The company has put one of its two Canadian subsidiaries into bankruptcy to funnel efforts on developing an additional mining project.
Australian mining company Vital Metals announced that it assigned its Canadian subsidiary, Vital Metals Canada Limited (VMCL), into bankruptcy. VMCL has been constructing a rare earths processing facility in Saskatoon, in the western Canadian province of Saskatchewan, since 2021. However, work was halted in April 2023 as sales of the intermediate products were projected not to be economically viable.
In a press release (PDF), the company now announced scrapping the project entirely and focusing on its second Canadian subsidiary, Cheetah Resources Corporation, which operates the Nechalacho mine, 110 kilometers southeast of Yellowknife, the capital of the Northwest Territories. Cheetah will be unaffected by VMCL’s bankruptcy, according to the company.
Termination of Processing Facility in Favor of Increased Mining Efforts
The company further substantiated its decision in a video published on its YouTube channel (Video). Richard Crookes, Vital’s interim non-executive chairman, said the “Saskatoon facility doesn’t make economic sense for us to operate, so we’ve decided to terminate that facility.” The company aims to develop the larger Tardiff deposit in the Nechalacho mine, separate from the deposit mined since the summer of 2021. Successful mining of Tardiff would expand Nechalacho into a larger-scale and longer-life rare earths project. Despite VMCL’s bankruptcy, Vital’s rare earths mining ventures in Canada will thus continue.
Mining and Processing of Rare Earths are Separate Stories
While new rare earth mining projects are announced steadily worldwide, such as the first rare earths mine in the U.S. in 70 years greenlit earlier this year, China’s dominance of the processing sector is seemingly more difficult to contest. While the People’s Republic accounted for a moderate 60 percent of rare earths mining in 2019, a staggering 90 percent of processing was in Chinese hands, according to the International Energy Association. The Oxford Institute for Energy Resources argues that this dominance has been achieved through decades of state investment, export controls, cheap labor, and low environmental standards. These pre-developments are currently nonexistent in Western countries, leading to higher processing costs, which could be the reason for Vital’s setback in Canada. China recently announced it would control mining more strictly and curb illegal mining activities, which could also raise costs there.
Photo: iStock/Captured by Keeleigh