Vital Metals Redirects Canadian Rare Earths Stockpile Sale from China to Local Buyer

Vital Metals has decided against selling its stockpile of Canadian-mined rare earth elements to China. Instead, the Australian-owned company will sell its stockpile to the Saskatchewan Research Council (SRC) for $3 million. The new agreement, facilitated by Natural Resources Canada, underscores the strategic importance of keeping Canadian resources within the country.

Vital Metals, which operates part of the Nechalacho rare earths mine in the Northwest Territories, had previously planned to sell the stockpile to a subsidiary of Chinese rare earths company Shenghe Resources. This plan raised concerns due to China's dominant position in the global rare earths market and conflicted with Vital Metals' objective of becoming the lowest-cost producer of mixed rare earth oxide outside of China.

The federal government intervened to block the sale to Shenghe, aiming to bolster a domestic critical minerals supply chain. "This agreement highlights the strategic value and importance of the Nechalacho rare earths project and the prioritization of a rare earths value chain in Canada," said Geordie Mark, managing director and CEO of Vital Metals.

Tom Hoefer, senior adviser to the NWT Chamber of Mines, praised the government's intervention. "It reinforces their commitment to advance a strong critical mineral supply chain in the country and Western world, outside of China," Hoefer said.

SRC, Canada's second-largest research and technology organization, supports innovation and industrial commercialization for its clients. The sale to SRC, priced slightly higher than Shenghe's offer of $2.6 million, allows Vital Metals to further develop the Nechalacho Tardiff's rare earths deposit. This deposit is anticipated to be a long-life, large-scale project, with a scoping study planned to evaluate its potential size and scalability.

Despite previous plans to build a rare earths processing plant in Saskatoon, Vital Metals terminated the strategy after investing nearly $200 million. However, optimism remains high for the potential of the Tardiff deposit. Hoefer remains positive about the project, stating, "Vital has a good team doing the necessary and proper work to assess its geology and produce a scoping study this year."