Medallion receives US Department of Defense inquiries for REE
Vancouver-based Medallion Resources (TSXV: MDL), which is pursuing North American production of rare earth magnet metals, has received inquiries from several rare earth element (REE) refineries interested in receiving specifications and potential volumes of the company’s REE concentrate product.
These refineries are considering their response to the US Department of Defense’s recent Funding Opportunity Announcement (FOA), directed toward light REE processing and separation, the company said.
Medallion’s proposed US-based REE process plant is designed to provide feedstock for separation by either existing or future refining facilities. The plant will use monazite sand, an REE-rich byproduct mineral that is abundantly available within the US. The company’s proprietary process extracts a REE chemical concentrate from high-grade monazite sand in a clean, safe and automated operation without the need for mining or upgrading.
The FOA is seeking proposals to establish or enhance domestic light REE processing and separation capacity under the Defense Production Act (DPA). The estimated government funding contribution for this project is up to $40 million for accepted proposals and requires matching funding.
Medallion’s product, a light rare earth concentrate enriched in the magnetic metals neodymium (Nd) and praseodymium (Pr), is in short supply outside China. In fact, Beijing prohibits its export to ensure value-add stages are completed within China.
About the Defense Production Act
Over the last few years, under direction from Beijing, six state-owned enterprises have consolidated the bulk of the Chinese domestic rare earth mining and processing capacity and now dominate that marketplace. China currently controls about 85% of global rare earth production.
The Trump administration has expressed strong support for the US military to become less reliant on foreign-sourced materials and processing technology. A key area of concern has been the high concentration of supply of rare earth products from China, and the lack of a robust US supply alternative in the short to medium term.
In July 2019, The White House issued presidential determinations under Section 303 of the Defense Production Act of 1950 – Title III, that “domestic processing, separation, production of REEs is now essential to the national defense.” This permitted the federal government to incentivize the domestic (US and Canada) rare earth industrial base accordingly, which includes this current Light REE FOA.
Earlier, shares of Medallion jumped more than 10% to a six-month high of C$0.13 on the news. The company’s market capitalization is C$4.9 million.