RE: Wood Group Study14 Oct 2020 09:13
PART 2
All of these factors would be hugely advantageous to Pensana should it decide to go ahead. The financial commitment for such a facility would be huge and Pensana will need all the support it can get. Perhaps also, there will be pollution concerns but the prospect of creating and owning one of the only major rare earth facilities outside of China is too big an opportunity to miss. One thing is certain, you cannot guarantee continuity of supply if you are reliant on one country for processing.
Will there be competition? Well yes, the US have already stated they will assist MP Materials (privately owned) with funding as well as Australia’s Lynas Corp to develop rare earth separation facilities in California and Texas that will rival China’s.
Could such a facility be built in Africa – yes of course, there would be less environmental concerns, cheaper labour etc. but you would be at the mercy of Chinese (built and owned) infrastructure and the instability of government and economic policy.
As an aside, MP Materials could be an interesting investment play, they are expected to list on the New York Stock Exchange (NYSE) later this year under the ticker MP. The company stated it was “poised to become the Western champion of rare earth magnetics, onshoring a critical sector that will power a sustainable future.” No doubt Tesla and EV manufacturers would be interested in securing a rare earth supply source nearer to home.
Pensana have a switched-on management team who should be able to make the most of any opportunity that falls its way, let’s hope the Wood Group Study is of the same opinion and recommends the building of the rare earth facility in the UK. Remember, the Humber Enterprise Zone is very well positioned to serve the UK and European markets.
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