The NWT’s Nechalacho rare earth minerals mine has secured its first major customer, its developer reported on Monday.
Vital Metals says it has an agreement in principle to sell raw material from the mine, 100 km east of Yellowknife, to Norwegian company Reetec AS.
The deal is set to be finalized by the end of January.
Nechalacho is expected to begin operations later in 2021. Minerals found at the mine are used in products like the magnets in motors that power electric vehicles.
Construction of an ice road to the mine will start shortly, a spokesperson said, and Vital subsidiary Cheetah Resources intends to open an expanded Yellowknife office in February.
Geoff Atkins, the company’s managing director, last year told Cabin Radio he intends to create “a small-scale demonstration plant” at Nechalacho before the project eventually grows.
The Nechalacho project had been inactive for years thanks to a previously quiet market for rare earth elements. In 2015, for example, some prices fell by as much as 50 percent – meaning almost no work took place at Nechalacho in 2016 and 2017.
Avalon Advanced Materials subsequently sold its Nechalacho near-surface mineral rights to Cheetah Resources, which is now entirely owned by Vital Metals.
The value of the Reetec deal was not reported. It ultimately envisages Nechalacho supplying Reetec with 1,000 tonnes of material per year for five years.
By email on Sunday, Cheetah vice-president David Connelly said the agreement with Reetec marked “Canada’s and the NWT’s first sale and export of rare earth products, an essential enabler of the clean-tech and the green economy.”
Securing Reetec as a customer, Connelly said, “substantially reduces the risks to the project.”
Nechalacho is expected to create several dozen jobs in its initial stages. Cheetah is currently hiring staff for its expanded Yellowknife office.