Ucore Rare Metals (TSXV: UCU; WKN A2QJQ4) reports a development that could represent a significant strategic shift for Western magnet supply chains: The company has signed a Memorandum of Understanding (MOU) with Vacuumschmelze GmbH & Co. KG (VAC) and eVAC Magnetics LLC to coordinate the supply of high-purity rare earth oxides (REO). The agreement provides for the synchronization of REO products from Ucore’s planned facilities in Alexandria (Louisiana, USA) and Kingston (Ontario, Canada) with eVAC’s phased magnet production in Sumter County, South Carolina, and VAC’s European sites. The goal is to make material flows for NdFeB and SmCo magnets predictable in North America and Europe.
Ucore: Content of the Memorandum of Understanding and Production Sources
At the core of the MOU are separated oxides of neodymium (Nd), praseodymium (Pr), terbium (Tb), dysprosium (Dy), samarium (Sm), and gadolinium (Gd). Ucore intends to supply these REOs to VAC and eVAC – coordinated with the ramp-up of the Louisiana Strategic Metals Complex (Louisiana SMC) in Alexandria and the commercial demonstration plant in Kingston, Ontario. The technological basis for this is Ucore’s proprietary RapidSX™ separation platform, which is designed for the separation and purification of rare earths and is superior to the usual, traditional methods used by China.
From the partners’ perspective, the agreement complements existing investments along the value chain: eVAC has completed the establishment of a permanent magnet production facility in South Carolina; these activities are supported by federal and state levels, including a Qualifying Advanced Energy Project Tax Credit of USD 111.9 million and additional funding instruments. VAC has been producing permanent magnets in Europe for decades and accordingly requires REO supplies for product lines in NdFeB and samarium-cobalt (SmCo).
Magnet Value Chain: why NdFeB and SmCo Demand Material Security
The cooperation addresses two pillars of the magnet industry. NdFeB magnets are widely used in automotive, industrial automation, and renewable energies; their performance often depends on heavy rare earths such as Dy and Tb, which increase temperature stability. SmCo magnets excel at high operating temperatures and in safety-critical applications, such as radar, sonar, and steering systems, as well as in parts of aerospace. For both magnet types, specification-accurate oxides are the necessary precursor – only they enable the downstream reduction to metals, alloy formation, and subsequent magnet production.
Against this backdrop, Ucore views the MOU as a building block to establish predictable, transatlantic material supply chains. By combining the planned REO output from Louisiana (focus on heavy REE for NdFeB grades) and Ontario (focus on Sm/Gd for the SmCo chain), VAC/eVAC can align their production plans with material availability from allied jurisdictions.
Locations, Policy Framework, and Timeline
The signing of the declaration took place on the sidelines of the G7 meeting of energy and environment ministers – an environment that underscores the industrial policy dimension of the cooperation. Ucore points out that the planned REO deliveries are in line with the phased expansion of its own separation capacities. In parallel, eVAC is ramping up magnet production in Sumter County, while VAC leverages its European capacities and process IP.
The parties have agreed to define the structure and commercial terms of a long-term definitive agreement within nine months. Regular progress reviews are planned until then. For the market, this means: The cooperation now outlined has a clear roadmap, but will only become legally binding with a final supply agreement.
Significance for Ucore and Western Supply Chains
For Ucore, the Memorandum of Understanding is a signal towards the off-take and qualification chain: an REO customer network with VAC/eVAC increases the visibility of planned RapidSX™ capacities in Louisiana and Ontario. At the same time, the alliance addresses structural issues of supply chain security in Europe and North America – especially where magnet materials are increasingly considered key components in e-mobility, energy transition, and security applications.
From an industry perspective, three points come into focus: Firstly, the specification capability of the planned REO production (quality and purity requirements for different magnet grades). Secondly, the synchronization of material and production capacities across multiple locations and jurisdictions. Thirdly, the contractual level – i.e., the transition from the MOU to binding off-take agreements once Ucore’s facilities reach the respective milestones.
