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A Green gold giant In the making

Ionic Rare Earths

Mining Feature

A Green gold giant In the making 2

Issue 102 · Business Enquirer Magazine

PROJECT DIRECTED BY

WRITTEN BY

Liam O’Hara

Jay Benmehidi

Ionic Rare Earths The global race to secure a plentiful supply of rare earth metals, a grouping of 17 somewhat peculiar elements that are crucial to the manufacture of all manner of hi-tech products, is at the heart of geopolitical strategy for the world’s major powers, and for good reason – our goal to build a prosperous sustainable economy of the future depends on it. Take neodymium and dysprosium, for example: the key metals that are used in the manufacture of permanent magnets. A wind turbine with a power output of one megawatt requires one ton of permanent magnets to operate, whilst an EV (electric vehicle) typically uses over 10 kilograms of neodymium and other rare earth elements for its engine and rechargeable batteries. And this is just the tip of the iceberg – rare earths are used to manufacture iPods, home appliances, solar panels and energy-saving lightbulbs in a civilian capacity, and are also essential in the manufacture of key defence technologies. Suffice to say their nickname ‘green gold’ is wellearned: “A lot of governments globally want to be carbon neutral by 2050, and they’re going to need these elements for their offshore wind turbines. There are many, many very high-end applications that realistically you can’t develop without rare earths: if countries don’t build up stocks, they may have difficulties meeting their needs.” explained Tim Harrison, CEO of Ionic Rare Earths. He continued: “At this point in time the heavy rare earths sector is controlled by China, which basically produces around 95 to 98% of the world’s supply. They have a substantial monopoly over the market and wield immense control. And I think the events of the last 18 months regarding COVID-19 has probably indicated the fragility of the global supply chain, which has probably pushed a lot of countries towards seeking independence in supply chain.”

Tim Harrison, CEO of Ionic Rare Earths

Issue 102 · Business Enquirer Magazine

Unlike other key metals such as copper, iron, gold, and zinc, rare earth elements (REEs) rarely

occur in sufficient enough concentrations to justify the expense of extracting them, but contrary to their name, rare earth elements are not actually rare per se, as recent geological have shown. However, whilst rare earth deposits that are suitable for development might be plentiful enough on paper, at present, it is virtually impossible to source rare earths outside of China – a state of affairs that is causing quite the headache for an increasingly resource-hungry world. Demand for rare earths has outstripped supply in recent years, and with the green energy revolution underway this gap supply-demand gap is only going to increase. Moreover, it is a tragic reality that strained relations between China and many of the world’s other leading nations is contributing to anxiety in some capitals regarding the long-term viability of the current

Australia’s Leading Engineering & EPC Contractor Proud to provide service and support to Ionic Rare Earths in advancing the Makuutu Rare Earths project.

+61 4195 26025 www.mincore.com.au

Business Enquirer Magazine · Issue 102

Ionic Rare Earths rare earths market status quo. In the face of such challenges, efforts to diversify rare earth supplies by building production capacity has become a geopolitical imperative, and as a result an ever-increasing number of REEs projects are coming on stream across the world.

Mining Feature Social engagement, at a community level

It is well-known that a growing number of rare earth mines have entered production in Japan, Australia, Greenland, Finland, the US, and South Africa in recent years, but today all eyes are on the development of Ionic Rare Earth’s flagship Makuutu project in Uganda, a site of extraordinary promise that holds significant quantities of ionic adsorption clay – an astonishingly rare and resource rich type of rare earth deposit that is seldom found outside of the East/South-East Asia region: “I’ve seen the type of adsorption clay mineralisation we’ve got at Makuutu be called the holy grail of rare earth projects before because they’re so highly sought after, but so very difficult to find. Ionic adsorption clays or are very rare outside of southern China - there’s less than a handful of these deposits known globally. And when it comes to ionic absorption clay deposits the size of Makuutu, there’s ourselves, there’s another one in Brazil, there’s a small one in Chile, and potentially a few popping up here in Australia. And so when the company came across the asset back in 2019, they moved very quickly to secure an option over it. That decision back in 2019 has now placed Ionic Rare Earth in a fantastic position to develop what is one of less than a handful of true ionic adoption clays outside of southern China and South-East Asia. It’s a tremendously good position to be in. The rare earths we’re going to produce will be increasingly more difficult to find in the future, and we’re going to be in a position where we’re driving the development of that asset. It stands apart from a lot of the projects being evaluated globally. It supplies the full mix of rare earths that are required. So as a long-term option

Issue 102 · Business Enquirer Magazine

Mining Feature to help the world find those rare earths that it’s going to need to be able to move towards carbon neutrality, yeah, Makuutu ticks all the boxes.” Located 120km east of the Ugandan capital, Kampala, Makuutu hosts a resource of around 315 million tons that has been identified over a 20km length. With a projected operating life of more than 30 years, the project is believed to have the potential to generate a high margin product, and is also prospective for a low-cost Scandium co-product. Ionic RE is advancing the Makuutu Rare Earths Project with the aim of becoming a world-leading supplier of critical and heavy rare earths, to support growing global demand as the world transitions to cleaner renewable energy and transportation. The number of light rare earth projects that have come on stream around the

Drilling underway

Issue 102 · Business Enquirer Magazine

Ionic Rare Earths world in recent years is impressive, but there are still only a handful of critical heavy rare earths producers outside of China: this is where Makuutu’s basket of REEs, which includes significant quantities of heavy and critical rare earth elements, sets Ionic RE apart from most other rare earths miners. The company is in an enviable position, as Tim admits, when he elaborated further on how Ionic came to acquire Makuutu and the status of its development: “Ionic RE, back in August of 2019, acquired a 20% interest in the Makuutu project. We as Ionic are earning into the project we’re funding the development, all of the technical work programme, the studies, all of the work that’s required for the tenements to be converted from exploration tenements to ultimately a mining lease, and then a mining operation.

Over the past 18 months, since I’ve been involved, the company has been solely focused on advancing the project, getting the work programme completed to de-risk the project, and move to the next level of investment. At present, development of the Makuutu project is still very much in its infancy. It is anticipated that a feasibility study should be completed for November 2022, and initial projections expect that Makuutu will be ready to enter production for 2024 which could see the project produce 800–1,000 mt/year of rare earths oxide.” Going forward, whilst there is much work to do to ensure that Makuutu is able to fulfil its enormous potential and begin production in 2024, Tim is understandably upbeat about the future of Ionic RE and what the coming year holds for the company. He concluded: “We have got a very, very valuable product, we’ve got a very large deposit. We’ve got a lot of it. And because of that, it’s a tremendously strategic project. It’ll be very interesting to see how the project unfolds over the next 12 months. Currently, we’re talking to lots of groups around the world. We have got a non-binding employee with the Chinese group - they did 12 months of due diligence on the project to try and get comfortable and understand its potential. I think it’s only a matter of time before other groups globally join the dots, too, which means that ultimately we’ve got an even more valuable project once other groups become more aware of the importance of Makuutu.”

Atacama Consulting is a leading environmental and social advisory firm based in Kampala, Uganda. We pride in ensuring that the services offered and the associated processes thereof benchmark with requirements stipulated in the national environmental and social legislation, financing institutions such as the International Finance Corporation’s Performance Standards on Environment and Social Sustainability and the Equator Principles and good international industry practices. Having provided similar services in the East African region over the last fifteen years, we are glad to partner with Ionic RE on its one-of-a-kind large scale mining project, the first of its kind in Uganda to provide social advisory services, starting with the development of a Stakeholder Engagement Plan (SEP) that spans the entire project lifecycle, right from the project planning stage. The SEP is a ‘living’ document that will be updated as and when required based on changes in scope, legislation and stakeholders identified, among other reasons. Guided by the SEP and commencing with the post scoping phase, the Environmental and Social Impact Assessment (ESIA) engagements at both national and local levels were undertaken successfully. These particular engagements presented a unique experience, though, due to Covid-19. Atacama has had to modify its approach to stakeholder engagement to ensure the highest standards of health and safety not only for our teams but also for all stakeholders and the communities within which we work. Virtual/ online meetings were embraced for high-level meetings, while radio shows were particularly resourceful for local community engagements. Cognisant of the limitations of access to information that the communities may face, we remain hopeful that a time will come when we shall be able to engage with communities in a physical manner, as was the case prior to the Covid-19 pandemic. Covid-19 notwithstanding, Atacama continued to support Ionic RE to collect socio-economic baseline data, which will inform the ESIA. The rather extensive activity involved administering a questionnaire to over 450 potentially affected households as well as collecting qualitative data relating to cultural heritage and archaeology, public health, energy, infrastructure and logistics to provide an understanding of the reasons behind social trends, demographic changes, settlement patterns or changes in the Makuutu Rare Earth Project area. We remain committed to supporting Ionic RE in all its environmental and social management endeavours in Uganda.

www.atacama.co.ug

Driling begins at Ionic RE’s new site

Business Enquirer Magazine · Issue 102

Ionic Rare Earths +61 8 9481 2555 admin@ionicre.com.au www.ionicre.com.au

info@busenq.com www.busenq.com