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Pensana plans $125M rare earth separation facility in England

UK-based Pensana plans to build, subject to funding, a US$125-million sustainable rare earth separation facility at the Saltend Chemicals Park (“SCP”) in Humber, UK. Targeted production is around 12,500 annualized tonnes of rare earth oxides, including 4,500 tonnes of magnet metal rare earth oxides (NdPr), which would represent approximately 5% of 2025 projected world demand.

The Saltend plant would purify rare earth sulfates, which would be imported from the company’s Longonjo mine in Angola.

Saltend has the potential to become the first major separation facility to be established in over a decade—one of only three major producers outside China—at a critical juncture when Europe depends on China for 98% of its rare earth magnets.

The global rare earth market, driven by demand from industries including electric vehicles and offshore wind, is expected to increase five-fold by 2030 and the NdPr oxide price is forecast to increase at a CAGR of 4.8 - 9.9%, underpinning strong economics for the investment. With approvals in place for both Saltend and Longonjo, we are looking to commence the development of both projects later this year.—Pensana’s Chairman, Paul Atherley

Saltend has received first phase progression from the UK Government’s £1-billion Automotive Transformation Fund which seeks to support the national transition to electric vehicles.

Pensana has received indications of potential financial backing which include its major shareholder, the Angolan Sovereign Wealth Fund (23%), and approaches from a wide range of financial institutions to date as it seeks to review the potential funding sources and structures to deliver its plans.

Lynas Corporation of Australia, currently the world’s largest non-Chinese producer, last year produced around 4,700 tonnes of magnet metal oxides from its facility in Malaysia. MP Materials is planning to produce around 6,000 tonnes of magnet metal oxides from 2023.

China currently supplies 98% of Europe’s rare earth magnets. Under the recently announced US$11-trillion Carbon Neutral 2060 Plan, China will spend a further US$3.8 trillion on wind and solar up to 2050, raising concerns that it will need all of its current magnet production and more to meet its internal targets.

Europe’s industries central to the green economy are almost totally dependent on magnets supplied from China and there are concerns that much of that supply is “unsustainably” produced.

China installed 58GW of wind capacity in 2020, exceeding the total capacity installed worldwide in the previous year.

Pensana is a founding member of the European Raw Materials Alliance (ERMA) which has stated that building sustainable rare earth oxide production and separation capacity in Europe is critical to meet the burgeoning demand from electric vehicle and offshore wind growth.

Green and digital technologies currently depend on a number of scarce raw materials. We import lithium for electric cars, platinum to produce clean hydrogen, silicon metal for solar panels, 98 percent of the rare earth elements we need come from a single supplier—China—and this is not sustainable.

—Ursula von der Leyen EU President, February 2021

UK engineering experts Wood Group plc designed the Longonjo mine in Angola to international standards; the mine features hydro-electric power and a tailings storage facility to meet the recommendations of the Church of England Pensions Board and ICMM guidelines.

The near surface, high-grade project is linked to the Atlantic port of Lobito by the recently upgraded Benguela railway line. The Wood Group supervised metallurgical testwork and pilot plant trials undertaken to date demonstrate that this will produce a clean, high-value mixed rare earth sulfate for further separation at Saltend. Angola is focused on diversifying its economy away from depending on oil, gas and diamonds, towards tourism, agriculture and value-added resource development.

Angolan President Lourenço recently commented to international media that he has high hopes for Longonjo as a flagship achievement of his mining reforms.

Pensana is in active discussions with third parties for the additional supply of sustainably sourced rare earth carbonates in addition to plans to process Longonjo feedstock material. Once in production, Pensana will look to expand production capacity when additional feedstock becomes available.

Through teaming up with alloy makers and magnet manufacturers, the Company is looking to establish a 3,000 tonne per year metal facility at Saltend to supply European automotive and wind turbine original equipment manufacturers.

Recycling. Europe currently recycles less than 1% of magnet metals at a time when consumption is growing rapidly. To tackle this problem, Pensana is exploring the use of blue hydrogen generated by Equinor at Saltend Chemicals Park to recycle an addressable annual market of 4,000 tonnes of permanent magnets from end-of-life electric vehicle motors and wind turbine nacelles.

The Equinor-led Hydrogen 2 Humber (H2H Saltend) project plans to capture carbon and supply blue hydrogen as part of Zero Carbon Humber, a partnership to build the world’s first net zero industrial cluster.

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