Ionic Rare Earths Pursues UK Government Funding for Belfast REO Plant
IXR (IXR) Share Update December 2024 Wednesday 4th
Ionic Rare Earths Seeks UK Grant for Belfast REO Recycling Plant
Ionic Rare Earths Limited has applied for a substantial UK Government grant to fast-track the development of a commercial-scale Rare Earth Oxide (REO) recycling facility in Belfast, aiming to boost the UK's sovereign magnet REO capabilities.
Instant Summary:
- Ionic Technologies applies for UK Government grant through the Automotive Transformation Fund.
- The Belfast plant aims to be the first in the Western world to produce recycled magnet REOs.
- Feasibility Study shows a post-tax NPV of US$502 million and IRR of 43.6%.
- Potential for significant economic and regional growth in Northern Ireland.
- Plans for a 40-fold increase in production capacity from the demonstration plant.
Project Overview
Ionic Rare Earths Limited, through its subsidiary Ionic Technologies, has submitted an application for a significant capital grant from the UK Government’s Automotive Transformation Fund. This funding is crucial for the development of a commercial-scale Rare Earth Oxide (REO) recycling facility in Belfast, UK.
The proposed facility aims to establish the UK’s first sovereign magnet REO production capability, leveraging technology developed at Queen’s University Belfast. This initiative aligns with the UK’s goals of advancing its net-zero transition and strengthening regional manufacturing capabilities.
Feasibility and Economic Potential
The application follows a successful Feasibility Study, which demonstrated strong potential for a profitable REO recycling business. The study revealed a post-tax Net Present Value (NPV) of US$502 million and an Internal Rate of Return (IRR) of 43.6%, with capital payback expected within 2.4 years.
The facility is designed to process 1,200 tonnes per annum of feed, producing 400 tonnes per annum of separated magnet REOs over a 20-year operational lifespan. This scale-up from the demonstration plant represents a 40-fold increase in production capacity.
Strategic Importance and Partnerships
The Belfast plant is a strategic move to secure a sustainable and traceable supply chain for rare earth elements (REEs) in the UK. Ionic Technologies has already established partnerships with UK-based Less Common Metals and Germany-based Vacuumschmelze, focusing on producing magnets with 100% recycled REEs.
Additionally, Ionic Technologies is collaborating with Ford UK to support the production of over 420,000 e-drives annually, further integrating the recycled REOs into the automotive supply chain.
The successful acquisition of UK Government funding could significantly bolster Ionic Rare Earths' market position, providing a competitive edge in the REO recycling industry. This initiative could enhance the company's stock value by demonstrating commitment to sustainable practices and regional economic development.
Investor Reaction:
Analysts are likely to view this development positively, given the strong financial indicators from the Feasibility Study and the strategic importance of establishing a UK-based REO supply chain. However, the final impact will depend on the successful acquisition of the grant and subsequent project execution.
Conclusion:
Investors should closely monitor the progress of the grant application and subsequent developments in the Belfast project. The potential for significant returns and regional economic impact makes this an important initiative for both Ionic Rare Earths and the broader market.