December 23, 2019 / 2:08 PM / a month ago

UCore, Materion team up to apply for U.S. military rare earths funding

(Reuters) - Rare earths miner UCore Rare Metals Inc and manufacturer Materion Corp said on Monday they will form a consortium to jointly apply for U.S. military funding of a rare earths processing plant.

Reuters reported earlier this month that the U.S. Department of Defense plans to fund construction of rare earths processing facilities, part of a push by Washington to ensure its military has adequate supply of the minerals used to make weapons and electronics.

The Pentagon plans to pick one or more winners to receive funding to build a pilot plant to process so-called heavy rare earths, a less-common type of the specialized minerals used in weaponry.

UCore and Materion are effectively betting that by merging their areas of expertise, their application will be more appealing to the Pentagon.

“We believe that the combination of our experience and breadth of knowledge presents a winning opportunity,” said Lawrence Ryczek, Materion’s vice president of aerospace and defense.

Texas Mineral Resources Corp and a joint venture between Australia’s Lynas Corp and privately held Blue Line Corp of Texas also plan to apply. Lynas and Blue Line earlier this year announced their partnership, one that served as a model for UCore and Materion’s consortium.

“We were looking for something that would put us directly in the same league as Lynas with this value proposition, and we’ve done that,” said Jim McKenzie, chief executive of UCore, which is developing a rare earths mine in Alaska.

The U.S. military’s request does not give a specific financial amount for the award, though it is derived in part from the Defense Production Act (DPA), a 1950s-era U.S. law that gives the Pentagon wide financial latitude to procure equipment necessary for the national defense.

Beyond finances, whomever is chosen is expected to receive a large public relations boost and become recognized in the rare earths industry as one capable of meeting the U.S. military’s high standards.

The deadline to apply is Monday.

Materion has previously received financial support from the U.S. military to produce beryllium, a mineral used as a hardening agent for weapons. The beryllium production process has similarities to rare earths processing.

“We have a track record of taking a concept on paper, meeting the requirements of the (U.S.) military and taking the project to fruition,” said Materion’s Ryczek.

“There’s no reason why we can’t help the (U.S.) rare earths supply chain be successful as well.”

Reporting by Ernest Scheyder; Editing by Sandra Maler

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