Rare earth minerals from the Northwest Territories will be used in electric vehicle motors manufactured in Germany.
A deal announced last week will take minerals from the Nechalacho mine, east of Yellowknife, to a Saskatoon extraction facility, then a Norwegian supplier, and ultimately German auto parts firm Schaeffler.
Schaeffler’s products are used in vehicles made by the likes of Volkswagen, GM and Honda, Reuters reported.
The agreement gives Nechalacho’s raw material, mined for the first time in the summer of 2021, a named end-user. Schaeffler will begin receiving processed material from the mine, via Norwegian firm Reetec AS, in 2024.
Vital Metals, Nechalacho’s owner, used the deal as an example of the mine’s value as companies try to source rare earth minerals from anywhere that isn’t China. Europe and North America are each trying to reduce their reliance on Chinese mining, which currently accounts for almost all of the rare earths market.
While at least one US auto manufacturer has agreed to source its rare earths domestically, Reuters reported, this is the first such publicized deal in Europe that avoids the Chinese supply chain.
“Reetec’s agreement with Schaeffler has validated the quality of Vital’s product and demonstrated the need for EV makers and parts suppliers to have access to a transparent rare earth supply chain that a company such as Vital could provide,” Vital Metals managing director Geoff Atkins said in a news release.
“We have always been confident that our product would be in demand and this agreement secured by Reetec demonstrates the appetite for our product in Europe. The agreement between Reetec and Schaeffler is the first of its kind but we expect many similar announcements to follow.”
Vital is Canada’s first rare earths producer. Its Saskatoon extraction plant, which uses raw material delivered from Nechalacho, doesn’t enter operation until June. Even before the plant comes online, Vital says it is now studying “expanded production scenarios to capture the expected increase in demand from European and US car manufacturers and other customers as the EV revolution continues to increase.”
Tom Hoefer, executive director of the NWT’s chamber of mines, last week told the CBC rare earths mining was making the territory “a player in a big world.”
“Just like diamonds catapulted us into the global diamond field, this is going to push us way out into global recognition of rare earths,” Hoefer told the broadcaster.
Canada’s latest federal budget included $3.8 billion dedicated toward development of a strategy for what Ottawa calls critical minerals – 31 minerals considered important to the country’s economic success and national security.
Rare earths are among them, and last week the federal transport minister travelled to Yellowknife to pledge more critical minerals support, including potential public-private partnerships.
In a news release, the federal government said it would work “closely with affected Indigenous groups to contribute to the development of a domestic zero-emissions vehicle chain.”