RareX in halt ahead of tasty niobium acquisition

RareX in halt pending announcement on strategic niobium acquisition
Niobium is a critical mineral used to strengthen steel and is gaining traction as a cobalt substitute in lithium batteries
Acquisition will leverage experience gained in developing the Cummins Range REE and phosphate project

Special Report: RareX is leveraging the experience gained in developing the promising Cummins Range rare earths and phosphate project towards a new strategic niobium acquisition.

The new acquisition is a direct result of the company’s decision earlier this year to start searching for projects that would complement its flagship Cummins Range project, which hosts a resource of 524Mt grading 0.31% total rare earth oxide (TREO) and 4.6% phosphate.

Cummins Range could supply 12,000t of rare earth oxides and 169,000t of battery grade phosphate for 15 years, according to a strategic update released in October last year.

REE will initially make use of the phosphate dominant overburden material for a planned, low-cost Stage 1 pre-strip development will see the production of an initial 300,000tpa of direct shipping ore phosphate.

This will de-risk the expected 550,000tpa of higher value phosphate-rare earth dual mineral concentrate produced under the Stage 2 beneficiation operation.

REE has already completed all critical environmental baseline studies for Cummins Range, paving the way to formally engage with regulators to progress towards the next phase of approvals.

Niobium acquisition

Earlier this year, RareX (ASX:REE) said it was evaluating projects and jurisdictions for expansion, prioritising Australia, Canada and the Kingdom of Saudi Arabia.

The company is now in a trading halt pending the release of an announcement regarding a niobium acquisition and capital raising.

While no details have been released about the acquisition, REE’s decision to go with a niobium play isn’t hard to understand given the similarities with Rare Earths in both geological settings (carbonatities) and in technical development, but also the positive press that the critical mineral has received.

Up to 90% of niobium is produced in Brazil and is used to strengthen steel alloys, although it is also gaining traction as a cobalt substitute in lithium batteries that charge faster, last longer and reduce fire risks.

Niobium is also responsible for Western Australia’s West Arunta region gaining prominence after WA1 Resources (ASX:WA1) unearthed its super high-grade Luni niobium deposit, which sparked a scramble to snap up prospective ground in the region.

The halt will last until the earlier of the start of trading on Thursday, 23 May 2024, or the release of the announcement.

This article was developed in collaboration with RareX, 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.