Hexagon Energy Materials (ASX: HXG) is confident it holds the key to disrupt China’s dominance in rare earth element (REE) processing with its RapidSX technology.
Perth-based Hexagon entered into a joint venture with Toronto-based Innovation Metals Corporation in October last year to earn a 49% interest in the downstream REE separation technology.
Then, mid-last month, the joint venture secured a deal with REE industry stalwart Ucore to evaluate the RapidSX processing technology’s capability in producing high-purity rare earth oxides (REO).
China dominates REE production – accounting for 80% of mine production worldwide. The country generated an estimated 132,000 tonnes of REO last year, compared to 26,000t from the US and 21,000t from Australia.
With REE essential to the rapidly growing electric vehicle and renewable energy sectors, China’s dominance has many countries looking to develop and source their own supplies of the critical minerals.
Hexagon’s managing director Michael Rosenstreich claims its RapidSX technology is set to be a “game-changer” for the company in shaking up the REE industry.
“The reality is China dominates this industry. I think [about 80%] of all rare earths come from China and they import materials to support their supply chain.”
“We’re really focused on downstream processes. We have two of those in action at the moment. One is around rare earth separation where we’re really looking to disrupt the monopoly that China has in terms of downstream rare earth processing and the second one is around graphite … largely around battery materials.”
The science of REE extraction
Mr Rosenstreich explained RapidSX isn’t about re-inventing the wheel but rather more about establishing low-cost processes to enable global mining companies to compete in today’s marketplace.
“The science of RapidSX is exactly the same as the chemistry and science of solvent extraction so we’re not talking about a new paradigm or a new unproven process, the chemistry is exactly the same,” he said.
“Secondly, this RapidSX process has been proven in a piloting phase, which has been funded by the US Department of Defense, so when you put that together we believe that RapidSX is now ready for a commercialisation step.”
“We’re not talking about R&D or any sort of exploration work. What we’re talking about is taking a proven low risk technology and commercialising it.”
Mr Rosenstreich pointed out the demand fuelling this type of technology for REE is growing at a rapid rate.
“In terms of electric vehicles, I think we’re making around 4.5 million EVs. In just five years’ time, that’s forecast to hit 40 million units.”
He added that’s part of the company’s strategy behind its joint venture with Innovation Metals.
“We think we’re in the right segment of the supply chain and that ourselves and our shareholders will benefit from participating in this renewable energy.”
Projects closer to home
While Hexagon is focused on REE extraction and on its North American venture, Mr Rosenstreich said he hasn’t taken his eye off the company’s two projects in regional Western Australia.
Hexagon owns the McIntosh project, which the company describes as a large-scale, high-quality flake graphite deposit located in the east Kimberley and also owns a gold deposit in Halls Creek nearby.
With global graphite prices taking a hit, Mr Rosenstreich said the McIntosh project is on the backburner for now.
“In time, as the graphite market improves, and it will … we’ll be positioned to harvest that opportunity.”