Australia-based Hexagon Resources has signed a binding investment agreement for an option to acquire 49% interest in an advanced downstream rare-earth element separation technology developed by US-based Innovation Metals (IMC).
IMC’s RapidSX separation technology is designed to enable current and future rare earth producers outside of China to serve US, European, Japanese and Korean markets while mitigating the current extreme concentration of rare-earth supply and separation capability in China.
The rare earth elements (REE) are said to be essential for the continued growth of electric vehicles (EVs), renewable energy, a wide range of technical and electronic devices, as well as critical military and defence applications.
Hexagon managing director Mike Rosenstreich said: “The lack of US-based downstream REE separation capacity presents a serious vulnerability to US national security and the security of its allies, as REEs are critical for defence technologies and US economic growth plans. REEs are also vital non-substitutable components of renewable-energy supply chains, critical to meeting America’s future economic, energy and environmental goals.
“Without downstream capacity to separate and purify REEs, the USA is unprepared for potential supply disruptions, price spikes and trade disagreements related to REEs. It is our intention to remedy this situation with the successful commercialisation of the RapidSX approach to REEs.”
Commercial demonstration plant to be completed in 2020
As part of the deal, IMC and Hexagon’s wholly owned subsidiary Energy Materials of America will form a joint venture vehicle, American Innovation Metals (AIM), to enable construction and operation of an independent, full-scale RapidSX-based rare-earth separation plant in the US.
Under the terms of the deal, Hexagon will invest $2m into the construction of a commercial demonstration plant as well as pay further $4m as a deferred consideration to IMC.
The commercial demonstration plant will feature IMC’s RapidSX separation technology, which is said to be a proven, de-risked solvent-extraction approach.
Scheduled to be completed in the third quarter of 2020, the demonstration plant will be equipped to have a production capacity of between 60,000kg and 80,000kg of rare earth oxides per year from a site in North America.
Hexagon said in a statement: “The rare-earth processing business meshes well with Hexagon’s build-out of downstream processing of energy materials and is well covered by the US team that the company has already assembled.”
The deal is subject to Hexagon shareholder approval.
