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Pensana picks Humber for UK rare earths facility

Saltend Chemicals Park wins out over other north of England options, although planning is at an early stage
Pensana picks Humber for UK rare earths facility
  • Rare earth mining hopeful says Saltend Chemical Park is best option for UK processing plant 
  • Funding confirmation still needed for Angolan mine that would supply the plant
IC TIP: Hold

Pensana Rare Earths (PRE) has chosen a Humberside industrial park for a rare earths processing facility that could supply the renewables and electric vehicle (EV) industries in the UK. The prospective miner still needs to complete financing for its rare earths project in Angola, but said construction at the Saltend Chemicals Park plant could be done alongside the Longonjo mine. Saltend is already home to BP (BP.) and Ineos processing plants, among others. 

Pensana hired Wood Group (WG) in October to complete a scoping study into a UK plant that would turn the concentrate produced in Angola into a precursor product for rare earth magnets. The study will be finished in January. Pensana chairman Paul Atherley said a UK plant could mean greater home grown renewables construction capacity. 

“The Saltend facility has the potential to become a world class producer of rare earth oxides and to help establish a sustainable supply chain for the manufacture of powerful permanent magnets critical for the offshore wind and electric vehicle industries in the UK and Europe,” he said. 

He told Investors Chronicle last month Pensana was still considering its mine funding source. The company has signed a heads of agreement with the China Great Wall Industry Corporation for the $200m bill for the mine. 

“Is there then the possibility that China or the Chinese have some form of control over where the rare earths go? That's where we are, as a company, where we've got to be very careful and see whether we want to go down that track,” Mr Atherley said. 

Production of rare earths is limited outside China, while demand is forecast to grow as wind turbine and EV production climb. 

Mkango Resources (MKA) is also studying a UK or mainland Europe plant to process its Malawi-sourced rare earths, but is further back in the development process. 

Pensana listed in London in July, adding to its Australian listing, and is trading at more than double its 27p listing price. The shares were up 5 per cent on Monday following the Humber news, to 72p. 

Pensana still has a few questions to answer before starting construction at Longonjo, so we are staying on the sidelines for now. Hold.