EDITOR: | March 22nd, 2014 | 12 Comments

$145 million bonds show Alaska’s unprecedented support to Ucore’s Bokan-Dotson Ridge project: marks end of sink-or-swim policy

| March 22, 2014 | 12 Comments
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In an unprecedented move to support the rare earth industry, the Alaska Senate Labor and Commerce Committee recommended a new bill (click here) which would grant the Alaska Industrial Development and Export Authority (AIDEA) the ability to issue bonds to finance the infrastructure and construction costs of Ucore’s Bokan-Dotson Ridge rare earth element project.

Should the State of Alaska pass the bill, it will mark a new U.S. policy in the rare earth industry as thus far the U.S. has supported research efforts, letting companies struggle on the own in the China-dominated market.

The bill marks the end of the sink-or-swim rare earth policy that has prevailed in the West.Bokan-Alaska

The bill states that the Bokan-Dotson Ridge rare earth element project’s surface complex will be financed and owned by the authority and leased back to Ucore over ‘life of mine’ with a nominal repurchase arrangement at facility close. The principal amount of the bonds provided by the authority for the Bokan-Dotson Ridge rare earth element project may not exceed $145,000,000 and may include the costs of issuing bonds considered reasonable and appropriate by the Alaska Industrial Development and Export Authority (AIDEA).

Although the bill has yet to go through a number of legislative steps it is an extension of the efforts initiated by legislators last year to push for the development of REEs. In April 2013, the Alaska State Legislature unanimously voted in favor of Senate Joint Resolution 8, which emphasizes the continued and increased exploration, extraction, processing and production of REEs in Alaska.

Senate Joint Resolution 8, is also a treasure trove of support to Ucore’s project as it resolved: “that the Alaska State Legislature urges state agencies that administer permits required for the development of the rare earth elements in the state to expedite consideration and issuance of permits required for the development of rare earth element deposits in the state.

As well, the resolution emphasizes national self-reliance for rare earths: “whereas the development and expansion of extraction, processing, refining, and production are needed to provide the United States with self-reliance in technologies that depend on rare earth elements.

Western governments have been slow to react to China’s stronghold on the rare earth industry. A 2010 US Department of Energy Critical Materials Strategy report suggests that the U.S. economy can be made to suffer dearly without rare earth elements. As well national security can be threatened seriously without a substantial and stable supply of rare earths. Rare earths are critical to many advanced weapons systems and equipment.

The Bokan–Dotson Ridge project, Ucore’s primary focus, is the 100% owned Ucore. The Bokan-Dotson Ridge REE project is located 60 km southwest of Ketchikan, Alaska and 140 km northwest of Prince Rupert, British Columbia and has direct ocean access to the western seaboard and the Pacific Rim, a significant advantage in developing near term production facilities and limiting the capital costs associated with mine construction. The Bokan property is particularly enriched with heavy rare earth elements, including the critical elements Dysprosium, Terbium and Yttrium. Approximately 40% (by weight) of the rare earth elements contained on the Dotson Ridge property are heavy rare earths elements. “The Bokan-Dotson Ridge Project is the highest grade of NI 43-101 compliant heavy rare earth elements in the US with an estimated timeline to production as 3 years” (Source: Ucore).

The bill is expected to be sent to the AK Senate floor for a vote as early as next week.  If accepted by the Senate, it will then go to the Speaker of the House who will set a hearing for the House of Representatives.  If the House of Representatives accepts the bill, it will then be sent to the Governor Sean Parnell for ratification into law.


Dr. Luc Duchesne

Editor:

Dr. Luc C. Duchesne is a Speaker and Author with a PhD in Biochemistry. With three decades of scientific and business experience, he has published ... <Read more about Dr. Luc Duchesne>


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Comments

  • Veritas Bob

    Ucore has been holding steady at 3 years to production for the last 3 years. Here’s to 3 more!!

    March 22, 2014 - 6:02 PM

  • aurelius

    Another huge waste of taxpayers’ money.

    March 23, 2014 - 7:46 AM

    • J. Best

      Make sure you read the comment below by hackenzac. Your statement is shortsighted.

      March 23, 2014 - 6:26 PM

  • Springtrader

    Dr. Duchesne; Would you mind clarifying the point you were making in the following sentence? “The bill states that the Bokan-Dotson Ridge rare earth element project’s surface complex will be owned and operated by the authority or financed under.” Thank you.

    March 23, 2014 - 9:44 AM

    • Tracy Weslosky

      Good eye Springtrader. Dr. Duchesne had an incomplete sentence, which has been edited to say the following: “will be financed and owned by the authority and leased back to Ucore over ‘life of mine’ with a nominal repurchase arrangement at facility close.” — thank you kindly.

      March 24, 2014 - 9:18 AM

  • hackenzac

    Since Alaska doesn’t have a sales tax or a personal income tax and the Permanent Fund was seeded years ago with 11 billion of new oil royalty money due to OWNERSHIP of the resource, there’s no “taxpayer” waste so I don’t know what taxpayers from OTHER states are sniffling about as it’s no skin off of their noses. Just who’s taxes are these taxpayers worried about? ARCO’s? You can maybe argue that the state is being hasty but save the whining taxpayer schtick for places like New Jersey where they shake their fists about it as well.
    For the 50 billion dollar Alaska Permanent Fund, this loan is not a grant but it is an investment in the economy of SE Alaska. Ucore just jumped out in front in my estimation but I always knew that the location was a bigger plus than most of us realized. Alaska doesn’t like its fishing fleet in Seattle and oil men from Texas. There’s a pride thing going on here that we in the lower 48 don’t understand. It’s a small state but it’s huge. I would like to congratulate them for thinking big. They should smarten up about aquaculture as well. They sure have the coast for it.

    March 23, 2014 - 1:02 PM

    • J. Best

      Great comment, I could not agree with you more.

      March 23, 2014 - 6:27 PM

      • Tracy Weslosky

        I would also like to congratulate everyone involved in coming up with a creative way to achieve sustainability, provide work for the Alaskan community — and revenue, which will undoubtedly enhance everything from infrastructure such as education and roads. Having been to Alaska, it is a stunning place to live and raise a family. Felt a sense of strong community…

        March 24, 2014 - 9:22 AM

  • bourque

    Still have to make money at the end of the day making oxides. Don’t think that’s going to happen with Ucore. See all of JL’s assessments. Need to make the metals and alloys. That’s where the money/profit is. Do gold producers sell concentrated gold ore? Copper ore? Silver ore?

    March 23, 2014 - 3:45 PM

    • David Mortimer

      Jack Liffton endorses UCORE as one of his picks to have a profit making HRE mine so I don’t know where you got that from also it has the potential to provide the US with all the HRE it needs for its green and defense industries not profit making? Hardly!

      March 25, 2014 - 7:39 AM

  • Daniel

    Greenland signed MOU with China’s NFC subsidiary Guangdong Zhujiang Rare Earths Company to create a full value chain. The race is on for the world heavy deposits.
    How can a market system compete when state funded mines are given a franchise with technological suport and financing?

    March 24, 2014 - 2:47 AM

  • Market is like "waiting for water to boil" | InvestorIntel

    […] on significant political news. Dr. Luc Duchesne penned a feature on Ucore this weekend titled $145 million bonds show Alaska’s unprecedented support to Ucore’s Bokan-Dotson Ridge project: ma… as a follow up to the news release put out by the Alaskan government on Friday, March 21st (click […]

    March 25, 2014 - 9:49 AM

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