North America is at a critical juncture for supply chains. Many investors will be aware of China’s dominance over the rare earths supply chain, many more have yet to grasp its significance.
According to Politico, 85% of rare-earth processing is done in China, as well as 92% of permanent magnet production that requires rare earth oxides. The gaping hole for North America and the rest of the world is obvious.
Why is this important?
Permanent magnets are used in consumer electronics, electric vehicles and military equipment such as missiles, radars and stealth aircraft.
The challenge for North America is not simply the supply of rare earths but the necessity to have low-cost production of rare earth oxides that’s comparable to China, and this is where a company like Ucore Rare Metals Inc. stands out. They’re focused on the middle and the most profitable part of the supply chain for North America, and what should pique investors’ interest is no one else is doing this.
Ucore (TSXV:UCU, OTCQX:UURAF, Forum) is positioned to help solve the impending supply crisis by assisting with the creation of an independent supply chain of rare earth oxides for North American manufacturers. Instead of shipping rare earths off continent for processing (usually China) it will be done on home soil.
The company recently announced a US$4 million award from the U.S. Department of Defense, specifically the U.S. Army to demonstrate its rare earths separation technology, RapidSX™ at its demonstration plant in Kingston, Ontario.
Its progress over the past year highlights its value proposition.
Ucore has evolved beyond a demonstration plant. It’s focused on building its first strategic metals complex (SMC) in Louisiana, and the state government is backing it with up to US$15 million of incentives. This will be the first modern technology rare earth processing plant in North America.
The company is targeting the estimated $15.7 billion segment of the ex-China market and is currently raising funds via a brokered private placement. Investors can learn more about the investment opportunity that qualifies under LIFE rules (Listed Issuer Financing Exemption) allowing all investors to participate here.
For those unfamiliar with rare earth elements acronyms:
- REE: Rare Earth Elements
- HREE: Heavy Rare Earth Elements
- LREE: Light Rare Earth Elements
- REO: Rare Earth Oxides (used in permanent magnets)
- SMC: Strategic Metals Complex (where REEs are separated and result in REOs)
- OEM: Original equipment manufacturer (target market)
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