----Interview with Ramón Barúa
CEO
Aclara Resources Inc.
Aclara Resources Inc. focuses on developing its heavy rare earth projects in Brazil and Chile and aims to become a strategic, non-China-based supplier of critical rare earth elements, primarily dysprosium oxide, terbium oxide, and PrNd oxide. The company plans to begin production in 2027 and will produce 1,350 tons of PrNd oxide, 163 tons of dysprosium oxide, and 28 tons of terbium oxide annually at its facility in Brazil. The mine life in Brazil is projected to be 22 years, while the Chilean project has a mine life of 14 years. In Chile, Aclara aims to produce 125 tons of PrNd, 44 tons of dysprosium oxide, and 6 tons of terbium oxide annually.
Asian Metal: Welcome, Ramón, and thank you for accepting our interview. Please start by introducing your company and its main business.
Ramón: It’s always a pleasure to speak with Asian Metal. Thank you for the opportunity. I’m the CEO of Aclara Resources, which has two ionic clay projects, one in Brazil and one in Chile. Our goal is to produce a mixed rare earth carbonate with a high content of heavy rare earth elements. Additionally, Aclara is working on separating the carbonate into individual rare earth oxides and producing alloys for permanent magnets.
Asian Metal: Please share your production plans for the next 3-5 years.
Ramón: Our largest project is in Brazil, called Carina, which we expect to be in production as early as 2027. We have already signed a strategic agreement with the government, which is supporting us in expediting construction. At Carina, we plan to produce an MREC with 3.4% dysprosium, 0.6% terbium, and 28.5% PrNd. This high-grade content will allow us to produce 163 tons of dysprosium oxide, 28 tons of terbium oxide, and 1,350 tons of PrNd oxide annually for 22 years. Our project in Chile, Penco, is also expected to start production in 2027. However, it’s smaller in scale, with annual production targets of 44 tons of dysprosium oxide, 6 tons of terbium oxide, and 125 tons of PrNd oxide over a 14-year mine life. In addition, we’re developing a solvent extraction facility to convert mixed rare earth carbonates into individual oxides, and we’re working on technology to produce high-performance alloys for permanent magnets.
Asian Metal: What do you see as the biggest challenge in developing a rare earth project outside of China?
Ramón: The primary challenge is being cost-competitive. China has a very low-cost production base, and in countries like Chile and Brazil, it's not possible to obtain licenses for in-situ leaching. As a result, our process is more elaborate and requires a higher investment. However, we believe that customers will recognize our high environmental standards and are willing to pay a premium for that. As a reference, the average cost of our mixed rare earth carbonate is USD 28 per kilogram.
Asian Metal: Which applications do you see as the most important downstream industries for PrNd oxide, dysprosium oxide, and terbium oxide?
Ramón: Currently, electric vehicles (EVs) are the main application for these rare earths. Although the permanent magnet market is still dominated by other industries, EVs represent around 25% of it today, and we believe this will grow to approximately 70% of total demand in the future. In 2023, more than 14.2 million vehicles using permanent magnets were sold, including plug-in hybrids and battery electric vehicles, consuming roughly 28,500 tons of magnets. Wind turbines are also a significant application, and we expect new sources of demand to emerge in the near future, such as electric boats, trains, larger drones, and other e-mobility applications. The robotics sector, which requires substantial quantities of magnets, is also expected to experience rapid growth in the coming years.
Asian Metal: The global EV sales volume in 2023 reached 13.69 million, a sharp increase of about 35% year-on-year. How do you see the EV industry in South America over the past year?
Ramón: The EV industry in South America is just starting to take off, but there is significant interest due to growing concerns about climate change. In Brazil, the market is expanding rapidly thanks to the introduction of Chinese-made EVs. BYD’s efforts in Brazil are quite impressive. The charging infrastructure is still in its early stages but is likely to grow rapidly in the coming years.
Asian Metal: In the context of a sluggish global economy, how do you predict global EV sales in 2024?
Ramón: According to some industry forecasts, global EV sales could reach around 18 million vehicles in 2024, representing a growth of approximately 25%. This is the projection we are working with.
Asian Metal: What’s your outlook for the EV industry over the next 2-3 years?
Ramón: I predict that the EV market will continue to grow rapidly, at a rate of around 15-20% per year. The new generation of consumers is highly climate-conscious, and the experience of driving an EV is fantastic. The acceleration due to rare earth-powered motors, the smooth ride, the quiet operation, the high-tech interactive screens, and the low maintenance are all appealing attributes. Additionally, regulatory pressures in many important countries are pushing the development of the EV market to meet environmental goals. China, in particular, is fully committed to this transformation and is leading the world in EV production.
Asian Metal: Do you think EV manufacturers will reduce magnet consumption in the coming years to cut production costs?
Ramón: I don’t believe magnets are expensive compared to the overall value they provide to EVs. The cost of permanent magnets is relatively small compared to the total cost of a vehicle, but the performance benefits are significant. In fact, I believe automakers are willing to pay more for permanent magnets because they are crucial to key vehicle attributes like acceleration, range, and battery efficiency.
Asian Metal: How do you foresee the global supply and demand dynamics for PrNd oxide and dysprosium oxide over the next 2-3 years?
Ramón: In the short term, demand will be closely linked to growth in the EV and wind turbine sectors. On the supply side, I expect it to become increasingly difficult to source rare earths, especially heavy rare earths. Quotas for heavy rare earths have remained stable for several years, and much of the supply has been coming from Myanmar to meet the gap in demand. There aren’t many new projects outside this region, particularly for ionic clays, so I don’t foresee a significant increase in heavy rare earths supply in the future.
Asian Metal: Prices for PrNd oxide and dysprosium oxide declined in Q1 of 2024 but rebounded in Q2 and August before dropping again in September, hovering around USD56.0-58.0/kg for PrNd oxide and USD230-235/kg for dysprosium oxide, down 7% and 37%, respectively, from early this year. What is your price forecast for these products in 2025?
Ramón: I expect PrNd oxide prices to be higher in 2025 than they are today because miners are not making profits at current price levels. If prices reach USD 100-150/kg, we could see more supply from projects around the world. Regarding dysprosium oxide, I anticipate significant shortages because supply is not keeping up with demand. While China’s production is easier to predict, it’s more difficult to estimate supply from Myanmar. However, I believe dysprosium oxide prices will rise significantly in the near future, which is why we are investing heavily in new heavy rare earths supply. We expect dysprosium prices could even double or triple from current levels if demand continues to grow.
Asian Metal: Thank you for your insightful sharing, Ramón. We wish your company continued success!
Ramón: Thank you very much for the opportunity to present Aclara and share our views on the market. All the best!
