Ionic secures British rare earth tech, has 90 days to crack brave new world of magnetic growth
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Ionic has signed a binding term sheet with rare earths separation and magnet recycling technology company Seren Technologies as it looks to open up new links in the REE value chain.
The UK-based private company has developed a REE (rare earth element) separation and refining technology using ionic liquids as well as tech that can extract individual magnetic REEs such as neodymium and dysprosium from existing permanent magnets.
Importantly, the acquisition of SerenTech will provide Ionic Rare Earths (ASX:IXR) with established capability, unique technology and application potential.
It also provides the company with the potential to produce REEs from magnet and swarf recycling, which is forecast to provide a growing portion of the REE supply chain in the future.
This is expected to deliver synergies with its planned downstream rare earth refinery.
Managing director Tim Harrison said the acquisition is another step in the company’s transition towards becoming a vertically integrated rare earths company.
“The addition of SerenTech to the group will provide the Company with additional capability for rare earth separation, to individual rare earth elements refined to high purity oxides, which will further advance the company’s plan to unlock additional value from the unique critical and heavy rare earth basket to be produced at Makuutu,” he explained.
“Importantly, there is immediate potential to roll out a strategy incorporating permanent magnet recycling into the near-term activities of the company, providing an interim step to help bridge the gap between production at Makuutu and going downstream with our own dedicated separation and refining asset.”
Harrison added that the synergies created from this acquisition and technology would have substantial upside with the company looking to integrate new, secure and traceable rare earth production to supply western end users at a time when significant shortfalls are forecast.
“The recycling of NdFeB magnets, used in electric motors, wind turbine generators and consumer electronics, is likely to become increasingly important as the lag on project development, capital investment and ramping up of capital intensive hard rock rare earth projects becomes evident, and where some estimates forecast up to 25% of the magnet rare earth supply could be from recycling by the end of this decade.”
SerenTech has an exclusive “patent and know-how” licence from Queens University Belfast allowing it to develop and commercialise technology relating to Multifunctional Amide Ionic Liquids for Separation of Rare Earth metals (MAIL).
This ionic technology has several advantages compared to existing or alternative options for processing rare earths.
It has also developed further know-how in this area and lodged a further four global patents that provide it with a pipeline of opportunities in which to deploy the technology.
This technology will allow the company to separate and refine rare earth elements – including the full basket of REEs from Makuutu – to a purity of more than 99.99% rare earth oxide grades for modest capital requirements.
This has been demonstrated at the pilot scale in the processing of mined ore concentrate and processing spent permanent magnets.
Highlighting the potential of this development, Shanghai Metals Market recently forecast that recycling of NdFeB scrap is likely to be the largest growth of NdPr supply from 2021 to 2025.
Under the terms sheet, Ionic Rare Earths has paid a non-refundable US$150,000 option fee for a 90-day due diligence period to investigate SerenTech and its technology.
On a decision to exercise the option, it will pay the vendors US$1m in cash and 48 million IXR shares valued at US$1.5m.
The company will also pay the vendors a Milestone fee on commercialising the technology, to a maximum of US$1.5m in total. Milestones include 25% of any licence fee it receives from a third party to use the technology for magnet recycling or rare earth separation technology up to a maximum of US$1.5m (Milestone 1), and will pay the outstanding portion, up to the maximum on reaching commercial production for a magnet recycling plant or rare earth separation and refining plant (Milestone 2).
This article was developed in collaboration with Ionic Rare Earths, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.