Ramaco eyes REE stockpile at Wyoming mine

Coal producer Ramaco Resources (NASDAQ: METC, METCB) said it plans to set up a strategic stockpile of rare earth elements (REE) and critical minerals at its Brook mine in Wyoming.

The stockpile is intended to address both private and public needs for secure, reliable access to REE and critical minerals vital for critical rare earth applications, Lexington, Kentucky-based Ramaco said Monday in a statement. Ramaco has teamed up with a “nationally recognized” commodity structuring and financial advisor, which it didn’t identify, to build the terminal.

Located about 525 km northwest of state capital Cheyenne, Brook holds the largest unconventional rare earth deposit in North America, according to the United States Department of Energy’s National Energy Technology Laboratory.

Ramaco’s board recently authorized a plan to almost triple Brook’s projected rare earth and critical mineral oxide output to about 3,400 short tons a year from an earlier target of 1,240 tons. This is based on an announced goal by Ramaco of more than doubling coal production to 5 million short tons per year.

Rare earths push

News of the proposed stockpile comes as the US ramps up efforts to rebuild a domestic supply chain to lessen the effects of Chinese dominance over the minerals and metals that power the energy transition. China accounts for about 90% of rare earth refining and permanent magnet production, while dominating the production of metals such as lithium, cobalt, graphite, nickel and copper.

Brook could be the second new REE mine to open in America in 70 years after MP Materials (NYSE: MP) Mountain Pass mine in California restarted operations in 2018. The Brook property spans over 64 sq. km, with about 18 sq. km permitted so far. Mining on the site began in 1952 and stopped in 2002.

Wyoming also hosts American Rare Earths’ (ASX: ARR) Halleck Creek project, one of the largest rare earths projects in the US by tonnage. In August, ore from that project was for the first time in the country made into rare earth oxide concentrates for a Pentagon-linked agency.

Ramaco intends to apply for the required permits to allow it to expand mining of the remaining acreage. Recent land acquisitions near the property have expanded the company’s fee land holdings in Wyoming for future development and mineral storage potential.

Critical minerals jackpot

Brook is believed to be one of the world’s only primary source for scandium, gallium, and germanium, Ramaco said. The site is also believed to contain significant quantities of heavy REEs, including dysprosium and terbium, which are essential to make permanent magnets and advanced defence systems, as well as light REEs such as neodymium and praseodymium.

The REEs at Brook are comingled with coal and related clay and shale strata, a significantly softer material compared with conventional hard rock deposits, Ramaco says.

The company is now drilling with two rigs at Brook as part of a fall campaign that aims to complete 15 new holes before winter sets in. Ramaco wants to upgrade the quality of the deposit’s defined resource.

Toll milling

Ramaco expects to process its own rare earths and minerals at Brook and offer tolling services to third-party producers. The site is connected to the BNSF railroad and is adjacent to a major interstate highway.

A proposed REE processing facility at Brook would cost about $533.1 million to build, generating an unlevered pre-tax internal rate of return of 38% and a payback period of five years under the base case scenario, according to a preliminary economic assessment released in July. Scandium alone is expected to contribute 59% of the facility’s total revenue, the study said.

Teaming up with a commodity adviser “will anchor Ramaco’s downstream capital expenditures and financing on off-take contracts,” the company said. The partnership “also has the potential to generate stable, annuity-like cash flows and serve as a strategic national infrastructure asset,” it added.

In August, critical minerals company M2i Global (US-OTC: MTWO) and flight management software provider Volato Group (NYSE-A: SOAR) unveiled plans to create a strategic mineral reserve at Nevada’s Hawthorne Army Depot, the world’s largest ammunition storage site.

The companies plan to focus on storing, refining and distributing critical minerals such as gallium, graphite and copper, which are vital for the manufacturing of defence systems, semiconductors, batteries and electric vehicles. The Nevada Governor’s Office of Economic Development is backing the initiative.

Ramaco shares fell 8.2% to $32.07 in early afternoon US trading Monday. That gave the company a market value of about $1.9 billion.