Ionic Rare Earths Ltd (ASX:IXR, OTC:IXRRF) has received validation of its plans to build a magnet rare earth recycling facility in the Minas Gerais region of Brazil through its Viridion joint venture (JV) from Brazilian investment promotion agency Invest Minas.
IXR proposes to leverage its proprietary magnet rare earth recycling technology already being demonstrated in Belfast, Northern Ireland, to build a sustainable, traceable and sovereign circular rare earth supply chain in Brazil alongside JV partner Viridis Mining and Minerals Ltd (ASX:VMM).
“IonicRE is building a global industrial business and Brazil is an important piece of this puzzle, being a major advanced manufacturer at the heart of the South American economy,” Ionic Rare Earths executive chair Brett Lynch said.
“Having shown the strong financial returns and environmental sustainability of our Belfast model, we look forward to replicating this across new markets in North and South America, Asia and elsewhere to unlock increased value for shareholders in creating a secure and sustainable ex-China rare earths supply chain.”
Read: Ionic Rare Earths lodges UK Government grant application for commercial magnet REO recycling facility
Strong government support
IXR believes its proposed magnet rare earth oxide (REO) recycling facility in Brazil has the potential to offer strong financial returns and environmental sustainability, based on a feasibility study completed on the Ionic Technologies’ Belfast facility.
Read: Ionic Rare Earths Belfast recycling facility feasibility study points to supply chain, green energy wins
“Minas Gerais is constantly reinventing itself to remain at the forefront of the innovations that the world demands,” Invest Minas director of Investment Attraction Ronaldo Barquette said at a meeting in Belo Horizonte last week.
“A notable example is the rare earth magnet recycling project, made possible through a partnership between the State Government, institutions such as FIEMG, universities and private companies such as Ionic Rare Earths, Viridis, among others.
“The Government remains committed to ensuring that these companies find the ideal environment in Minas Gerais to establish themselves and expand, making the most of our highly qualified workforce and our natural resources.
“Our commitment is to ensure the greatest possible generation of income and jobs for the State.”
The company intends to develop an REO manufacturing facility that will recycle pre-consumer rare earth magnet scrap and end-of-life magnets into useful and valuable materials.
Clear profit potential
The Viridion JV recently signed a five-year memorandum of understanding (MoU) with SENAI FIEMG Innovation and Technology Centre, owner of Lab Fab, South America’s first rare earth magnet laboratory, to jointly develop and produce rare earth magnets at Lab Fab.
Read: Ionic Rare Earths JV inks MoU with owner of first rare earth magnet lab in South America
“IonicRE has received strong support from Minas Gerais as the most logical and feasible alternative for building a domestic rare earths supply chain independent of China,” Ionic Rare Earths business development manager LATAM Gabriel Longo dos Santos said.
“Meeting participants were particularly impressed by the data from the recent feasibility study for Ionic Technologies, especially its positive EBITDA (earnings before interest, taxes, depreciation, and amortisation), which showed a clear measurement of the potential profitability of such a plant in Brazil.
“Overall, the reception was excellent, with the Minas Gerais authorities seeing IonicRE as providing an essential solution for the state’s critical minerals industry.”
Brazil the ideal market
Viridion holds exclusive rights in Brazil to monetise, implement and commercialise Ionic Technologies’ magnet recycling intellectual property.
The company is discussing the location of pilot plants for a potential REO refinery and magnet recycling facilities with the Minas Gerais authorities, with an eye to sites near existing Viridis Colossus Project operations in Minas Gerais.
IXR believes Brazil can offer substantially lower operating costs in converting alloy feedstock to REO product in Brazil compared to other markets.
“Brazil has enormous potential as a new market for our patented magnet recycling technology, with magnet recycling likely the first step in developing a domestic integrated supply chain,” IXR managing director Tim Harrison said.
“The production of magnet REOs within Brazil will enable the ramp-up of magnet production capability at CIT SENAI’s LabFab facility, which is targeting a ramp-up in neodymium-iron-boron (NdFeB) production to 100 tonnes per annum by the end of 2026.”
Harrison said the company also planned to recycle waste streams produced in the ramp-up of operations, enabling the development of an insulated and secured NdFeB supply chain in Brazil that could support “significant advanced manufacturing activities”.
“Brazil represents a very exciting opportunity for the company,” Harrison continued.
“The South American giant is currently the world’s seventh largest wind energy market, growing at 29% compounding annual growth rate (CAGR) over the past decade, and will be a wind energy powerhouse into the future.
“Additionally, the establishment of EV production capacity in Brazil along with existing and growing advanced manufacturing capacity will drive further demand for REO’s in what is presently the world’s 10th largest economy.
“IonicRE and Viridion are delighted by the strong support from Invest Minas and look forward to replicating our Belfast model in Brazil, working closely with our partners to fast-track its development and deliver on Brazil’s vision of an integrated REE supply chain.”