Ucore Rare Metals (TSXV: UCU, OTCQX: UURAF, WKN: A2QJQ4) has received a milestone payment of US$1,057,412 from the US Department of Defense. The trigger was the successful separation of terbium from dysprosium, two important, so-called heavy rare earths.
This increases the total amount of grants already received from the Pentagon to US$3,352,884. Thus, US$647,116 from the first phase of funding is still outstanding, which Ucore is expected to receive in the coming months. This brings the first phase of cooperation to a close, and attention turns to the second phase, which will begin soon.
Rare earths have been classified as critical minerals by the US government. For the United States, heavy rare earths are of particular interest, as they are indispensable for the production of armaments, among other things. However, around 90% of rare earths are mined in Chinese mines, and China also controls the processing of rare earths at a similarly high percentage.
In negotiations with the US regarding the tariff dispute, China has used rare earths as leverage this year and temporarily excluded US companies from rare earth supply. The US government thus became painfully aware that, through inaction in recent decades, it had maneuvered itself into a strategic dependence on China, which is considered extremely problematic from a national security perspective. For this reason, the US Department of Defense is now directly participating in companies that develop rare earth properties or, as in the case of Ucore Rare Metals, entering into direct cooperations with them.
Ucore: Cooperation with the Department of Defense Enters Second Phase
For the Pentagon, the separation of terbium and dysprosium, two important heavy rare earth metals, is paramount in its cooperation with Ucore. Therefore, the Department already supported the company in a first phase with a payment of US$1.1 million, which was intended for the expansion of Ucore’s commercial rare earth metal refinery complex in Louisiana. In total, the grants for the first phase will reach a total volume of US$4 million.
In recent weeks, representatives from Ucore and the Pentagon met again to discuss and launch the second phase of the planned cooperation. It will be supported by the US government with an additional US$18.4 million. The grant enables the construction of the first commercial-scale RapidSX™ plant at Ucore’s planned rare earth refinery in Louisiana. The focus will continue to be on heavy rare earths.
Both phases build logically upon each other. While the first phase focused on demonstrating the effectiveness of the company’s proprietary RapidSX™ process for extracting four primary rare earths in a demonstration program, the second phase will focus on commercial operation of the plant. It is intended to prove at this point that it is possible to end the dangerous dependence on China through sufficient and stable domestic production.
Ucore Rare Metals Aims to Significantly Contribute to Ending Dependence on China
The four rare earths isolated by the plant are all needed for the production of permanent magnets. They are used, among other things, in advanced military technologies and are therefore crucial for the national security of the United States. Permanent magnets are used, for example, in precision-guided missiles, radar systems, and F-35 engines. Beyond the defense sector, these advanced magnets are also used in semiconductors, wind turbines, electric vehicles, as well as in robotics and artificial intelligence.
During the kick-off meeting, the project team, composed of representatives from both sides, confirmed the short-term milestones and goals currently being implemented. Therefore, the detailed design and development of commercial-scale RapidSX™ columns at Ucore’s Commercialization and Demonstration Plant in Kingston, Ontario, Canada, were discussed. Subsequently, the fieldwork for the new plant development in Alexandria, Louisiana, was also addressed. The work here is to be concluded with the construction of a commercial-scale RapidSX™ plant and its subsequent commissioning. Afterwards, continuous production readiness is to be demonstrated through the production of marketable individual rare earth products.
“With the full mobilization of Phase 2 of the award, we are now moving RapidSX™ from the commercial demonstration phase to full-scale production readiness,” reported Mike Schrider, Ucore’s Chief Operating Officer. “The continued support for our project and the rare earth sector as a whole from the US Department of Defense will accelerate this process and help secure a North American rare earth supply chain.”
The company supports the Pentagon’s comprehensive strategic initiatives to strengthen the domestic rare earth supply chain. Recent policy considerations, including price floors and off-take agreements, represent, in Ucore’s view, important mechanisms to strengthen industry stability and investor confidence. These efforts, in addition to direct project financing such as Phase 2 funding, are crucial for Ucore in building a robust, North American-focused rare earth supply chain that is independent of China and thus outside its control.
