The US Department of Energy (DOE) has exercised its option to award Energy Fuels Inc. (NYSE: UUUU) (TSX: EFR), working with a team from Penn State University, an additional $1.75 million to complete a feasibility study on the production of rare earth element (REE) products from natural coal-based resources, as well as from other materials such as REE-containing ores like the natural monazite ore that the company is currently processing at its White Mesa Mill in Utah.
This award follows the DOE providing Energy Fuels a $150,000 contract in 2020 for the successful completion of a conceptual design for the same initiative, resulting in a total award of $1.9 million to the company.
The feasibility study is intended to support a cost estimate for the production of individually separated rare earth oxides and rare earth metals and alloys from coal-based resources or other resources, including monazite, within the US, with a focus on REEs for the production of commodity and defense-related products.
Energy Fuels is already evaluating the potential to develop commercial REE separation, metals, alloys and other downstream REE capabilities at the White Mesa Mill or nearby, with the goal of fully integrating a commercial US REE supply chain in the coming years.
The company says the work on the DOE feasibility study is expected to complement these efforts and has the potential to accelerate the move into commercial production of separated REE oxides and other value-added REE products in the coming years.
“As we continue to ramp-up production of an intermediate rare earth product at the White Mesa Mill in Utah, we are moving forward with designing and developing the infrastructure needed to responsibly produce separated rare earth oxides and other products needed by the electric vehicle, renewable energy, defense and other domestic industries,” Energy Fuels CEO Mark Chalmers said in a press release.
“We believe we can design our infrastructure to process feeds produced in the DOE program as well as the monazite we are currently processing for the recovery of uranium and REE products. We believe these kinds of collaborative public-private partnerships will be a key to restoring US global leadership in the clean energy sector and re-establishing critical defense-related supply chains,” Chalmers added.
Energy Fuels is currently the leading uranium producer in the US, supplying U3O8 to the country’s major nuclear utilities. The company also produces vanadium from several projects and is in the process of ramping-up to commercial production of REE carbonate this year.
Shares of Energy Fuels jumped 5.0% by midday Friday following news of the DOE award. The company’s market capitalization stands at $813.7 million.