Uganda grants ASX-listed Ionic licence to mine rare earths

Australia’s Ionic Rare Earths (ASX: IXR) said on Thursday the government of Uganda had granted it a mining licence for the Makuutu heavy rare earths project in the East Africa nation.

The permit, the first large-scale mining licence awarded in Uganda, allows Ionic to engage in supply chain and offtake discussions. It also paves the way for the company to make a final investment decision, expected for later this year, with first production in 2026.

Located about 40 km east of the regional centre of Jinja and 120 km east of the capital city Kampala, the Makuutu project comprises six licences. The asset hosts heavy rare earth oxides (HREO), which Ionic says are easily extracted by applying rudimentary mining and processing methods.

Ionic Technologies International, a 100% owned U.K. subsidiary acquired in 2022, has developed processes for the separation and recovery of rare earths from mining ore concentrates and recycled permanent magnets. The unit is focusing on the commercialization of the technology, with a demonstration plant at Makuutu on track for production this quarter.

The Ugandan Directorate of Geological Survey and Mines (DGSM) had previously backed the project.

“The formal award of the mining licence in Uganda reinforces the Makuutu Heavy Rare Earth Project as one of the world’s largest and most advanced development-ready heavy rare earth element assets,” Managing Director, Tim Harrison, said in a statement.

“Progress continues to be made at Makuutu’s Demonstration Plant, which will also be critical in de-risking the commercialization of the project through the production of value added, mixed rare earth carbonate (MREC) for our partners to qualify and validate,” Harrison said.

The announcement comes after the company increased in December its stake in Rwenzori Rare Metals, owner of the project, from 60% to 94%. The company is also in talks with holders of the remaining 6% ownership.

Ionic Rare Earths expects the mine to run for a minimum of 35 years, producing a 71% rich magnet and heavy rare earth carbonate (MREC) product basket, but said the asset presents significant potential and scale up through additional tenements. 

Shares in Ionic trade at A2.2¢, giving the company a market capitalization of A$103.6 million.