Inks Non-Binding Deal With Global Rare Earth Giant
Shares in Ionic Rare Earths Limited (ASX: IXR) jumped 10% after the company revealed it had signed a non-binding Memorandum of Understanding (MOU) with Aluminium Corporation of China subsidiary, China Rare Metals and Rare Earth (Jiangsu) Co., Ltd (CHINALCO) in relation to the development of the company’s Makuutu Rare Earths Project in Uganda.
Highlights of the MOU include:
- Ionic and CHINALCO have agreed to use their reasonable endeavours to strategically cooperate to accelerate Makuutu mine development and production for mutual benefit; as well as
- Potential for future investment in Ionic, and/or the Makuutu Rare Earths Project directly, and/or off-take agreements, as agreed by the parties, for rare earth product produced by Ionic.
CHINALCO is the world’s largest market capitalised rare earth miner and separator, with numerous dedicated subsidiaries operating in mining and rare earth separation, including the Heavy Rare Earth Element (HREE) rich ionic adsorption clay (IAC) mines in Guangdong and Guangxi Provinces and a number of REE separation plants in Jiangsu Province, China.
Most of the global Rare Earth Oxides (REO) produced globally are initially processed and separated within China. Therefore, it is of strategic importance to Ionic, to have successfully negotiated this MOU and welcomes CHINALCO as a potential cornerstone project partner.
CHINALCO haa completed an extensive due diligence review over the past 12 months on the Makuutu Rare Earths Project, in conjunction with numerous meetings between the Ionic executive team and CHINALCO, facilitated by Ionic’s strategic advisor, Airguide.
Managing Director, Tim Harrison, said that in Ionic’s view this demonstrates the Makuutu Rare Earth Project is not only a high quality REE project, but a key globally strategic critical and heavy REE resource.
The initial due diligence completed by CHINALCO on key areas relating to the Makuutu Rare Earths Project, included the following:
- Project geology, drilling results and Mineral Resource Estimation;
- Preliminary metallurgical test work review;
- Review of product quality and integration into existing REE separation operations;
- Review of Ugandan Mining Act and Regulations;
- Review of Ugandan Corporate Business Regulations and Taxation Code, pertinent to the Mining Industry;
- Review of Ugandan National Environmental Act;
- Review of local infrastructure; and
- Review of political and country risk.
“We are very pleased to have signed this MOU which, further endorses the quality of the Project and its strategic importance and will now enable the Makuutu Rare Earths Project to rapidly advance activities in the near term. We welcome the involvement of CHINALCO and their ionic clay and rare earths separation arm China Rare Earths Jiangsu,” Mr Harrison said.
“Their knowledge on ionic adsorption clays is second to none, and their involvement would also greatly enhance and accelerate the planned development of Makuutu.
“From the outset of our discussions, it was clear that there existed a key alignment between IonicRE and CHINALCO on the development of Makuutu. We greatly welcome their expertise in de-risking the technical development and engineering, maximising the strategic value of Makuutu and its importance in the longer-term global rare earths supply chain.”
“We see Makuutu rapidly growing into a very large, long life producer of critical and heavy rare earths. Partnering with CHINALCO potentially fast tracks the development process for Makuutu and will greatly assist in value creation for Ionic.”
