Plans by Ionic Rare Earths Ltd (ASX:IXR, OTC:IXRRF) to fast-track the development of a commercial-scale rare earth oxide (REO) manufacturing facility in Belfast, UK, could receive a boost with the company applying for a significant capital grant from the UK Government.
The potential cornerstone capital grant could provide the UK with sovereign magnet REO capability for the first time, following the Belfast demonstration plant’s success in becoming the first producer of recycled magnet REOs in the Western world, based on technology developed at Queen’s University Belfast.
IonicRE managing director Tim Harrison said the grant application was another major milestone in the development of a world-scale commercial REO facility in Belfast Harbour.
Strong backing
“The UK Government has consistently shown strong backing for Ionic Technologies and its patented, leading-edge magnet recycling, having provided various grants to support the development of this made-in-Belfast innovation,” Harrison said.
“This technology is vital in establishing a sustainable, sovereign and traceable UK supply chain that supports the net-zero transition, advanced manufacturing and defence, while fostering a new renewable industry for Northern Ireland.“
The grant application was submitted via the Automotive Transformation Fund (ATF), administered by the Advanced Propulsion Centre (APC), for automotive manufacturing and supply chains.
The APC is dedicated to supporting the UK’s global leadership position in scientific research, automotive engineering and net zero.
Advanced Propulsion Centre CEO Ian Constance and project delivery lead Matthew Pardington tour the Ionic Technologies Demonstration Facility in Belfast.
Potential for profitable business
The grant application follows IonicRE’s release of a successful feasibility study which showed strong potential for a profitable commercial REO manufacturing facility in Belfast that would recycle pre-consumer rare earth magnet scrap and end-of-life magnets.
The study outlined positive financial outcomes, including an NPV (post-tax) of US$502 million, an IRR (post-tax) of 43.6% and capital payback within 2.4 years.
This was based on throughput of 1,200 tonnes per annum (tpa) of feed with production capacity of 400 tpa of separated magnet REOs over a 20-year life of operation.
The study also demonstrated that the industrial business model is scalable to other markets including Europe, USA, Brazil and Asia.
Harrison said, “Having shown with our recent feasibility study the positive economics of a commercial REO business, IonicRE looks forward to driving its development even faster with vital financial support from the UK Government which aligns with its vision of creating a circular economy for critical raw materials.”
Additional funding
With the feasibility study estimating capex for a commercial facility in Belfast Harbour totalling US$108.7 million, including contingencies, the company is also exploring additional government-backed financing.
The financing targets projects that have the potential to facilitate the UK’s energy transition and drive regional growth, supporting investment in Northern Ireland.
IonicRE anticipates such potential additional UK Government funding could add to funding from strategic investors and debt financiers, securing the total investment necessary to progress towards a final investment decision in the first half of calendar 2025.
This combination has the potential to significantly reduce the equity component required to finance the commercial facility.
Ionic Technologies has previously benefited from UK Government grant funding, with up to £5 million of funding and commitments received to date.
Focused on rapidly accelerating development
IonicRE executive chair Brett Lynch said: “IonicRE is focused on rapidly accelerating the development of our technology, creating an industrial business that is globally scaleable based on our patented magnet recycling technology.
“We have been delighted by the support shown by the UK Government thus far and are confident the UK will continue to back the Belfast plant. This is a genuine step change in creating a low capex, alternative magnet rare earth supply chain for Western end users across defence, energy transition and advanced manufacturing.
“We are now hyper-scaling this model globally, taking little steps but extremely quickly to deliver increased value for our shareholders and all stakeholders.”
Tim Harrison with Sarah Jones MP, Minister of State at the Department for Energy Security and Net Zero, and the Department for Business and Trade, at a meeting in London.