Ionic Rare Earths Secures £11M UK Government Backing for Revolutionary Rare Earth Supply Chain
Ionic Rare Earths (ASX: IXR) has achieved a significant milestone with its subsidiary Ionic Technologies leading a consortium that secured £11 million (A$22.6 million) in UK government funding to establish a first-of-kind rare earth permanent magnet (REPM) supply chain in the United Kingdom.
UK Government Throws Weight Behind Critical Minerals Security
The UK government-backed Advanced Propulsion Centre (APC) has awarded the "CirculaREEconomy" consortium substantial funding to create sovereign manufacturing capability for rare earth elements (REEs), highlighting their growing importance to national security and clean energy transition.
The three-year project will establish novel supply chains for rare earth permanent magnets essential for electric vehicles, which require high-purity (99.5%) separated rare earth oxides (REOs). The funding demonstrates direct alignment with the UK's DRIVE35 program, which aims to transform the country's automotive sector and advance electric drivetrain technology.
"This hugely welcome support from the APC allows us to continue our work with supply chain partners as we build a sovereign and sustainable UK-based rare earth permanent magnet supply chain," said Tim Harrison, IonicRE Managing Director.
Star-Studded Consortium of Industry Leaders
The Ionic Rare Earths rare earth magnet project brings together an impressive array of automotive and technology partners:
| Consortium Member | Role |
|---|---|
| Ionic Technologies | Project leader, world-leading REE recycler and magnet REO producer |
| Ford Technologies | Major automotive manufacturer with UK R&D complex |
| Bentley Motors | Premium car brand (Volkswagen Group) targeting full electrification |
| Wrightbus | Leading European bus manufacturer focusing on electric and hydrogen buses |
| Less Common Metals (LCM) | Advanced REE metal and alloy manufacturer |
| European Metals Recycling (EMR) | Global leader in sustainable materials recycling |
| British Geological Survey (BGS) | UK's premier provider of geoscientific data and critical minerals expertise |
| Vacuumschmelze (VAC) | European REPM manufacturer (subcontractor) |
| GKN Powder Metallurgy | European REPM manufacturer (subcontractor) |
IonicRE's direct allocation as part of the overall program will be approximately £3.1 million (A$6.4 million) over the three-year period.
A Circular Economy Solution for Critical Minerals
The CirculaREEconomy project addresses a critical vulnerability in Western supply chains. China currently dominates global rare earth production, with recent export restrictions highlighting the risks of dependence on a single source.
"With the export of REPMs from China effectively turned off in April, the customer base has felt first-hand the risk of complete dependence on a monopolistic supply chain," noted Harrison.
The Ionic Rare Earths rare earth magnet project creates a true circular economy for rare earths:
- EMR will develop efficient routes to recover critical materials from motors
- Ionic Technologies will process this material into separated REOs using proprietary hydrometallurgical recycling
- LCM will receive REOs and optimise processes for metal making and alloy manufacturing
- European manufacturers VAC and GKN will produce magnets to OEM specifications
- Ford, Bentley and Wrightbus will deploy and test the magnets in their vehicles
This circular approach has demonstrated significant environmental benefits, with a peer-reviewed Product Carbon Footprint Study showing emission reductions of up to 61% compared to traditional REO supply chains from primary mining sources.
Understanding Rare Earth Permanent Magnets
Rare earth permanent magnets (REPMs) are essential components in modern electric vehicles, wind turbines, and defence applications. They contain elements like neodymium, praseodymium, dysprosium, and terbium that create exceptionally strong magnetic fields relative to their size.
These magnets enable the production of smaller, lighter, and more efficient electric motors – critical for the performance of electric vehicles. However, securing a stable supply has become increasingly challenging due to geopolitical tensions and China's dominance of the global supply chain.
The Ionic Rare Earths rare earth magnet project addresses this vulnerability by creating a sovereign UK capability to produce these materials from recycled sources, reducing dependence on imports which currently account for around 90% of the UK's rare earth metals.
Future Growth and Timeline
IonicRE's strategy extends beyond the UK, with plans to develop multiple magnet recycling plants in the US and Brazil in addition to its established Belfast Demonstration Plant.
"We are taking small steps but very quickly with an extremely lean but fast-paced expansion strategy. By prudently deploying capital and resources, as well as securing non-dilutive government funding, IonicRE is hyperscaling our global magnet recycling business and maximising shareholder returns," outlined Executive Chairman Brett Lynch.
The project will officially commence on August 1, 2025, with IonicRE continuing to engage with the APC regarding additional capital grant funding that could cornerstone the development of a planned commercial plant in Belfast Harbour.
Why Investors Should Watch Ionic Rare Earths
This funding represents a significant vote of confidence in the Ionic Rare Earths rare earth magnet project technology and business model. The company has positioned itself at the nexus of several powerful trends:
- Critical mineral security becoming a national priority for Western governments
- Circular economy solutions gaining favour over traditional mining
- Electric vehicle growth driving demand for rare earth magnets
- Government funding support reducing capital requirements and dilution
With China's April announcement of additional export restrictions on medium and heavy rare earths resulting in a substantial increase in inquiries for Ionic Technologies' capabilities, the company is well-positioned to capitalise on growing market demand for secure, sustainable rare earth supplies.
The combination of government backing, industry partnerships with major automotive manufacturers, and proprietary technology creates a compelling investment case for a company at the forefront of solving one of the clean energy transition's most pressing supply chain challenges. Furthermore, this development comes at a time when rare earth consortiums and strategic partnerships are becoming increasingly important globally.
In addition to IonicRE's progress, other companies like Vital Metals are securing funding to advance their rare earth projects, while explorers such as Askari Metals make high-grade discoveries in related critical minerals. However, the potential for growth extends beyond rare earths, with other critical minerals like lithium and caesium showing promising grades in various global projects.
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