Ucore Rare Metals: Tax relief of around USD 8.2 million draws closer

The market for rare earths, which are so immensely important in renewable energy and defense technology (to name just a few sectors), is still dominated by China, especially as far as their separation is concerned. Changing that, however, is now a high priority in the West and especially in the United States. Canada’s Ucore Rare Metals (WKN A2QJQ4 / TSXV UCU), wants to position itself precisely in this market with its RapidSX rare earths separation process.

Currently, CEO Pat Ryan’s company operates a demonstration plant in Kingston, Canada, from where the RapidSX technology will be transferred to the planned Strategic Metals Complex (SMC) in the state of Louisiana. Part of the decision to build the first Ucore SMC there was the large tax benefits totaling up to $15 million for which the company can qualify with the state of Louisiana. And in this regard the company, has now cleared some major hurdles!

Louisiana local tax exemption approval process completed

That’s because, as Ucore just announced, it has received approval from the Louisiana Board of Commerce and Industry for what it calls its Industrial Tax Exemption Program (ITEP) and has also been able to obtain approval from local agencies – Rapides Parish’s Police Jury, School Board and the Sheriff’s Office.

ITEP is offering the company an exemption for up to ten years (five years initial term at 80 percent and five years renewal term at 80 percent), which could result in a projected $8.2 million in local property tax savings for Ucore on the facility during the exemption period, subject to final approval by the Governor!

“Ucore is extremely grateful to the Louisiana Economic Development Authority, the C&I Board, the Police Jury, the School Board and the Rapides Parish Sheriff’s Office for their support in issuing the ITEP permits required to date to advance our LA-SMC project in Alexandria, Louisiana,” said Mike Schrider, vice president and chief operating officer of Ucore. “The overall state and local support we are receiving to build one of the first advanced rare earth processing facilities in North America is an amazing experience, and we are working diligently to deliver a project in Louisiana that has the potential to significantly improve the manufacturing landscape across North America as the world shifts to electrification.”

Start of production planned for early 2025

The company plans to develop an 80,800-square-foot existing facility in Alexandria, Louisiana, into its first, commercial rare earth processing plant in North America. In total, plans to date call for more than $75 million in investment in the facility, which is expected to lead to the creation of about 100 new jobs.

Ucore says it is making good progress with technology commercialization and transfer from Kingston to Louisiana, and expects to start production with a capacity of 2,000 tons of TREO (excluding cerium and yttrium) at England Airpark in Alexandria in early 2025. Production capacity is then expected to increase to 5,000 metric tons per year in 2026 and finally reach 7,500 metric tons in 2027. An important part of these plans is the procurement of a secure, preferably North American, source of raw materials, but according to Ucore, the company is also well on track in terms of raw material supply contracts, advance purchase agreements and supply offtake agreements.