Norway-based rare earth separation concern REEtec has agreed to buy 1000 tonnes per annum of rare earth oxide over five years, with an option of increasing offtake volumes up to 5000tpa over 10 years.

 

The agreement excludes cerium, and is based on a pricing mechanism that will set a minimum payment for both Vital and REEtec equal to their cost of production, plus a share of the margins.

 

A definitive agreement is expected to be signed by January 31, 2021, and assumes both companies will take near-term final investment decisions, with Vital to commit to developing Nechalacho, and REEtec on a commercial-scale plant for its new process for the separation of high purity rare earth elements that has low energy demands and is said to reutilise virtually all consumables in the production process.

 

It has been proven at a demonstration plant, and is now ready to be scaled up, to generate materials for electric vehicles, wind turbines, consumer electronics and industrial robots.

 

Vital managing director Geoff Atkins said both likeminded companies were committed to delivering low environmental impacts, and diversifying supply chains with sources of rare earths outside China. 

 

Vital is needs just A$20 million to get Nechalacho into production by mid-2021, with an initial focus on recovering ore from the top 100m of the North T open pit.

 

It has a binding agreement with the Saskatchewan Research Council to negotiate definitive agreements for the construction and operation of a $5.25 million rare earth extraction plant.

 

Vital completed an $8 million raising at 2c per new share in September.

 

The stock, which has traded between 0.5c-4c over the past year was up 3% today to 3.3c, valuing the company at $87 million.