Ionic wins licence to mine rare earths in Uganda

Exploration at the Makuutu heavy rare earths project. (Image courtesy of Ionic Rare Earths.)

Australia’s Ionic Rare Earths (ASX: IXR) secured on Friday a large-scale mining licence for its the Makuutu heavy rare earths project in Uganda.

The permit was granted by the Ugandan Directorate of Geological Survey and Mines (DGSM) to Rwenzori Rare Metals, a company in which Ionic Rare Earths has a 51% interest but has the right to earn up to 60%, Ionic said. 

The rest of Makuutu is held by Rare Earth Elements Africa (REEA) with a 42% stake and local partners, which own the remaining 7% stake. 

Located about 40 km east of the regional centre of Jinja and 120 km east of the capital city Kampala, in eastern Uganda, the Makuutu project comprises six licences. The asset hosts heavy rare earth oxides (HREO), which are easily extracted by applying rudimentary mining and processing methods.

Stage one of the mining licence covers an area that constitutes 44km² of Makuutu’s tenements covering 298km² of land.

Ionic also released a positive feasibility study earlier this year and has received approval to build a demonstration plant at the project.

“This announcement reinforces the Makuutu project as one of the world’s largest and most advanced development-ready heavy rare earth element assets, and we look forward to progressing the next steps and commissioning our Demonstration Plant at Makuutu,” managing director Tim Harrison said in the statement.

Ionic Technologies International, a 100% owned UK subsidiary acquired in 2022, has developed processes for the separation and recovery of rare earths from mining ore concentrates and recycled permanent magnets. The unit is focusing on the commercialization of the technology, the miner said.

Ionic Rare Earths expects the mine to run for a minimum of 35 years, producing a 71% rich magnet and heavy rare earth carbonate (MREC) product basket, but said the asset presents significant potential and scale up through additional tenements. 

Shares in the company jumped more than 18% on the news, closing at A$0.026 and leaving it with a market capitalization of A$ 113.14 million ($72m).