Shares in Ionic Rare Earths Ltd (ASX:IXR, OTC:IXRRF) were up as high as 6.25% today as the company reported that its magnet recycling feasibility study is now close to completion.
The company is now close to realising a low-cost operation that contributes to a sustainable, traceable and sovereign high-margin heavy rare earth oxide (HREO) supply chain for the western market.
First in the West
IonicRE is set to become the first major producer in the western world of recycled separated magnet rare earth oxides (REOs), creating an ex-China supply amid rising demand from the world’s clean energy transition, with a first-mover advantage.
The company reasons that the recent uptick in rare earth prices and Chinese closures of uneconomical critical minerals mines sees market sentiment at a turning point as the industry rebalances.
IonicRE is focused on its wholly owned subsidiary Ionic Technologies’ Magnet Recycling Demonstration Plant in Belfast, UK.
In response to market conditions, the company has implemented cost-cutting measures to reduce operational expenses by up to 60% per month, extending its financial runway.
Additionally, the company has received R&D Tax Incentive rebates of $1.2 million, with an additional half a million pending.
The Belfast-based recycling plant will process 1,200 tonnes of magnet feed material annually, yielding some 400 tonnes of separated REOs.
The feasibility study projects processing costs of US$25-30 per kilogram of REO, with potential selling prices for neodymium-praseodymium oxide at US$80-100 per kilo, dysprosium oxide at US$500-600 per kilo, and terbium oxide at US$1,200-1,500 per kilo by 2030.
Engagement with stakeholders
IonicRE has picked out a site for a commercial-scale plant in Belfast Harbour, and planning permission and environmental permitting processes are well advanced.
The company has also signed a memorandum of understanding with UK-based Less Common Metals, expanding recycling opportunities in the UK and USA.
IXR managing director Tim Harrison said: “The feasibility study is an important tool in IonicRE’s engagement with the UK Government and other stakeholders, with its completion set to pave the way for offtake contracts, construction funding and an FID for the commercial plant.
“Pending the successful advancement of the FID, IonicRE anticipates commercial-scale production as early as 2026, with capex likely to be relatively low for a plant of this scale.
“The Belfast plant will serve as a blueprint as IonicRE expands its recycling business to other sites globally, including for the Viridis JV in Brazil and other potential licensing and joint venture opportunities in Europe and North America.”
Executive chair Brett Lynch said: “This focus on the magnet recycling technology offers the best pathway to shareholder returns, as IonicRE ‘pioneers profit’ in this sector by unlocking a new supply chain with customers in the West seeking an alternative, secure and traceable supply.
Cost performance on recycling, sustainability
“The West consumes some 50% of the world’s magnets, yet only produces 1%, demonstrating the availability of used magnets in the West which IXR can potentially access. This eliminates the need for these magnets to be disposed of unsustainably or alternatively recycled in China.
“The feasibility study is showing exceptional cost performance on recycling, with a relatively low capex and profitable operation to be developed that can sell to customers where the focus is on supply security.
“These customers are willing to support development of such a supply chain and pay a premium for this product, allowing Ionic to circumvent current industry dynamics dominated by China.
“This affords IonicRE a tremendous opportunity to seize industry leadership as we de-risk our company through de-mining.”