Neo agrees to buy Greenland rare earth project from Hudson Resources

AnorTech

22/08/2022 12:00

LONDON, Aug 22 (Reuters) - Neo Performance Materials
 NEO.TO  has agreed to buy a rare earth mining project in
Greenland owned by Hudson Resources  HUD.V  to supply its
growing needs for the minerals to produce permanent magnets, the
two Canadian-listed firms said on Monday.
    The European Union wants to develop domestic output of rare
earth magnets - key for both electric vehicles and wind turbines
- to help meet targets for cutting carbon emissions and to
reduce reliance on China.  urn:newsml:reuters.com:*:nL8N2Y33FS
    Neo will buy the Sarfartoq project for a total of $3.5
million, contingent on the Greenland government approving the
transfer of the licence for the project, the companies said in a
statement.
    Last year, the Greenland government banned uranium mining,
effectively halting development https://www.reuters.com/business/sustainable-business/mining-magnets-arctic-island-finds-green-power-can-be-curse-2021-03-02
 of the Kuannersuit rare earth project owned by Greenland
Minerals  GGG.AX .  urn:newsml:reuters.com:*:nL2N2W20W5
    The Sarfartoq project does not contain elevated levels of
uranium, but has high levels of neodymium and praseodymium, two
essential elements for rare earth permanent magnets, Hudson has
said.
    Neo plans to develop the mine to supply its rare earth
business, including a rare earth separation plant in Estonia,
which it plans to expand into a European hub to produce rare
earth alloys and magnets.  urn:newsml:reuters.com:*:nL8N2S75S2
    "Once in production, this project will significantly
increase the diversity of global rare earth supply for our
processing facilities around the world," said Neo Chief
Executive Constantine Karayannopoulos.
    China is the world's dominant producer of rare earths,
accounting for about 90 percent of global supplies.
    Under the agreement, Neo will initially pay Hudson $250,000
and upon Greenland government approval, will pay an additional
$3.25 million for the project, which will be placed into a
special purpose entity.
    If the mine is sold or listed within five years, Hudson
would get 5% of any proceeds or equity. 

 (Reporting by Eric Onstad; editing by Diane Craft)
 ((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO;
 Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))