December 04, 2022

In-house production key to making Energy Fuels the world’s lowest cost producer of rare earth metals

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Energy Fuels takes giant step towards complete, in-house, vertical integration in the production of rare earth permanent magnet alloys

Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) has just this week announced that it will buy, subject to due diligence, a huge Brazilian deposit of heavy mineral sands, which it will mine to produce a concentrated mineral mix that will contain zircon, ilmenite (titanium), and monazite. This concentrate is expected to be sold to partner companies, which will extract the zircon and ilmenite as payables, and the residual monazite, a waste product in zircon/ilmenite processing, will be conveyed at a nominal cost (as part of the arrangement to supply the heavy mineral sands to partners) to Energy Fuels’ White Mesa, Utah, where the monazite will be cracked and leached to extract a clean rare earth content as a mixed carbonate and to extract and sell or legally dispose of its uranium and thorium content.

Energy Fuels is already buying, and processing monazite produced in the above way from the zircon/ilmenite operations of Chemours in Georgia, but the Brazilian purchase will allow Energy Fuels to diversify and lower its cost of monazite concentrates.

The in-house production of monazite rich heavy mineral sands by Energy Fuels will be the foundation of its program for the vertically integrated (in-house) production of rare earth metals and alloys from (in-house) separated and purified individual and blended rare earth salts.  

Energy Fuels operates the only operating uranium processing “mill” in the United States and the only facility in the United States in the U.S. capable of processing monazite for the recovery of uranium for sale to nuclear power plants, and the recovery or legal disposal of the thorium and other radionuclides associated with monazite. 

The company has already begun processing purchased monazite into a mixed rare earth carbonate, and currently has the capacity to produce thousands of tons of such mixed rare earth carbonates per year. Energy Fuels’ mixed carbonate is the most advanced rare earth product being produced at a commercial scale in the U.S. today. The company is also making major strides in producing separated and refined individual and blended rare earth products at its mill.

Comparatively, monazite contains up to 50% more of the recoverable core magnet metals, neodymium and praseodymium than the bastnaesite mined at Mountain Pass, California.

Energy Fuels is finalizing a scoping study for a dedicated, rare earths, solvent extraction separation system and is finalizing the commercialization of a new rare earth metals and alloys production process demonstration.

Within 24-36 months Energy Fuels has the potential to be the world’s lowest-cost producer of separated individual rare earths and will therefore the lowest cost producer of rare earth metals and alloys. No government subsidies have been needed. Just managerial knowledge, experience, and skill. 

Energy Fuels already is a major domestic supplier of uranium and vanadium In fact, the company announced at its AGM, earlier this week, that it has signed a decade long supply deal with two American utilities to provide them with more than 4,000,000 lbs of uranium. This contract will bring in more than USD$200,000,000 over its life. 

Energy Fuels is a producing and growing domestic American critical metals processing hub.

Disclosure: Jack Lifton is a member of  the Advisory Board for Energy Fuels Inc., and may hold securities or options in some of the companies mentioned in the above article.

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5 responses

  1. Marie Avatar
    Marie

    How does their cost basis compare to Vital Metals as Vital say they will have the lowest cost? The simplicity of Vitals separation process and the fact that they have all their material onsite and (in a stable country), must be a major factor.

  2. Jack Lifton Avatar
    Jack Lifton

    Energy Fuels cost basis of monazite is confidential, but it is competitive. Vital does not “separate” its bastnaesite ore into individual rare earths, or yet, produce a clean mixed carbonate. Vital did have to “dig” a mine, although I understand that it is, so far, pursuing an open pit operation rather than tunneling. The steps for any material are mining, concentrating, cracking, leaching, separation and purification of the desired elements in chemical forms. The Pre-separation form of any rare earth mixture is a clean (free of radiation and interfering non-rare earths) pregnant leach solution, which is fed into a separation system. I am not aware of Vital having reached this last stage, although Energy Fuels has shipped a clean mixed carbonates solid to its first commercial customer, Neo Performance Materials, which then dissolves the solid into a pregnant leach solution, which is then fed into its dedicated solvent extraction system. It is very important to keep one’s terms straight.

  3. Rare Earths Investor Avatar
    Rare Earths Investor

    Thanks for the article. As a focused RE investor (for part of my portfolio – never all eggs in one basket, even watching closely) Energy Fuels begs the RE investor question, to what degree is the company actually a RE investment rather than more a multi-metal play?

    As to Vital Metals (I hold), this is clearly a RE niche investment possibility and offers potentially a very different retail investment track to Energy Fuels.

    However, both these companies have one major similarity they are moving towards prime mover status in the N. American race to RE value chain emergence.

    GLTA – REI

    1. Jack Lifton Avatar
      Jack Lifton

      Rare Earths Investor,
      There is a political difference also between the companies. As I understand it Vital is selling material to both ReeTEK (Norway) and Ucore (USA) for separation of the individual payable REEs to the customers of ReeTEK and Ucore, whoever they may be. Energy Fuels plans to ultimately mine, separate, and process REEs to magnet alloy form for customers of its choice, currently planned to be the US consumer and military industries. Thus, the investment opportunities for the two companies are based on quite different market strategies and levels of integration. I salute both companies for differentiating themselves from the “talkers” by being “doers.”

  4. Warren Avatar
    Warren

    Vital Metals style is very similar to Lynas Rare Earths with some differences in a few areas and same in others.

    Energy Fuels is different in a lot of fields in terms of the way they are processing the material and how cost affective it is for them to produce. I’m an investor of both companies and been watching them for awhile now.

    In my own opinion Energy Fuels is far out performing Vital metals in terms of the product they are aiming for and the way they are coming to the table in terms of cost basis of the product which reminds me of some other big players in the market.

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