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Green Economy

The rare earths that are elemental to Canadian success

A new rare earth elements mine provides Canada with the opportunity to become a cornerstone of North America’s critical minerals industry

Mining and mineral exploration have long been associated with the discovery, growth and prosperity of Canada’s three vast and remote northern territories: first, it was copper, then gold, followed by lead, zinc and, most recently, diamonds. Now, the region’s rare earth elements (REEs) are starting to attract international attention.

Following the recent commencement of mining works at the Nechalacho rare earths project in May, 100km southeast of Yellowknife, capital of the Northwest Territories, Canada's first rare earth mining project – and only the second in North America – is scheduled to start this summer with ore sorting.

Operated by Cheetah Resources, a subsidiary of the Australian mining company Vital Metals, Nechalacho hosts one of the highest-grade rare earths deposits in the world. The company aims to produce a minimum of 5,000 tonnes of contained rare earth oxides (REO) annually by 2025. This means the mine would be the most substantial independent source of clean mixed rare earth feedstock outside China.

Nechalacho also affords Canada the necessary capabilities to position itself along the length of the rare earth elements value chain, while attracting investment in other strategic downstream industries such as aerospace and defence, electric motor manufacture, advanced manufacturing and materials, renewable energy and other clean tech.

As Cheetah Resources’ managing director, Geoff Atkins, explains, its status as the only rare earth project in Canada with near-term production capability, co-located with Canada’s only separation facility, gives Cheetah the opportunity to become a cornerstone of the recent Canada–US Joint Action Plan on Critical Minerals Collaboration.

“There are only six other rare earths elements separation facilities in the world outside of Russia and China,” says Atkins. “The one in Saskatchewan, once it's built by the Saskatchewan Research Council, will be the only one in North America, providing Canada with a strategic step forward.”

Prized for their high electrical conductivity, REEs – "lanthanides" in the periodic table – are essential components for aerospace and defence. They are also used inside everyday technologies such as smartphones, flatscreen TVs, computer hard disks, fluorescent lights and LEDs.

More importantly, the particular elements that are found in Canada’s Northwest Territories in relative abundance – neodymium (Nd) and praseodymium (Pr) – are crucial in the production of the kind of lightweight permanent magnets that feature in wind turbines and electric vehicles (EV), technologies that are critical to the Canadian economy and the world’s clean energy transition.

The price for neodymium and praseodymium (NdPr) rose almost 50 per cent in 2020 to US$65/kg. With the auto industry now committed to creating new EV and hybrid models, the Swiss investment bank UBS has forecast that the price of NdPr will reach US$100/kg by 2025. More widely, the global rare earth metals market has a projected CAGR of 12.33 per cent.

If the Nechalacho mine is a success, it will have profound economic and strategic implications, extending far beyond the world of mining.

In 2020, Chinese mines produced more than 55 per cent of total global output, and China produced 85 per cent of the world’s rare earth refined products. The country also dominates demand, with 70 per cent of global production consumed within its domestic market. If the Nechalacho mine is a success, it will have profound economic and strategic implications, extending far beyond the world of mining.

The first three steps of what promises to be a new rare earth supply chain all take place in Canada. After onsite mining and beneficiating (a process that separates the REE from unwanted waste materials) at Nechalacho, the resulting concentrate will then be transferred to Cheetah’s processing plant in Saskatchewan, where it will be turned into a mixed rare earth precipitate.

Cheetah has signed a funding agreement with the Canadian Northern Economic Development Agency (CanNor) for C$1.26m, and will use those funds to show the benefits, both environmental and economic, in sensor-based sorting of rare earth ore to produce a value-added mixed rare earth concentrate.

Seen in the context of the Joint Action Plan on Critical Minerals Collaboration, which was announced by the Canadian and US federal governments in January 2020, the Nechalacho mine looks set to play a key role in enabling Canada to assume an internationally strategic role as a supplier of critical minerals, a trusted partner in the establishment of secure supply chains and an essential participant in geostrategic dialogue.

Photo credit: Bill Braden Photo

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