RER seeks more federal funds

Inflation is driving up the cost of a rare earth recovery and separation demonstration plant under construction in Upton, but Rare Element Resources still intends to begin operations on Sept. 1, regardless of whether it can obtain additional funding from the Department of Energy, President and CEO Ken Mushinski said in an email on July 2.

“All activities are moving us toward the goal of plant startup in the next few months,” Mushinski said in a July 1 RER news release. “With an operations manager in place and operations contractor selection underway, we are now starting to transition from design and construction to operations.”

Budgeting and operations

The company expects to hear by Sept. 1 whether the DOE will approve project team leader General Atomics’ updated plant construction and operations budget, as part of the DOE’s cost-share agreement, according to the release. General Atomics submitted a total project budget of about $53.6 million, which is about 21% higher than the $44 million original budget.

General Atomics, which tested and refined RER’s proprietary processing/separation technology, secured not only $4.4 million from the Wyoming Energy Authority but also $21.9 million from the U.S. Department of Energy for RER’s rare earth recovery and separation demonstration plant, according to a fact sheet the News Letter Journal received at a May 9 tour of the site.

“Updated estimates were included in the budget to address increased costs due to inflationary pressures on labor, equipment and consumables, as well as incorporating the optimized plant engineering and design parameters,” the news release said.

The release said that the increased cost is about the same amount as the inflationary index since the project began, and General Atomics asked the department to still honor the agreement that it would pay half of the costs, regardless of the increase.

Mushinski said in the email that inflation, based on the consumer price index, for the project’s design and construction phases has been about 21% overall, and some equipment and consumable costs have faced significantly more inflationary pressure.

“The DOE is aware of the extraordinary inflationary pressures that have occurred since the project budget was initially estimated in 2021, and we are hopeful the DOE will contribute further cost-share funds to offset the increased financial costs of the project,” he said in the news release.

However, RER is ready to cover the cost increases to make sure the plant can operate long enough to gain the information it needs to decide whether to ultimately commercialize the project, according to the news release. For any costs the department doesn’t cover in this increased budget — or any future budget adjustments — RER intends to use money it gained through the rights offering it made in March.

Mushinski said in the email that the company anticipates beginning operations on Sept. 1, regardless of whether DOE contributes more funding, but factors that could hypothetically cause delays include “timely receipt” of the department’s operations period budget or other license or permitting notices. Unexpected issues with logistics, equipment or weather could also cause delays, but the company would be able to deal with those and doesn’t currently expect them.

“While we focus on the important next steps, including confirming a final budget and schedule with the DOE, we are pleased with the efforts and dedication of our partners in this project, including their subcontractors, which have led to the progress achieved thus far, and we look forward to the timely commencement of operations,” he said in the news release.

Mushinski said in the email that the time frame for operations depends on overall operation success and budget. It is anticipated that the plant could operate for as long as a full year, but it possible that limitations of the sample could also affect the time frame.

“The time for operations of the demonstration plant is dependent upon the time it takes to achieve continuation operation, consistency of information coming from our proprietary process, and budget,” Mushinski said in an email on July 8. “This is not an exact amount of time.”

Considering current cost estimates, the team believes its budget will allow for up to one year of operations.”

Putting it together

General contractor Loenbro, of Gillette, has led the completion of utility systems upgrades and installation of exterior catchment and sediment control systems, according to the news release.

The site has received a rock crusher for processing the Bear Lodge material sample, which is about 700 tons, and the demonstration plant’s fire suppression system is also in place, Mushinski said in the email. The suppression system is there to meet industrial site code requirements.

“Carbon based combustible materials are what drives the need for fire suppression,” he said. “We take all preventative measures to prevent any fire, and (a) suppression system is one of them.”

Some work still remains, though, Mushinski said. Routine fit and finish work in the interior, and the final installation of modular office units are underway, and the company will be receiving chemicals, in dry form, that it needs for its operations. The chemicals will be mixed with water on-site and recycled.

The rest of the pre-assembled equipment skids, which started arriving in May, should be delivered and installed this summer, according to the news release. The company also needs to find an operations contractor, which is supposed to provide about 20 full-time, temporary, job-specific positions during operations. The News Letter Journal previously reported that Mushinski said the company would hire 25-30 people to work at the demonstration plant full-time, but that estimate is being revised as the project moves forward.

“As we proceed with engagement of our operations subcontractor, which is under way now, this number has been better defined by task and shift work,” Mushinski said in the July 8 email. “This is still an estimate, to be confirmed once our site leadership works with the subcontractor.”

Mushinski said in the email that the company is vetting contractors and plans to confirm its pick in July.

The company will have an event in August to provide the community with another status update, he said. Details will be announced.

“We appreciate the amazing community and state support of this important project as we move toward commencement of operations,” Mushinski said.