Can Ucore be a U.S. Response to China's Monopoly?

China has a firm economic grip on us. This is because, not only for the extraction of rare earth elements, but also for their processing, there are hardly any alternatives to the Middle Kingdom. With a demonstration facility showcasing cutting-edge technology for separating light and heavy rare earth elements, the American company Ucore Rare Metals is taking a significant step toward changing this. In addition to China’s recent export halt on Gallium and Germanium, the possibility of restricting the export of rare earth element processing technologies to the West has also been hinted at.

Ucore’s demonstration facility in Kingston, Ontario, is reportedly one of the largest rare earth element separation facilities in North America. These critical raw materials are also used in many military applications. The U.S. Department of Defense has invested 4 million dollars in the facility to assess the performance of the RapidSX-REE separation technology. According to Ucore, this technology offers a clean and competitive alternative to other methods. For comparative purposes, the facility extracts light and heavy rare earth elements from its source material, while simultaneously processing ores using a 52-step conventional method. The new process separates the ores faster and utilizes fewer chemicals in the process.

The goal is to commercialize the RapidSX-REE technology in multiple facilities across North America. This would also provide Europe with another opportunity to refine rare earth elements. A project outside of China is already underway in Norway, where the currently “greenest” rare earth elements are being produced. Malaysia also has a refinery outside of China, although there is still work to be done to meet the country’s stringent environmental regulations.

In general, China’s monopoly on rare earth element processing will not last forever. However, it will take significantly more time for the West to establish its own refineries compared to opening new mines. The U.S. and Europe can produce rare earth elements more cleanly than China, which makes the resources about 20-30 percent more expensive. For investors, this presents attractive opportunities for positive returns, which are also tax-free.