Ionic Rare Earths has timed the release of its Makuutu Stage 1 Definitive Feasibility Study with exquisite precision following as it does on the heels of the European Union introducing legislation to secure supplies of critical minerals.

The Makuutu Stage 1 DFS confirms the technical and financial viability of its Makuutu ionic adsorption clay rare earths project in Uganda for sustainable, long life supply of valuable magnet and heavy REEs.

This is clearly highlighted by the numbers with net present value and internal rate of return, both measures of a project’s profitability, estimated at $580m and 32.7% respectively.

Ionic Rare Earth’s (ASX:IXR) DFS also estimates that the Stage 1 development at Makuutu will deliver earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $2.29bn and post-tax free cash flow of about $1.46bn over its 35-year mine life.

Makuutu will produce a 40,900t of value-added product – consisting of mixed rare earth carbonate and scandium – per annum through a modular heap desorption processing plant with a 5Mtpa capacity.

Capital expenditure has been estimated at a very palatable US$120.8m ($180m).

As part of the DFS release, the company has also defined a maiden Ore Reserve of 172.9Mt grading 848 parts per million (ppm) total rare earth oxides (TREO).

The study will also form the basis of the company’s Mining Licence Application, which covers the central tenement of the greater Makuutu resource area.

“These Stage 1 results support what we think is a unique, geopolitically strategic asset to supply magnet and heavy rare earths into Western supply chains,” managing director Tim Harrison noted.

“Evidence currently shows that countries are motivated to secure sustainable, traceable supplies of these critical raw materials to support their domestic manufacturing ambitions and to support both the energy transition, and increasingly, military and defence requirements to provide sovereign capability and global security.

“Furthermore, this Stage 1 study provides a path to production at Makuutu, which has the potential for significant growth into the future through the conversion of the other tenements at Makuutu towards additional MLAs over the coming decade.”

Harrison added that the company is now working towards a final investment decision as well as the construction of a demonstration plant that will seek to improve capital efficiency by increasing production capacity, improved extractions and minimising the dissolution of impurities.

Makuutu Stage 1

The Makuutu Stage 1 DFS envisions an open pit mining operation with a throughput of 5Mtpa and payback three years from the start of production.

Near surface mineralisation will be mined using free dig bulk mining methods, with a low strip ratio, to feed to a processing facility, which chemically washes the ore with a salt-based solution at mild acidic conditions.

This extracts the REEs into a value added intermediate chemical precipitate known as MREC with about 71% magnet and heavy REO content.

Notably, the DFS only covers the initial RL 1693 with further growth expected from the other tenements at the project.

European Critical Raw Materials Act

While the numbers for Makuutu Stage 1 are positive in their own right, the European Union’s recent proposal for a comprehensive set of actions to ensure its access to a secure, diversified, affordable and sustainable supply of critical raw materials puts further impetus to its development.

The Act identifies a list of strategic raw materials, which are crucial to technologies important to Europe’s green and digital ambitions and for defence and space applications.

It seeks to ensure domestic capacities along the critical raw materials supply chain of:

  • At least 10% of the EU’s annual consumption for extraction,
  • At least 40% of the EU’s annual consumption for processing,
  • At least 15% of the EU’s annual consumption for recycling,
  • Not more than 65% of the Union’s annual consumption of each strategic raw material at any relevant stage of processing from a single third country.

The last point is particularly relevant for REEs as the EU currently sources 98% of its REE needs from China, which the development of Makuutu could quite easily alleviate or even solve.




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.