Aclara Resources to start rare earths production in Brazil in 2027

Rare earths developer Aclara Resources (TSX: ARA) plans to apply for a crucial environmental permit early next year for its flagship rare earth project in Brazil, with the goal of starting production in 2027—two years ahead of the initial schedule.

The company said the Carina deposit, in the state of Goiás, could generate 191 tonnes a year of dysprosium and terbium which are heavy rare earths used in electric vehicle (EV) manufacturing.

Aclara, which updated this week the preliminary economic analysis for regolith-hosted ion adsorption clay project, now pegs the project’s net present value at US$1.5 billion, using an 8% discount rate, and an internal rate of return of 27% over the 22-year mine life.

Initial capital costs are estimated at US$593 million, with low sustaining costs of US$86 million. The project is forecast to generate US$505 million in annual net revenue and US$366 million in earnings before interest, taxes, depreciation and amortization.

CEO Ramón Barua told Reuters that, that once in operations, Carina’s production would represent about 13% of China’s 2023 output for these materials.

Local agreements

The Toronto-based company, with offices in Chile and Brazil, is progressing faster than expected on the Carina project, originally slated for production in 2029. Aclara has gained momentum mostly thanks to agreements with both state and local governments to expedite the permitting process.

If the necessary approvals are granted within 18 months, as anticipated, production could begin as early as 2027, or possibly in 2028, Barua said in the interview with Reuters.

Aclara’s extraction process reduces its environmental impact by eliminating the need for explosives and milling. The company recycles 95% of its water and uses common fertilizers, leaving no liquid waste that would require tailings dams.

For the rest of the year and next, Aclara plans to conduct additional drilling and metallurgical studies to support a pre-feasibility study and the construction of a pilot plant.

Hotspot Brazil

Brazil, which holds the world’s third-largest rare earth reserves, is becoming a hotspot for early-stage projects as Western nations seek to reduce their dependence on China for critical elements in the supply chain.

In addition to the Carina project, Aclara is also pursuing environmental approvals for a smaller deposit in Chile, known as Penco, which is expected to follow a similar 18-month approval timeline.

Located in the southern Bío-Bío region, Penco is backed by Chilean conglomerate CAP SA and covers a 6-sq.-km area hosting an ionic clay deposit rich in heavy rare earths. Measured and indicated resources total 27.5 million tonnes, grading 2,292 parts per million total rare earth oxides (TREO), for 62,900 tonnes of contained TREO.

The planned project doesn’t have a tailings facility for waste. After processing, Aclara plans to place washed clays into deposition zones and revegetate them.

Shares in Aclara Resources were unchanged on Friday in Toronto at 52¢ apiece, valuing the company at $86.6 million. They’ve traded in a 52-week range of 36¢ to 65¢.