Rare Earths Norway (REN) is developing Europe's largest known rare earths elements (REE) deposit of the carbonatite type — the Fen Complex — aiming to be operational by the end of 2029. Argus spoke to acting chief executive and head of communications Alf Reistad and chief financial officer Tore Odegard about the progress made, the need to help early stage projects with financial de-risking, and navigating rare earth price volatility.
Congratulations on receiving your extraction permit in September. Please could you share an update on the Fen project?
We've drilled almost 20,000m during the past two years. In the first quarter of 2024, we'll have our inferred resource estimate down to 400m. We have some drill holes down to 1,000m so we know the deposit is at least 1,000m deep, but in the first stage we'll have an inferred resource down to 400m.
Also, we're working on developing the flow sheets for the processes, and the lab works have been very successful. The results will be the basis for an industrial pilot factory that we hope will commence operations in 2025. The pilot will be able to test quite big volumes and thus prove that the process works at an industrial scale.
The pilot will include test mining that we plan to start this summer. We are also in close dialogue with the authorities for a fast-track permitting process, and the municipality is working on the zoning plan.
What processes will the pilot plant carry out?
We will extract ore from our test mining projects — a total of 6,000t. We're in the preparation stage now so we will start this test mining next spring. This will be enough material for a three-year operational period for the pilot. The pilot plant will crush it, take it through a beneficiation process and a hydrometallurgical process, to produce a mixed rare earth carbonate.
REN aims to develop a mine-to-magnet supply chain in collaboration with other companies. Can you share any updates on those midstream and downstream stages?
We hope it's possible to establish a complete and compact value chain in Europe from mine to permanent magnets, we will be an enabler of such a value chain — the first step — and we are in dialogue with potential customers, which will be the next step and also companies further down the value chain. There is a great potential to build a supply chain with a low environmental footprint given our underground mining concept at Fen and close distance to central European markets, compared with the situation today, were we see the rare earths going a long distance between different continents.
Our mission is to be in operation by the end of 2029, which is very ambitious. We of course need to have offtake agreements with customers before our final investment decision, and we hope to have this is place by the end of 2026.
What are the biggest risk factors for a European rare earths company in the early stage of development?
REN is supported by robust Norwegian owners who have a long-term and industrial perspective on the development of the Fen deposit. This commitment is a fundamental condition for success. Concurrently, we are in search of financial risk mitigation for this critical early phase.
It's easier to get financing once you have a final decision to start operations, but at this early stage there is a lack of programmes for financial de-risking. When we look into different programmes in Norway, they've given a lot of financial support for piloting offshore wind farms, hydrogen production, CO2 handling and battery production. But that's towards the end of the value chain, and we're at the very beginning.
An additional challenge for the mineral industry is that we need to verify the resource and there are no supporting tools for that. Also, if you look at the total green value chain in Europe, the highest risks and the longest lead times are in mining. Our main message is that we need to have the same opportunities for financing as projects at the end of the value chain.
Are policy makers doing enough to help accelerate the development of Europe's rare earths industry?
There's good progress regarding permitting but we really need to see more on financial de-risking. We don't know in detail what will come from the Critical Raw Materials Act in relation to that, so we are waiting. That's the main bottleneck.
Another issue is — how can you secure visibility for your future earnings in this value chain with one dominant player?
Does price volatility and China's sway over the market worry you or is it a manageable risk factor?
This is a main concern. We need mechanisms to establish a more level playing field and stabilise the market so you have some earnings visibility, giving enough security to start those big investments.
There must also be requirements in terms of sustainability to make sure rare earths are produced to a certain standard of ESG (environmental, social and governance criteria).
China will still be a very important supplier of rare earths into the future but we need to ensure that all production is done in a responsible way. It's important to note that we're not only speaking about China when we talk about responsible mining. It's in all continents — there have been some bad examples historically and the mining industry needs to step up and show that we can do this in a sustainable way.
How can European producers of rare earth oxides and magnets compete with China?
We can guarantee a high ESG standard, and that we can contribute to establishing a compact value chain in Europe with a very low environmental footprint.
And customers must be better at asking questions when they're buying a new car — where do the minerals come from? We do that for most other products — we ask for responsibly sourced products in our food and clothing, so we need to do the same when we buy a new car or other products based on metals and minerals.
If there is this requirement from customers, then OEMS (original equipment manufacturers) will be willing to pay more for those input materials.
There's very high support for the Fen project both locally and at a national level — all the political parties in Norway are supporting this project. And that's mostly due to our sustainability approach with underground mining and knowing the processes will be done to the highest environmental standards.
Very often you hear ‘not in my back yard' but our story is that we are actually invited into the backyard.
