ASX-listed Ionic Rare Earths has through its US subsidiary entered into a joint venture (JV) term sheet with Missouri-based US Strategic Metals (USSM) for the construction of magnet recycling facilities.

In a move that supports the Trump administration’s efforts to secure US leadership in critical minerals and energy, Ionic USA and USSM have agreed on a non-binding basis to form a JV that plans to develop an integrated campus for the production of critical minerals and metals at USSM’s 1 800-acre (728.4 ha) site near Fredericktown, Missouri.

The proposed 50/50 JV aims to construct one or more magnet and other rare earth recycling facilities at the site, processing recycled permanent neodymium-iron-boron (NdFeB) and samarium-cobalt (SmCo) magnets and magnet scrap.

The proposed JV is also intended to evaluate recycling of other heavy rare earth elements such as terbium and yttrium.

Ionic's wholly owned Belfast subsidiary, Ionic Technologies, will contribute a non-exclusive licence to the proposed JV for its magnet recycling technology for the recycling of magnets and magnet scrap plus other heavy rare earth-containing compounds.

The JV will potentially be funded with $100-million for the construction of initial NdFeB and SmCo magnet recycling facilities, comprised of $95-million funding from USSM and a $5-million equity contribution split equally between Ionic USA and USSM. It is intended that any additional capital required will be funded by the proposed JV.

The proposed JV is conditional on a range of matters. These include entering into definitive agreements, each party making its capital contributions and a range of documentation and various other matters being agreed between the parties. Accordingly, there is no certainty that the matters contemplated by the term sheet will take effect.

The initial $5-million equity contribution will be used to complete front end engineering design for the facility and accelerate demonstration-scale magnet recycling at the site or other location agreed by the proposed JV.

The proposed JV is intended to be managed by a board comprised of three managers appointed by USSM and two by Ionic USA.

The partners intend for Ionic USA to chair a technical operations committee and hold primary responsibility for the proposed JV’s technical, operational, commercial and other matters. It is also intended that Ionic USA will be responsible for procuring feedstock for the JV.

Ionic MD Tim Harrison says the proposed JV will seek to provide Ionic with a practical and capital-efficient method of building rare earth magnet recycling capacity in the US.

“Magnet recycling is a fast and low-cost pathway to developing a secure, sovereign and sustainable rare earths supply chain. It is intended that the proposed JV will deliver on the capability already demonstrated at demonstration scale at Ionic Technologies in the UK to deliver a resilient supply of high purity, separated rare earth oxides for US industrial needs," he states.

In turn, USSM CEO and co-founder Stacy Hastie says USSM is focused on being a leader in the establishment of supply chains for critical minerals and heavy rare earths and this agreement is a major step forward towards achieving this vision.

Ionic continues to develop its flagship heavy rare earths project Makuutu in Uganda.

“Ionic has proven the capability of its rare earth permanent magnet recycling technology; now is the time to apply this on an industrial scale and we have the necessary, fully permitted site in Missouri to make this a reality.

“The US will not be left behind in the race to build the industries key to national security and our economic future. We look forward to moving this JV forward as quickly as possible, working with the US government, Ionic and other stakeholders," she states.