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Exactly one year ago, Prime Minister Justin Trudeau was in Saskatoon, visiting Vital Metals and touting the company as the first in Canada to begin processing rare earth minerals.
“There’s work to be done on encouraging the government of Saskatchewan to see the opportunities that companies and indeed workers are seeing in cleaner jobs (and) the opportunities for cleaner energy projects,” Trudeau said at the event.
A few months later, Vital Metals, an Australian-based company, announced a pause in construction due to rising costs.
Rare earth minerals are elements used in smartphones, TVs, computers, electric car batteries, and new-generation light bulbs.
According to comments made by Trade and Export Minister Jeremy Harrison in April 2023, China has a monopoly on rare earth mineral production, and the communist party aims to prevent other markets from succeeding.
Still, he believed the company could find success in Saskatchewan.
“We really wish the company the very best, and I have full confidence that they’re going to be able to move forward with the project,” Harrison said.
In September 2022, PrairiesCan Minister Dan Vandal announced a $5 million interest-free, repayable loan to the company under the Jobs and Growth Fund to help with equipment installation and other costs.
But by September 2023, Vital Metals was heading for bankruptcy, with MNP eventually taking over insolvency matters. All assets, including brand-new mining and processing equipment, went on the auction block on Dec. 24, 2023, and sold to a host of international buyers, according to McDougall Auctioneers‘ Dan Degagne.
Vital Metal’s non-executive chairman Richard Crookes said the company will focus on developing its existing rare earth mineral deposit in the Northwest Territories. Photo courtesy Finance News Network, Australia.
In an interview dated Sept. 29, 2023, with Financial News Network, Vital Metal’s non-executive chairman Richard Crookes confirms that the Saskatoon facility was no longer viable.
“We’d been conducting a strategic review of our Saskatoon processing facility, and that commenced in April and concluded in mid-July. In summary, we’ve demonstrated, really, that the Saskatoon facility doesn’t make economic sense to operate,” he said.
“So, we’ve decided to terminate that facility,” he added.
Costs, according to the company, tripled to at least $60 million.
Assets sent to auction
The auctioneers note on McDougall’s website reads:
Vital Metals was the only purpose-built rare earth mineral processing facility in Canada. It contains electrical, mechanical and instrumentation equipment and components which specialize in: Calcination, Radium Removal, Element Precipitation, Leaching, Gravity Separation and Ore Receiving.
“It’s been quite a busy three and a half, four weeks dealing with guys from all over the world,” said Dan Degagne as the online auction closed last Friday.
“Touring people through the facility from Bulgaria, from Tangiers… (they’re) mostly from mining companies, uranium companies, and then of course a lot of rare earth mining companies. They’re interested in all the big equipment, for sure.”
Degagne said most of the equipment for auction was brand new and sold for pennies on the dollar. Successful bidders have until the end of January to claim their purchases.
“People have to pay to dismantle it and to ship it, so there’s going to be a lot of costs there,” said Degagne.
A statement from Vandal’s office late last week confirmed the federal government was aware that Vital Metals was no longer economically viable.
“PrairiesCan is a creditor and is pursuing all reasonable avenues of collection, including seeking amounts that may be recovered in bankruptcy,” the statement read.
A statement from Harrison’s office said the Vital Metal’s project looked “at a very specific intermediate product,” and that would not prevent provincial investment into its own Saskatchewan Research Council rare earth processing facility where construction remains on time and on budget.
The future of rare earth mineral production
Samples at the newly-built Saskatchewan Research Council mining and mineral facility in Saskatoon. (Saskatchewan Research Council/Submitted)
Still, federal and provincial governments said building a rare earth mineral processing facility remains a priority, because Saskatchewan is rich in potash, uranium, lithium and helium deposits.
“These critical minerals create business and job opportunities in the province. That’s why the green economy — enabling success in a net zero future — is one of PrairieCan’s strategic priorities,” said Vandal.
“SRC and Saskatchewan have a goal to establish a rare earth element hub here in Saskatchewan, forming an industry model for future commercial REE initiatives and supply chain development. As part of this, we want to see the industry here succeed,” said the SRC.
Crookes said Vital Metals is moving its operation out of Saskatchewan and will focus on developing its existing rare earth mineral deposit in the Northwest Territories.
