Greenland will host one of the few rare earth mines outside of China
TORONTO, Ontario, Canada, August 23, 2022 (ENS) – A new agreement between two Canadian companies is set to make the now unknown name of the Sarfartoq Rare Earth Element Project world famous, at least in the rare earth mining industry. Rare earth elements are a group of 17 metals needed to make smartphones, lasers, electric cars, wind turbines and military equipment.
Toronto-based Neo Performance Materials has agreed to pay a total of C$3.5 million to acquire from Vancouver-based Hudson Resources an exploration license covering the Sarfartoq carbonatite complex in the southwest from Greenland. The two companies intend to develop mines side by side in Greenland.
The Sarfartoq Greenland project site hosts a mineral deposit of neodymium and praseodymium, two essential elements for rare-earth permanent magnets used in electric vehicles, wind turbines, and high-efficiency electric motors and pumps that help reduce energy consumption. greenhouse gas emissions. The site is expected to become one of the largest rare earth mines in the world.
The companies – Neo and Hudson – are two of the world’s few processors of rare earths outside of China, which now enjoys around two-thirds of all rare earth mining and almost 90% of global rare earth refining. these rare and critical metals.
Neo manufactures advanced industrial materials used to provide increased efficiency and durability. The company’s products (magnetic powders and magnets, specialty chemicals, metals and alloys) are essential to the manufacture of hybrid and electric vehicles, pollution control systems, high-efficiency devices and pumps, d energy efficient lighting and water purification systems, to name a few uses.
Neo lists the benefits of Sarfartoq’s site. “Located just 60 kilometers (40 miles) from Kangerlussuaq International Airport, the project is close to the tide and a major port facility and is adjacent to one of Greenland’s best hydropower potentials,” the company says. .
But there is local opposition. In a crucial election in 2021, Greenlanders voted for a party opposed to the construction of a huge rare earth mine. reported “Courthouse News” on April 7, 2021.
Voters in Greenland have backed a left-wing party opposed to building what could become one of the world’s biggest rare earth mines.
Completion of the license sale is subject to various conditions, including approval from the Greenland government for the transfer of the license, which is expected to take about six months, according to the company.
Neo’s President and CEO, Constantine Karayannopoulos, said, “Neo is continuously pursuing supply chain optionality to ensure our customers have a reliable supply of engineered rare earth products.
“Once in production, this project will significantly increase the diversity of the global supply of rare earths for our processing facilities around the world. This is also a new step in our Magnets-to-Mine vertical integration strategy. Based on our significant experience in evaluating strategic mineral resources around the world, we believe the Sarfartoq resource in Greenland is a strategic asset that uniquely complements Neo’s European rare earth magnet growth strategy.
“This resource would complement our current supply of rare earth concentrate from Energy Fuels in the United States. We are very confident and support the Greenland government’s vision of sustainable mining as a driver of its economic development, job creation and growth. We look forward to working with Greenland to responsibly develop this resource into a producing mine, of which Neo would be the primary customer. »
Neo, through a special purpose entity, plans to explore and develop the Sarfartoq project to further diversify its global supply of rare earth ore and expand the rare earth supply chains that power the Neo’s rare earth separation facility in Estonia. This facility was recently awarded a gold medal for its sustainable practices by global sustainability auditor EcoVadis.
Neo plans to inaugurate a new rare earth permanent magnet manufacturing facility in Estonia. This new plant is intended to supply European manufacturers with the permanent magnets they need for electric and hybrid vehicles, wind turbines and energy-efficient electric motors and pumps.
The Sarfartoq project is also a key part of Neo’s Magnets-to-Mine vertical integration strategy.
Under key terms of the agreement, Hudson receives an upfront non-refundable cash payment of $250,000 upon signing the agreement. It was signed on August 22.
Neo intends to assign its rights under the Agreement to a special purpose entity controlled by Neo which would hold the license and continue the exploration and ultimately the mining of rare earth elements on the Project.
Upon receipt of approval from the Greenland government, Hudson will transfer the license to Neo or the special purpose entity. Hudson will receive an additional $3,250,000 upon closing of the transaction.
Hudson President Jim Cambon said, “We are very pleased to have signed this agreement with a world leader in the production of advanced materials. As the world faces critical rare earth element shortages outside of China, we are pleased to help bring the Sarfartoq project closer to commercial reality. This agreement provides a significant cash injection to the company and, importantly, also offers Hudson shareholders the potential to significantly increase the future value of Sarfartoq projects through equity or additional consideration.
The featured image: Neo Performance Materials team sampling for niobium, a rare earth metal, at the Sarfartoq niobium site. From left to right: Jim Cambon, president of Neo, S. Mckenzie, project geologist, and S. Leroux, project manager. 2020 Greenland (Photo courtesy Hudson Resources, Inc.)
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