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