June 09, 2023 -- InvestorsHub NewsWire -- Via NetworkNewsWire
Editorial Coverage: The global outcry for ditching fossil
fuels in favor of cleaner, Earth-friendly technologies and
sustainability is reaching deafening levels. One problem is that
North America has backed itself into a corner by allowing China to
take a dominant position in the supply of rare earth oxides. These
elements are irreplaceable in the production of permanent magnets,
which are, in turn, irreplaceable in products key to the green
energy transition, such as windmills and electric vehicles. The
United States and Canada have both been vocal about their desire to
end their reliance upon the East and aggressively establish
domestic supply chains of the critical rare earth elements
("REEs"), which hold the key to climate-change and sustainability
goals. Further, the concentration of supply coming from China means
that political tensions, trade disputes or other geopolitical
issues are constantly looming, posing threats to supply chains and
sustainability objectives. A domestic supply chain averts those
risks, while also providing cost stability and supply resilience,
stimulating job creation and economic growth, and even protecting
national security. Only a handful of leaders are spearheading
innovation to catalyze these national initiatives,
and Ucore Rare Metals Inc. (TSX.V: UCU) (OTCQX: UURAF) (Profile) with its transformative
technology, RapidSX(TM), is one of them. While Ucore is a standout
from an upstream view, other companies, such
as Tesla
Inc. (NASDAQ: TSLA), General
Electric Company (NYSE: GE), General
Motors Company (NYSE: GM) and Ford
Motor Company (NYSE: F) are downstream companies
well positioned to capitalize on all the benefits of a domestic
supply chain and which are equally committed to national security
and global sustainability.
- As part of China's pledge to
reach carbon neutrality before 2060, the country may announce bans
on exports of rare earth technology
- The U.S. DoD recently awarded
a $4 million contract to Ucore to explore its innovations
- Ucore may receive additional
DoD funding after the successful completion of the initial
contract
- The innovative company is
commissioning a demonstration facility and designing a
commercial-scale facility in Louisiana
Click here to view the custom infographic of
the Ucore Rare Metals
Inc. editorial.
Supply Crunch Looming
There are plenty of reasons for the United States to voluntarily
sever ties that have allowed China to develop a monopoly on REE
supply. However, there is the potential that China will force North
America's hand anyway. In Q3 2020, Chinese President Xi Jinping
stated that his country intends to see a peak in carbon
dioxide emission in the next decade on its path to reach carbon
neutrality, a balance between carbon emissions and carbon
absorption, before 2060. China, the world's biggest emitter of
carbon emissions and a land of 1.46 billion people, committing to
such a goal could mean it needs to appropriate all minerals and
technology for itself as demand is booming.
Beijing has not been shy about saying it is deliberating over
the idea of restricting or even banning the export of all things
REE. This comes at a time when, according to Markets and
Markets, the rare earth minerals market is expected to
experience 12.3% compound annual growth to reach $9.6 billion by
2026. When President Joe Biden took office in 2020, one of his
first executive moves was to join the group of countries pledging
to the Paris Agreement, a binding international treaty on climate
change, obliging the country to reach net zero emissions by
2050.
The Biden administration wants a legacy as stewards abating
global warming, as evidenced by the allocation of billions of
dollars to establish national infrastructure for clean energy and
technology as part of the $369 billion Inflation Reduction Act.
Markets and Markets' forecast arguably could be low if the
International Energy Agency is correct in saying the electric
vehicle sales will need to account for about 60% or total vehicle
sales in 2030 if a trajectory to net zero by 2050 will be
established. With these considerations, some light is shed on why
regulators and companies alike are moving with a purpose to secure
rare earth oxides.
Ucore Rare Metals Inc. (TSX.V: UCU) (OTCQX: UURAF) isn't a newcomer to
the space; it has been an instrumental part of the rare earth
market for more than 15 years, developing technology to disrupt the
legacy status quo. With a supply crunch in the balance, Ucore and
its proprietary tech is well positioned to offer a solution for
establishing an independent supply chain of REEs for North American
manufacturers. The company has taken a savvy approach,
differentiating itself from others in the metals market by focusing
on processing materials, a business model that entails higher
margins while avoiding risks associated with large CAPEX
requirements.
A watershed moment is imminent for Ucore. The company is
commissioning a commercial demonstration plant in Kingston,
Ontario, to showcase RapidSX(TM), its exclusive metals separation
technology that is highly differentiated from anything today and
superior in several ways to Chinese technology currently feeding
the entire market. The demonstration plant is the beginning of a
longer-term strategy that includes constructing a scaled-up plant
to supply REE material for customers throughout North America.
Ucore is working with companies outside of China that can supply
rare earth mixed concentrates, in addition to collaborating with
original equipment auto manufacturers that need product for
next-generation vehicles.
Even more promising, the U.S. government has discovered RapidSX
("SX" is short for "solvent extraction") and wants a closer look at
what Ucore might be able to do to help the nation meet
sustainability goals.
DoD Ponies Up $4 Million for a Closer Look
On June 6, 2023, Ucore announced that the U.S. Army Contracting Command
– Orlando, part of the U.S. Department of Defense ("DoD"), awarded
the company a $4 million contact. Working with the DoD represents a
tremendous opportunity. First, the DoD has one of the largest
budgets of any U.S. government agency, and its contracts often span
multiple years, providing a reliable, long-term income stream.
Second, working with the DoD can often lead to a company becoming a
preferred vendor or supplier. This opens the door to further
contracts and can enhance a company's reputation in the
marketplace. Third, contracts with the DoD can spur innovation.
Many technologies that originated in defense contracts have later
found commercial applications, opening new markets and
opportunities.
The purpose of the recent contract is to assist the government
in understanding Ucore's RapidSX technology and how it could be
useful in creating domestic rare earth processing plants to deliver
a sustainable, high-grade source of the critical minerals in the
near term. The contract is evidence of the government's motivation
to support innovation in a bid to shift away from Chinese goods
while synchronously supporting the U.S. economy.
Equally intriguing for future potential, the contract stipulates
that upon successful completion of the initial project, a follow-on
production award could be awarded to Ucore in order to further
support Ucore's REE separation capabilities in North America.
To meet the number of technical requirements for the initial
project, Ucore will employ its demonstration plant in Canada. The
cash influx will allow the plant to operate for extended periods of
nearly continuous operation, allowing the company to prove its rare
earth separation processing capacity is more efficient than
conventional solvent extraction as well as increase RapidSX
technology's readiness level, among other things.
Ucore chair and CEO Pat Ryan believes RapidSX is one of the
West's most compelling rare-earth-supply chain business models.
"This U.S.-DoD project will allow us to demonstrate the RapidSX
technology platform for rare earth element separation and will
include original equipment manufacturers' qualification trials in
coordination with our commercial development activities at the
company's planned Louisiana SMC (strategic metal complex)," said
Ryan. "The rare earth element processing opportunity afforded Ucore
through this award is pivotal as the company continues to seek out
and collaborate with like-minded upstream and downstream partners
as part of a Western rare-earth-element supply chain solution."
RapidSX Is Simply Better
Ucore now has a golden opportunity to show the DoD that RapidSX
is a potential game changer, a paradigm shift away from China's
traditional metal separation tech. With the attention of arguably
one of the most influential organizations in the world, Ucore will
showcase not only the efficiency of RapidSX but also that the same
equipment can separate both heavy and light rare earths, an
industry first.
The importance of this takes a little understanding of what REEs
are and the difference between heavy and light types. REEs are a
group of 17 metallic elements on the periodic table, which include
the 15 lanthanides (elements 57 through 71) as well as scandium and
yttrium. The elements are typically divided into two categories,
light and heavy, based on their atomic number and specific gravity.
Light REEs include elements from lanthanum to europium on the
periodic table and are used in products such as batteries,
smartphones and fluorescent lamps. Heavy REEs, which include
elements from gadolinium to lutetium, plus yttrium, are used in
high-performance magnets, lasers, and certain defense and medical
applications.
Four of the REEs are critical inputs to rare earth permanent
magnets. These four elements must be separated from the others in
order for their unique properties to be captured. However,
effectively isolating these metals has proved uniquely challenging
for engineers and scientists owing to the similar chemical and
physical properties shared by all REEs. The minimal differences in
atomic radii and ionic charge among the REEs complicate the
separation process, a circle that Ucore has been able to
square.
RapidSX: A Multitude of Benefits
Efficiently separating light and heavy REEs using the same
equipment clearly differentiates RapidSX, but that is only one of
the benefits of the technology. Remember that a key driver of
demand for this process is concern for the environment. RapidSX is
also better for the planet than conventional extraction techniques
because it doesn't generate the high volumes of toxic waste that
other approaches do.
Moreover, the carbon footprint of RapidSX is much smaller than
other metal separation technologies. It also uses less power, and
100% of the solvents are recycled. In aggregate, these
technological advancements westernize a process that creates an
opportunity for Ucore to effect an environmentally safe and
economically robust business model.
If That Wasn't Enough
Scalability is a significant part of the advantages of RapidSX.
Ucore will demonstrate that its construction designs are capable of
processing large amounts of feedstock continuously. The
demonstration plant in Ontario will provide a captivating glimpse
of what is coming at the planned complex in Louisiana.
Processing at the SMC is targeted at 2,000 metric tons of rare
earth oxides by the end of 2024, with intentions to increase
processing to 5,000 metric tons within two years. Ucore management
believes that funding of the SMC will be aided by government
incentives in addition to off-take agreements from major
manufacturers looking to secure future supply.
All of this aligns with the final primary purpose of the $4
million DoD contract. Along with all the other benefits, Ucore will
provide the DoD with a techno-economic analysis of RapidSX versus
conventional solvent extraction.
Looking to Make a Difference
Ideally positioned for significant growth in a key space, Ucore
could be a key player in efforts to supply products essential to
North American independence. And Ucore is joined by others who are
looking to make a difference, whether that is in strengthening the
domestic supply chain or finding sustainability solutions.
Tesla Inc. (NASDAQ:
TSLA) believes that "the future is sustainable"
and is committed to building a world powered by solar energy,
running on batteries and transported by electric vehicles. Last
month, the company
broke ground on an in-house lithium refinery, located in
Texas. This refinery is critical to the company's mission to
accelerate the world's transition to sustainable energy and
represents Tesla's efforts to aggressively increase the supply of
battery-grade lithium hydroxide available in North America.
General Electric Company (NYSE:
GE) is committed to advancing the future of
energy. The company's energy expertise spans from renewable wind
energy to remission-reducing natural gas as well as physical and
digital solutions to modernize the grid that connects it all. The
company just announced that Grid Solutions, an integral part of
the GE Vernova portfolio of energy businesses,
was awarded a
contract to supply 380 kV T155 gas-insulated
substations ("GIS") for the world's largest utility-scale
hydrogen plant to be powered entirely by renewable energy. The mega
plant will be located in Oxagon, a planned smart city in
northwestern Saudi Arabia.
General Motors Company (NYSE:
GM) is focused on advancing an all-electric
future that is inclusive and accessible to all. At the heart of
this strategy is GM's Ultium battery platform, which will power
everything from mass-market to high-performance vehicles. Last week
the company announced
the second phase of its Ultium Cathode Active Material
("CAM") joint venture with POSCO Future M. The partnership is
designed to increase production capacity of CAM in North
America and integrate precursor materials production.
Currently, CAM processing is highly concentrated in Asia.
Ford
Motor Company (NYSE: F) is
working to build a better world, where every person is free to move
and pursue their dreams. As part of that mission, the
company announced the formation of the Virtual Power
Plant Partnership ("VP3") earlier this year. The
partnership is a coalition led by the Rocky Mountain Institute
("RMI") aimed to scale the market for virtual power plants to help
advance affordable, reliable electric sector decarbonization and
support grid resiliency. "Electric vehicles are introducing
entirely new opportunities for consumers and businesses alike,
creating a greater need for sustainable energy solutions to
responsibly power our connected lifestyles," said Bill Crider,
Ford's head of global charging and energy services.
For more information about Ucore Rare Metals, please
visit Ucore Rare
Metals.
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