Pilot rare earths processing plant, first one outside China, opens in Colorado

The Round Top project is located in Hudspeth County, Texas, approximately 85 miles (137 km) southeast of El Paso. (Image courtesy of Texas Minerals Resources.)

USA Rare Earth and partner Texas Mineral Resources have opened a pilot plant processing facility in Wheat Ridge, Colorado, which will purify rare earths, lithium and other critical minerals with the aim of helping Washington secure domestic supply of the key ingredients for military weapons, electric vehicles and phones.

Processing ore will come from the Round Top heavy rare earth and critical minerals project, located just outside El Paso, Texas, the companies said. Aside from the significant concentration of heavy rare earths (HREE’s) and lithium, the deposit also includes uranium, beryllium, gallium, hafnium and zirconium – all of which are on the US Government’s critical minerals list. 

“Our Colorado pilot plant will be the first processing facility outside of China with the ability to separate the full range of rare earths – Lights, Mids and Heavies,” Pini Althaus, chief executive of USA Rare Earth, said.

News comes as China, which refines most of the world’s rare earths, has threatened to stop exporting them to the US, as part of the ongoing trade war between the countries.

“Taken together, Round Top and our pilot plant constitute essential links in restoring a domestic US rare earth supply chain, extracting rare earths and processing them into individual REE oxides – without the material ever leaving the US”, Althaus noted. 

The partners, which estimate an investment of $10 million to $12 million building the final plant, expect to be producing small amounts of processed rare earths by the middle of 2020 — roughly 100 kilograms (220 pounds) annually

The companies plan to move the pilot plant to Texas by 2021 and have full-scale production by 2023.

The news comes as the US Army is said to be ready to fund construction of rare earths processing facilities. It would be its first financial investment into commercial-scale rare earths production since World War Two’s Manhattan Project, which built the first atomic bomb.

The Colorado plant and a joint venture between Australia’s Lynas Corp (ASX: LYC) and privately-held Blue Line Corp are among the company likely to receive financial support from the Army, a division of the Pentagon.

In the past three months, The Trump administration has stepped up efforts to ensure the supply of critical minerals from outside China. As part of those initiatives, it recently signed a memorandum of understanding with Greenland to conduct a hyper-spectral survey to map the country’s geology.

Washington has also gained the support of Australia, which has committed to facilitate potential joint ventures to improve rare earth processing capacity and reduce reliance on Chinese rare earths, which account for 70% of global production. The mineral agencies of the both countries signed last month a research agreement to quantify their reserves of critical mineral reserves.

Last year, China produced about 120,000 tonnes of rare earths, while the totals of the next two leading producers — Australia and the US — were 20,000 and 15,000 respectively.

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