Aclara Resources signed a Memorandum of Understanding with VACUUMSCHMELZE GmbH & Co. KG (VAC), which establishes a non-binding, non-exclusive, preliminary agreement, to approach potential clients jointly as a “mine-to-magnets” solution for ESG-compliant permanent magnets.

Aclara is a development-stage company that is focused on heavy rare earth mineral resources hosted in Ion-Adsorption Clay deposits. The company’s rare earth mineral resource development projects include the Penco Module in the Bio-Bio Region of Chile and the Carina Module in the State of Goiás, Brazil.

VAC is a leading global producer of advanced magnetic solutions, rare earth permanent magnets, and inductive components.

Aclara and VAC believe that there is a significant market opportunity driven by the rising demand for EVs, wind turbines, and other clean technologies that require rare earth permanent magnets produced pursuant to ever-increasing ESG standards. Such permanent magnets require significant quantities of both light and heavy rare earth minerals.

Currently, obtaining these rare earth mineral materials while also having the capacity to process them, combined with the industrial technology needed to fabricate permanent magnets, is very limited and concentrated among a few Asia-based suppliers. This supply/demand dynamics results in a promising background to develop a new, resilient, ESG-focused supply for permanent magnets, according to the partners.

Aclara is one of the few potential suppliers of Dysprosium and Terbium, two highly coveted heavy rare earth minerals which are key in the production of permanent magnets and are not easily available outside of Asia. Aclara is currently developing two ionic clay projects, one in Chile and another in Brazil, for the production of a high-purity heavy rare earth carbonate. In addition, the company is developing processing technology through its US-based subsidiary to be able to receive this carbonate and produce with it magnetic alloys. These alloys, in turn, are the key input required by VAC to produce permanent magnets.

VAC, with its main permanent magnet facility located in Hanau, Germany, recently executed a contract with General Motors (GM) to supply GM with permanent magnets by building a new magnets’ plant in South Carolina.

The collaborative relationship between Aclara and VAC is not structured as a legal entity. Instead, each of the parties will engage in collaborative efforts, in a relationship characterized as (i) preferred supplier- purchaser and (ii) cooperation on marketing, customer relations, and related matters. Highlights of a number of the collaborative next steps include but are not limited to:

• VAC’s intention to support the further development of Aclara’s rare earth metals and alloys existing joint venture project with CAP S.A., by providing product specification requirements to produce the high-performance permanent magnets used in EVs;

• the intention of both parties to jointly analyze the mine to magnets cost structure to develop an optimal cost-effective solution for potential customers; and

• the intention of both parties to jointly approach potential new customers and present them with a ‘one-stop-shop’ solution to secure geopolitically independent and ESG responsible permanent magnets.

Aclara’s rare earth extraction process offers several environmentally attractive features. Circular mineral harvesting does not involve blasting, crushing, or milling, and therefore does not generate tailings and eliminates the need for a tailing’s storage facility. The extraction process developed by Aclara minimizes water consumption through high levels of water recirculation made possible by the inclusion of a water treatment facility within its patented process design. The ionic clay feedstock is amenable to leaching with a common fertilizer main reagent, ammonium sulfate.

In addition to the development of the Penco Module and the Carina Module, the company will continue to identify and evaluate opportunities to increase future production of heavy rare earths through greenfield exploration programs and the development of additional projects within its current concessions in Brazil, Chile, and Peru.