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21/06/2024
Mining News

Canada’s Only Rare Earth Mine Will Sell Entire Raw Material to Chinese Group

Operator Vital Metals had already sold company shares to Shenghe. Setback for the development of a supply chain more independent of China.

Vital Metals, operator of Canada’s only rare earth mine Nechalacho, is selling all of its previously mined material to the Chinese industry giant Shenghe Resources for around 1.7 million US dollars. This was announced by Vital as part of a deal (PDF) that has now been concluded, which grants a subsidiary of Shenghe an initial 9.99 per cent stake in the company.

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As we reported, this investment was made, among other things, to settle the debts of the struggling Australian-based mining group. A few months ago, Vital had let its subsidiary responsible for setting up a Canadian rare earth processing plant go bankrupt in order to concentrate more on mining instead. Here, too, Shenghe’s financial resources are intended to help and, according to Vital, the company also wants to benefit from the expertise of its strategic partner and shareholder. However, as the Australian company emphasises in its announcement, Shenghe does not have any preferential rights to the future rare earth production of Nechalacho.

The cooperation runs counter to Vital’s original goal of becoming a supplier of rare earths more independent of China. The People’s Republic has a quasi-monopoly on the mining and, in particular, the processing of critical raw materials. There are only a few rare earth refineries outside of China; the raw material from the only rare earth mine in the USA, Mountain Pass – in which Shenghe also holds shares – is also currently processed there.

 

Source: RawMaterials

 

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