Ionic Rare Earths (ASX:IXR) - Low-Cost, High-Margin Magnet Recycling Play

Interview with Tim Harrison, Managing Director of Ionic Rare Earths

Our previous interview: https://www.cruxinvestor.com/posts/ionic-rare-earths-asxixr-belfasts-green-revolution-economic-transformation-5773

Recording date: 19th November 2024

Ionic Rare Earths (ASX:IXR) offers investors an attractive opportunity to gain exposure to the rapidly growing market for magnet rare earths through its innovative recycling technology. The company's proposed plant in Belfast aims to produce 400 tonnes per annum of neodymium, praseodymium, dysprosium and terbium oxide from end-of-life magnets and swarf, supplying critical materials for EVs and wind turbines.

The project boasts outstanding economics, with a feasibility study indicating a $109M capex, 44% post-tax IRR, and $2.1B in revenue over a 20-year life. With a modular design, the facility can be rapidly scaled up to meet demand and replicated in other markets to optimize logistics.

Ionic's magnet recycling process is well-timed to fill a key gap in rare earth supply chains. Demand for neodymium and praseodymium is set to surge as the shift to EVs accelerates, while geopolitical tensions and ESG concerns constrain new primary supply. Recycling offers a sustainable, secure alternative, and Ionic is at the forefront of making it economically viable.

The company has been engaging closely with the UK government, which is highly supportive of establishing a domestic magnet rare earths supply to protect jobs in the automotive and renewable energy sectors. Ionic is in advanced discussions for a grant to cornerstone the project financing, which could significantly enhance returns.

In parallel, Ionic is advancing discussions with key partners across the magnet value chain. Agreements with the likes of offshore wind operators and automotive OEMs to secure feedstock and offtake would significantly de-risk the project. The company aims to finalize these partnerships in the coming months.

With an experienced management team, strong government backing, and robust project economics, Ionic Rare Earths is well positioned to become a leading supplier of sustainable magnet materials for the energy transition. As the first mover in commercial-scale magnet recycling, the company offers investors a differentiated growth story in the critical materials space.

View Ionic Rare Earths' company profile: https://www.cruxinvestor.com/companies/ionic-rare-earths-ltd

Sign up for Crux Investor: https://cruxinvestor.com