American Rare Earths Signs Agreement with US-Based Novex to Develop Domestic Supply Chain

American Rare Earths (ASX: ARR) has signed an agreement with US rare earth metallurgy and metallisation company Novex to convert separated rare earth oxides from its Halleck Creek project in Wyoming into the metals required to make permanent magnets.

The memorandum of understanding (MoU) sets a framework for a long-term commercial relationship spanning process optimisation, metallisation of demonstration plant output, and the joint design and development of a domestic rare earth metal production facility.

The parties will use reasonable commercial efforts to establish the structure and commercial terms of a definitive long-term collaboration and supply agreement within 12 months, supported by regular progress reviews and technical working group sessions.

Technology Review Conducted

The MoU follows a technology review by American Rare Earths into the ways it could participate in the midstream segment of the mine-to-magnet rare earth supply chain, specifically the step from separated oxide to metal and then to precursors for magnet production.

The company screened a range of metallisation technologies and found more than one workable route, including fluoride conversion followed by calciothermic reduction, lanthanothermic reduction for volatile metals such as samarium, and high-temperature molten salt electrolysis.

The latter was found to be the cleanest option as it reduces dependence on anhydrous hydrogen fluoride and unlike lanthanothermic reduction, does not consume a saleable rare earth metal as the reductant.

The review recommended American Rare Earths advances with molten salt electrolysis as the primary development candidate, with lanthanothermic reduction as a back-up for volatile target metals.

Vertically Integrated Supply Chain

American Rare Earths chief executive officer Mark Wall said the MoU was a critical step in building a US vertically integrated mine-to-magnet supply chain.

“Our technology review demonstrated that molten salt electrolysis is the cleanest path from oxide to metal and Novex has been developing that capability in the US for years while working with various areas of the government and leading consulting companies,” he said.

“Putting our massive Halleck Creek resource alongside Novex’s technical capability is an important step in developing the cornerstone of US domestic rare earth and magnet production in Wyoming.”

Novex chief executive officer Ilija Mišković said his company “look[s] forward to metallising American Rare Earths’ oxide products and working together to advance a US rare-earth metal and alloy production facility."

Largest US Rare Earths Deposit

Halleck Creek is the largest known deposit of total contained rare earth oxides in the US, and its mineral resource estimate of 2.63 billion tonnes carries the potential to supply domestic magnet metals for several hundred years.

Located entirely on Wyoming state land, the project has drawn strong federal and state support including a non-binding US Export-Import Bank letter of interest for funding of up to US$456 million.

The MoU with Novex builds on the oxide-to-metal work that American Rare Earths commenced earlier this year and its demonstrated capability to produce separated oxides from Halleck Creek ore.

Mr Wall said the Wyoming value chain would now extend from ore, through refining and separation, to the metals that feed magnet manufacture.