Hexagon Energy Materials Ltd (ASX:HXG) is set to build on a transformative December quarter with development of a commercial demonstration plant for RapidSX™ rare earth separation to start early this year.
After entering into an option agreement during the quarter to commercialise RapidSX™ - an advanced downstream rare earth element separation technology - the company has been positioning itself to develop downstream businesses focused on high-value materials.
Negotiations are ongoing to secure potential commercial agreements with rare earth element (REE) producers and advanced project developers.
Quarter a turning point
Managing director Mike Rosenstreich said the December quarter was a strategic turning point for the company.
“We changed our company name to reflect a greater focus on commercialising downstream REE processing and advanced graphite materials.
“The board considers this to be the most direct pathway to early cashflow.
“We have also committed to funding the development of the RapidSX commercial demonstration plant (CDP) in Canada to separate REEs at costs that are potentially competitive with China."
In October 2019, the company announced its planned participation in a new REE processing joint venture with private Canadian company Innovation Metals Corp, which was subsequently approved by shareholders.
The objective is to commercialise RapidSX, a proven solvent extraction (SX) based technology to separate and purify REEs into commercial-grade rare earth oxides (REOs).
RapidSX has demonstrated lower capital and operating costs than conventional SX and is cost-competitive with Chinese separation plants.
Rosenstreich said: “The CDP is planned to be operating and financially self-sustaining in Q4 this year.
“The RapidSX CDP will enable existing and emerging producers to capture additional REE metal values on a highly competitive basis with China.
“This is a key disrupting and diversifying the global REE metal supply chain.”
Separation of REEs is a major pinch-point in the global REE supply chain with China dominating this critical downstream process.
REEs, like graphite, are a critical component of the e-mobility, renewable energy, consumer electronics and energy storage revolution.
These new and emerging industries are driving strong demand for rare earth permanent magnets and high-purity, specialty graphite products.
Hexagon intends to enable a fast-track to cash-flow operation initially based in North America.
CDP to process samples in Q4 2020
The company has been elected to begin the funding of the RapidSX CDP to ensure the plant is available to process customer’s samples in the December quarter of 2020.
Availability of the CDP is critical for customers to achieve financing and generate samples for REO offtakes.
The company is also working on commercialising its valuable IP on downstream graphite processing and pursuing opportunities to establish production in the US.
It has also completed work on its two upstream projects, McIntosh in Western Australia and Ceylon in Alabama, USA.
At McIntosh, Hexagon has regained 100% interest in the project tenements and plans to hold and undertake selective evaluation work in preparation for the rebalancing of the internal graphite concentrate supply-demand situation, forecast to occur in the coming years.