Vital Metals to sell rare earths stockpile within Canada, not to China

Tom Taylor,
Local Journalism Initiative Reporter

Vital Metals won’t be selling its stockpile of Canadian-mined rare earth elements to China after all.

On June 16, the Australian-owned firm, which owns and operates a portion of the NWT’s Nechalacho rare earths mine, announced that it will be selling its existing stockpile to the Saskatchewan Research Council (SRC) for $3 million instead. SRC bills itself as Canada’s second largest research and technology organization, and aims to support innovation and industrial commercialization for its clients.

The new deal was facilitated by Natural Resources Canada, a branch of the federal government, with the aim of keeping Canadian resources inside the country.

“This agreement highlights the strategic value and importance of the Nechalacho rare earths project, and the prioritization of a rare earths value chain in Canada,” said Vital Metals’ managing director and CEO Geordie Mark.

Last year, Vital Metals sold a 9.9-percent ownership stake to a subsidiary of Chinese rare earths company Shenghe Resources, which is owned in part by the Chinese state. In tandem with the deal, Australian-based Vital Metals planned to sell its existing rare earths stockpile to the Chinese firm. This approach sparked immediate concerns among stakeholders and other Canadians, as China already dominates the global rare earths market, and looked to be gaining even more influence through the transaction. The deal also ran counter to Vital Metals’ previous claim that it aimed to become “the lowest cost producer of mixed rare earth oxide outside of China.”

Evidently, the federal government shared those concerns, having blocked the sale of the stockpiled resources and found a new buyer within Canada.

“I’m very happy that our federal government facilitated the deal, as it reinforces their commitment — through Natural Resources Canada, and with all departments — to advance a strong critical mineral supply chain in the country and Western world, and outside of China,” said Tom Hoefer, senior advisor to the NWT Chamber of Mines. “I’d say many people are probably happy for the Canadian government to have intervened in Vital’s plans to sell its stockpile to China.

“It also keeps the rare earth elements here in Canada, which fits Canada’s commitment to create a domestic critical minerals supply chain under the national Critical Minerals Strategy.”

Shenghe was expected to pay $2.6 million for Vital’s rare earths stockpile, meaning the Australian firm will actually make slightly more money by selling within Canada.

That, according to Mark, will help the company “advance [Nechalacho’s] Tardiff rare earths deposit as a long-life, large scale project with a scoping study to examine potential size and scalability.”

Late last year, Hoefer expressed optimism about the potential value of the Tardiff deposit, calling it “a prize.” He stands by that assessment halfway through 2024.

“SRC paid virtually the same — actually a wee bit more — to Vital, which also provides Vital with some additional funds to continue developing Nechalacho, which I believe will eventually be a good project for the country,” he said. “They have a ways to go still in developing it.

“I continue to be optimistic about the potential of the Tardiff deposit. Vital has a good team doing the necessary and proper work to assess its geology and as they announced, to produce a scoping study in this calendar year. That will be the first pass at looking at the information gathered to see how it might be mined.”

Until last year, Vital had plans to develop a rare earths processing plant in Saskatoon. However, the company ultimately terminated that strategy after spending nearly $200 million on the facility’s construction.

SRC, coincidentally, is working on its own rare earths processing facility in the province, which is “set to be operational by the end of 2024,” according to its latest update.

With Vital’s stockpile in its possession, SRC will be able hit the ground running when the facility opens.

“The Government of Saskatchewan and SRC announced their plans to develop a rare earth processing facility — the first of its kind in Canada — laying the foundation for a rare earth element supply chain in Saskatchewan and forming an industry model for future commercial rare earth element resource expansion in the province,” said Hoefer. “Acquiring Canadian rare earth element concentrate from Nechalacho is consistent with that plan.”

Tom Taylor,
Local Journalism Initiative Reporter
NWT News/North

Sign In

Register

Reset Password

Please enter your username or email address, you will receive a link to create a new password via email.