N.W.T. rare earth mine owner halts construction of processing plant citing depressed market
CBC
Mere months after a visit from Prime Minister Justin Trudeau promoting the importance of critical minerals, Canada's only rare earth mineral mining project is stopping the construction of its processing plant in Saskatchewan.
In a recent news release, Vital Metals, owner of the N.W.T.'s Nechalacho mine project, said the current scale of operations at its North T pit "will not achieve positive cash flow from the project."
Now the company is looking for new funding sources and partners "to potentially build a sustainable business model for the Saskatoon business."
Despite pausing construction, the company says it is retaining its workforce in Saskatoon.
Initial estimates put the plant's total cost at $20 million. But last December, the company said the new price tag was $60 million. It attributed the increase to doubling the plant's capacity, "execution challenges, scoping changes and industry inflation."
Vital Metals has already spent nearly $19.7 million on the plant and says it is about 50 per cent complete.
The company had planned to build part of the facility that would allow it to sell an "intermediate product to generate revenue ahead of completing the balance of the facility." But it was unable to find a buyer "on commercially satisfactory terms."
Richard Crookes, Vital Metals' interim chairperson, said there was "a lack of immediate market for our product and lower rare earth prices."
The Nechalacho mine project sits near Thor Lake, about 100 kilometres south-east of Yellowknife.
Tom Hoefer, the executive director of the NWT and Nunavut Chamber of Mines, says he was surprised to hear of low prices.
"In this world of frantic search and production of critical minerals, I would have thought everything would be high, but of course markets are always going up and down," he said.
Vital Minerals' stock price has also dropped about 80 per cent over the past year, from $0.70 to $0.012 per share.
It's not clear whether current operations have stopped at the mine site.
N.W.T. representatives for Vital Metals referred CBC to its Australian office. A request for comment was not returned.
