Madagascar Greenlights Energy Fuels’ Critical Minerals Project

December 4, 2024

Madagascar has reinstated Energy Fuels’ full ownership of the Toliara critical minerals project, ending a four-year suspension imposed in November 2019. Due to fiscal negotiations. This milestone enables Energy Fuels (NYSE: UUUU, TSX: EFR) to resume progress on a project hailed as a potential “crown jewel” in the nation’s economy. CEO Mark Chalmers emphasised the importance of this development. Which clears the path for reintroducing community initiatives and advancing technical and environmental assessments.

Moreover, the company aims to finalise its financial investment decision by early 2026. Moreover, following the $241 million acquisition of the Toliara project from Base Resources in April. Positioned as a cornerstone for Energy Fuels’ growing rare earth element (REE) oxide production in Utah, the Toliara project is set to play a transformative role in global critical mineral supply chains.

Toliara Project: A Cornerstone for Rare Earth and Mineral Production

Energy Fuels’ Toliara project is poised to deliver significant global impact, with a projected mine life of 38 years based on ore reserves containing 904 million tonnes at 6.1% heavy minerals. The project focuses on titanium and zirconium production. Also, it plans to incorporate rare earth element extraction. Especially monazite a key source for advanced technologies such as electric vehicles and clean energy.

A definitive feasibility study from 2021 estimated an initial investment of $520 million. Yielding a $1 billion after-tax NPV and $5.9 billion in life-of-mine cash flows. Incorporating monazite production has further enhanced the project’s economics, with projections reaching $2 billion NPV and $10.7 billion cash flow. Monazite extracted at Toliara will supply 21,800 tonnes per annum to Energy Fuels’ White Mesa mill, ensuring competitive, low-cost REE oxide production while adding approximately 75,000 pounds of uranium annually as a cost-efficient by-product. This positions Toliara as a pivotal driver in the transition to clean energy solutions.

Frequently asked questions

What is the significance of the Toliara project for Madagascar?

The Toliara project is seen as a major economic driver for Madagascar, potentially becoming a “crown jewel” in its economy. It aims to generate significant revenue through the production of critical minerals like ilmenite, zircon, and rare earth elements, while also creating employment and boosting local infrastructure.

How will the Toliara project contribute to global rare earth supply chains?

Monazite from Toliara will be processed at Energy Fuels’ White Mesa mill in Utah, producing rare earth oxides at a globally competitive cost. This will help meet the increasing demand for rare earth elements used in clean energy technologies and electric vehicles.

What is the projected economic impact of the Toliara project?

Economic studies predict impressive returns, with a $2 billion after-tax net present value and $10.7 billion in life-of-mine cash flow. In addition to direct economic benefits, the project will contribute to local community development and strengthen Madagascar’s position in global critical mineral markets.