The Makuutu Rare Earths Project in Uganda, 60% owned by Ionic Rare Earths (ASX: IXR, IonicRE), is a large-scale ionic absorption clay (IAC) project. It is well-supported by existing Tier-One infrastructure and is on track to become a long-life, low capex, scalable, and sustainable supplier of high-value magnet and heavy rare earths oxides. In March 2023, Ionic announced a positive Stage 1 definitive feasibility study (DFS) for the first of six tenements to progress to a mining licence application, which is pending in Uganda. The Makuutu Stage 1 DFS defined a 35-year initial project producing a 71% rich magnet and heavy rare earth carbonate (MREC) product basket, and the potential for scale up through additional tenements.
IXR’s magnet recycling business, Ionic Technologies, has executed landmark partnership agreements with Ford Technologies Limited, Less Common Metals Limited, and the British Geological Survey to create a UK rare earth supply chain from recycled magnets. Can you go into some of the details of the partnership and what it means for Ionic?
Ionic Technologies International Ltd, is a 100% owned subsidiary based in Belfast, UK. The company has secured a collaboration partnership with Ford Technologies and Less Common Metals (LCM) to develop a UK rare earth supply chain from recycled magnets. Ionic Technologies is also in partnership with the British Geological Survey to complete a feasibility study and supply chain analysis for a UK magnet recycling facility. Both programmes have been successful in obtaining UK government support through grant funding.
Ionic Technologies has developed rare earth element separation and refining technology, and has applied this to the recycling of spent permanent neodymium-iron-boron (NdFeB) magnets to enable the creation of sustainable, traceable, and sovereign rare-earth supply chains. The technological offering from Ionic Technologies is market leading, making the highest purity oxides from secondary sourced material in the Western world.
Each stage of the process from magnet recycling to electric vehicle (EV) testing will generate waste (magnets and swarf), including the magnets used in Ford’s EV motors. Ionic Technologies will recycle this material, thus completing a totally circular rare earth supply chain within the UK.
Currently, Ionic Technologies is producing from its demonstration plant in Belfast, with potential to be pushing towards commercialization in the very near term.
Looking at the Makuutu Heavy Rare Earths Project, the company recently submitted a mining licence and is working with the Ugandan government to help speed up the process. How will the project advance once this licence is approved?
Right now, the company is finalizing its fifth phase drill programme, which continues to define more resource growth potential at Makuutu. We have also been provided with approval from the Ugandan government to build a demonstration plant, which is now in production. We expect to be producing MREC later this year with several potential customers keen to access the magnet and heavy rare earth basket from Makuutu.
We have also recently appointed DRA Global to help the company map out the potential growth in production at Makuutu supported by what we expect will be further resource growth as the other tenements progress towards mining licence agreements (MLAs).
Would you consider the Ugandan government enablers of the mining industry?
To date, support from key stakeholders within Uganda has enabled the Makuutu Project to rapidly progress towards the MLA.
IonicRE recently hosted a delegation from Uganda at the Africa Down Under Mining Conference 2023 in Perth. The Ugandan Minister of Energy and Mineral Development, Hon. Dr. Ruth Nankabirwa Ssentamu, has publicly indicated her support for the Makuutu Project, stating, “Uganda is committed to the development of its mining sector, in line with the Mining and Minerals Act 2022, and its 2040 Vision. Under this new framework, we look forward to granting approval of the mining licence application to Ionic Rare Earths Ltd. and Rwenzori Rare Metals Ltd. This is a flagship project to establish Uganda as a strategic partner in global supply chains for heavy rare earths”.
IonicRE welcomes the Ugandan government’s support for expediting approvals for the Makuutu Project where the new laws in Uganda’s mining sector had facilitated a conducive mineral investment climate.
IonicRE welcomes the Ugandan government’s support for expediting approvals for the Makuutu Project where the new laws in Uganda’s mining sector had facilitated a conducive mineral investment climate
Ionic also released some recent drill results from its Makuutu project. Can you go into some of the details of the results, and how they have influenced the plan moving forward?
The RAB assay results confirmed the expected potential of the eastern EL00147 and northwestern EL00257 tenements to provide additional growth potential for a much larger Makuutu Project in years to come. Of the 76 holes drilled, 69 have returned rare earth bearing clays above the resource cut-off, with metallurgical test work expected later this year to confirm the potential for these new zones.
These zones sit outside the current Stage 1 DFS and will likely support additional processing modules given the potential scale observed in the drilling results, further supporting potential for a multi generation magnet and heavy rare earth opportunity at Makuutu.
Infill resource drilling on RL00007 has just been completed and is expected to support an updated resource estimate in early 2024.
Refining heavy metals is notoriously complex and Europe, for example, lacks the refinery capacities to separate the minerals found in the Makuutu basket. How does Ionic intend to deliver heavy rare earths to the Western markets facing these challenges?
Given Makuutu is the most advanced IAC project globally with product not committed to China, IonicRE is well advanced in understanding who will potentially have capacity to separate the Makuutu basket in the Western world by the time initial commercial production is expected in 2025. The company has several discussions underway at present where the Makuutu MREC product, with its 71% magnet and heavy REO content, will be crucial for the development of any Western heavy rare earth refining capacity.
The company expects to be able to place the Makuutu product into the Western supply chain over the next 12 months, pending award of the ML at Makuutu, increasing ownership in the project and producing appreciable amounts of MREC from the demonstration plant from late 2023.
The resounding message today is that rare earths are a critical part of decarbonizing our global fleet. The focus and emphasis need to be on how we bring forward new production in the future. Do you think investors are doing enough to support this?
I think investors understand that the energy transition and geopolitical climate is driving a compelling thematic for rare earths, but in essence, the West needs the right projects to go to production. In our opinion, that’s highly sought after IAC projects that can produce the blend of magnets and heavy rare earths required to underpin a Western supply chain development.
Given the noise in the space, the competition for investment is significant, and those investors who best understand the rationale or importance of one project over another are likely to see the best returns. We think the offering from IonicRE across the primary supply from our development ready IAC Makuutu Project represents a compelling opportunity (as does our secondary supply and integration potential offered by Ionic Technologies), as low capital developments producing the right blend of magnet and heavy rare earths the new supply chains will need.
Holistically, it’s the support from government initiatives that will see these projects advance to production, supported by favourable incentives to ensure that magnet and heavy rare earths are available for the Western supply chains to deliver the critical raw materials to meet ambitious energy transition targets and sovereign capability.
