Ionic Rare Earths' Feasibility Study Highlights Profitable Magnet Recycling in Belfast
IXR (IXR) Share Update November 2024 Sunday 17th
Ionic Rare Earths Unveils Profitable Magnet Recycling Feasibility Study in the UK
Ionic Rare Earths Limited (ASX: IXR) has released a feasibility study demonstrating the potential for a profitable magnet recycling facility in Belfast, UK. The study outlines strong financial returns and environmental benefits, positioning the company as a leader in the rare earth supply chain.
Instant Summary:
- Feasibility Study shows a post-tax NPV of US$502 million.
- Projected post-tax IRR of 43.6%.
- Estimated net revenue of US$2.12 billion over 20 years.
- Capital payback period of 2.4 years.
- Facility to recycle 1,200 tonnes of feed annually, producing 400 tonnes of REO.
Feasibility Study Overview
The feasibility study conducted by Ionic Rare Earths Limited reveals the promising potential of a rare earth oxide (REO) manufacturing facility in Belfast, UK. This facility will focus on recycling pre-consumer rare earth magnet scrap and end-of-life magnets. The study shows a post-tax net present value (NPV) of US$502 million and an internal rate of return (IRR) of 43.6%, indicating strong financial viability.
The projected net revenue over the 20-year operational life is estimated at US$2.12 billion, with an EBITDA of US$1.78 billion. The capital payback period is expected to be just 2.4 years, based on a throughput of 1,200 tonnes per annum, with a production capacity of 400 tonnes of separated magnet REOs annually.
Strategic Importance and Environmental Impact
This project positions Ionic Technologies, a subsidiary of Ionic Rare Earths, as a first mover in establishing a sustainable, traceable, and sovereign supply chain for rare earths in the UK and Europe. The facility is designed to meet the growing demand for rare earth elements, crucial for the net-zero transition, advanced manufacturing, and defense sectors.
Ionic Technologies plans to apply for a significant capital grant from the UK Government through the Automotive Transformation Fund, which supports automotive manufacturing and the rare earth supply chain. This grant aims to enhance the UK's sovereign capability in magnet REO production.
The announcement of the feasibility study is likely to have a positive impact on Ionic Rare Earths' stock, as it demonstrates the company's strategic positioning in the rare earth supply chain. The facility's potential for strong financial returns and environmental sustainability could attract significant investor interest, particularly given the geopolitical importance of rare earths.
Investor Reaction:
Analysts may view this development favorably, considering the strategic importance of rare earths and the facility's potential to contribute to the UK's net-zero goals. The backing from the UK Government could further boost investor confidence in Ionic Rare Earths' long-term prospects.
Conclusion:
Investors should consider the potential growth opportunities presented by Ionic Rare Earths' Belfast facility. The company's focus on sustainable magnet recycling aligns with global trends towards environmental responsibility and supply chain resilience. As Ionic Rare Earths progresses with site permitting and construction, investors may find value in monitoring this development closely.