A Shot Across the Rare Earth Bow

Yesterday, Neo Performance Materials (TSX: NEO) and Energy Fuels Inc. (NYSE: UUUU)(TSX: EFR) announced a new rare earth production initiative across European and North American critical material supply chains.

The initiative will produce value-added rare earth products from natural monazite sands, a byproduct of heavy mineral sands mined in the southeastern United States. 

Energy Fuels will process the monazite sands into a mixed rare earth carbonate in Utah for use as feed material for Neo's value-added separated rare earth production plant in Europe.  

Energy Fuels is also continuing to evaluate developing additional value-added U.S. rare earth production capabilities in Utah in the future.

This is a shot across the rare earth bow.

The two companies have essentially created a new rare earth supply chain independent of China and Russia. That would be only the second such rare earth supply chain in the world, with the other being Lynas in Australia.

The agreement will start with Neo purchasing a minimum of 840 metric tons of total rare earth oxides (TREO) per year from Energy Fuels, and should cashflow right away.  

It’s important to know it’s very scalable.

The companies have established a U.S.-Europe supply chain, and should be commended

But more is needed.

In addition to supplying rare earth carbonate to Neo... Energy Fuels is also evaluating the potential to develop U.S. separation capabilities at its White Mesa Mill, or nearby, as it works to increase its monazite sand ore supplies.

The goal is full integration of a U.S. rare earth supply chain in the coming years, in addition to supplying rare earth carbonate to European markets.

The recent surge in rare earth prices, combined with not so subtle signs that China is once again willing to weaponize its rare earth dominance, has led to companies scrambling to take advantage of the insatiable demand for raw materials that the electrification of everything brings with it.

The demand for rare earths, copper, lithium and graphite is very real.

Most rare earth companies are not real — and knowing the difference between a good story and a real company with real assets will be the difference between those who make money in the space and those who keep it.

Let's get it!