A ten-year purchase agreement is planned for certain quantities of neodymium-praseodymium oxide, dysprosium oxide and terbium oxide, which NioCorp wants to produce in its ‘Elk Creek Critical Minerals’ project in the southeast of the US state of Nebraska. However, the project is still conditional, as NioCorp has yet to secure “adequate project financing”.
The agreement between the two companies is still a “term sheet”, meaning that it only sets out the key points that both parties expect and want to include. This document is not binding. Stellantis also writes that it aims to “help accelerate NioCorp’s path to commercial production of magnetic rare earth oxides in the US.” In other words, the carmaker wants to participate in the financing of the project. However, neither the amount of the necessary financing nor the planned Stellantis participation is mentioned in the current announcement. Also, the final delivery quantities are to be determined only in a “definitive agreement”.
This may also be due to the early stage of the Elk Creek project. For, as Stellantis writes, no economic analysis has yet been carried out. As a result, “further studies are required before determining whether extraction of rare earth elements can be reasonably justified and is economically viable after taking account of all relevant factors,” the manufacturer writes. So whether material will ever be mined there is not yet certain. In addition to economic viability, regulatory approvals, a “satisfactory completion” of due diligence or the negotiation and determination of final terms are also mentioned as bases for a binding supply agreement.
Incidentally, NioCorp’s Elk Creek project is not primarily about mining rare earth materials; niobium, scandium and titanium are the main minerals to be mined in southeast Nebraska. The company is also “evaluating the potential” to produce various rare earths from the Elk Creek project, according to Stellantis. Niobium is used to make special alloys as well as high-strength, low-alloy steel, which is also used in the auto industry. Scandium is a special metal that can be combined with aluminium to produce alloys with increased strength and improved corrosion resistance – for example in solid oxide fuel cells.
“Stellantis intends to lead the industry with the commitment to be carbon net zero by 2038 – a goal that requires innovation and a complete redefinition of our sourcing strategies,” says Maxime Picat, Chief Purchasing and Supply Chain Officer at Stellantis. “By working with partners like NioCorp, we are taking important steps, with the aim of decarbonizing mobility and ensuring strategic supplies of raw materials necessary for the success of the Company’s global electrification plans highlighted in our Dare Forward 2030 strategy.”
“We are very pleased to announce that NioCorp and Stellantis have agreed to collaboratively develop Stellantis’ magnetic rare earth supply chain, including helping to identify a sintered rare earth permanent magnet manufacturer that provides additional geographic optionality to Stellantis, in support of their ambitious commitment to reach carbon net zero by 2038,” said Mark Smith, Executive Chairman and CEO of NioCorp. “We believe that NioCorp’s position as a potential U.S. supplier of multiple critical minerals needed for vehicle electrification offers Stellantis important optionality to secure supply chains and support its growth targets.”
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