, and the EU to safeguard their own manufacturing industries.
Market analysts forecast the current US$3B global market for rare earth oxide magnets is expected to shortly be in deficit with estimates that the market would increase fivefold, to an excess of US$15B, by the end of the decade, with significant demand growth in the EU, north Asia, and the US.
Due to this deficit – governments have now mandated for producers of goods, that a portion of the source products which go into making these devices must come from recycled sources.
Our Belfast facility is key to us harnessing our technology to accelerate our mining, refining, and recycling of magnets and heavy rare earths.
Now that we have proven our recycling capability in Belfast, Ionic Rare Earths is now emerging as a front runner to help fill this material deficit in critical elements and create the full vertical supply chain for Western governments across these manufacturing markets through the philosophy of circularity.
The Belfast facility is expected to receive a steady supply in magnets to be recycled from sources such as end-of-life turbines from grid scale wind farms, and magnets and components from used electric vehicles and MRIs.
The commercialization of our recycling technology and our focus on the delivery of the Makuutu Heavy Rare Earths Project in Uganda positions us to provide a secure, sustainable, and traceable supply of magnet REOs.
What are the next steps in terms of bringing Makuutu to production?
Parallel to our activity currently underway on site, we are awaiting approval of the new mining regulations in Uganda to support the completion approval of our MLA for the Stage 1 development at Makuutu on RL 1693 (now TN03834). With strong government stakeholder relations active on the ground and having been involved in several discussions with key Uganda stakeholders, we remain positive.
Our strategic focus of Makuutu is to extend mine life to underpin the significant increase.
The Phase 5 exploration drilling programme across three of the remaining five exploration tenements will further define potential for growth at Makuutu, plus also support increased confidence on the next MLA area on RL00007 with 4,380m of diamond core drilling used for resource upgrade. Evaluation of exploration targets continues at EL00147 and EL00257 with 2,230m of RAB drilling.
Growing the resource and defining more growth potential is a key discussion point with several potential strategic partners looking at securing the potential product from Makuutu to underpin their heavy rare earth demands.
Ionic Rare Earths focus is to secure critical elements for the new economy. We will do this by harnessing our technology to accelerate mining, refining, and recycling of magnets and heavy rare earths critical for the energy transition, advanced manufacturing, and defence.
