➤ U.S. uranium company Energy Fuels Inc. is adapting its existing infrastructure to process monazite and produce rare earth carbonate at its White Mesa mill in Utah.

➤ The company plans to apply its expertise in handling radioactive material to eventually process 15,000 tons to 30,000 tons of monazite per year using existing licenses and facilities.

➤ Energy Fuels wants to meet the demand of electric vehicle and renewable energy manufacturers seeking domestic sourcing of key materials.

Energy Fuels' Vice President of Marketing and Corporate Development Curtis Moore. Source: Energy Fuels Inc.

Rare earth elements have several applications in the clean energy space, including the magnets in wind turbines and electric vehicle motors. By 2040, demand for rare earth elements could be three to seven times above current levels, according to the International Energy Agency. A majority of rare earth extraction and processing occurs in China, but uranium producer Energy Fuels wants to make a name for itself in the rare earth supply chain by building out U.S. processing capacity.

Energy Fuels has used solvent extraction processing technology for uranium and vanadium for several years and holds the licenses to handle radionuclides. It plans to apply existing infrastructure at its White Mesa mill in Utah to rare earth element recovery and separation. The company has been purchasing monazite, a mining byproduct of heavy mineral sands, and processing the mineral to recover rare earth carbonates. It purchases monazite mined in Georgia and Florida by Chemours Titanium Technologies Ltd., a subsidiary of Delaware-headquartered chemicals manufacturer The Chemours Co., but Energy Fuels is on the global lookout for additional suppliers.

S&P Global Market Intelligence interviewed Energy Fuels Vice President of Marketing and Corporate Development Curtis Moore to learn why a company that for decades has been one of the leading uranium producers in the U.S. has pivoted to rare earth elements. The following conversation has been lightly edited for clarity and length.

S&P Global Market Intelligence: Energy Fuels is the leading producer of uranium in the U.S. Why pivot to producing rare earth products too?

Curtis Moore: In some respects, this rare earths story is possibly even overshadowing our uranium story. Rare earth minerals are used in a whole host of clean energy and advanced technologies, but where the real growth is coming from is electric vehicles. In response to consumer demand, all these major auto manufacturers are saying that they're going to be all-electric by a certain date. But that is going to take a whole lot of rare earth minerals.

Monazite is the mineral that we are processing right now at the White Mesa mill in Utah for the recovery of rare earths. Monazite is well known as being a superior rare earth mineral because it's very high in the magnetic rare earths needed for electric vehicles and wind energy. We have the licenses and capabilities to handle the radionuclides associated with monazite. All rare earth minerals are radioactive, and monazite is no different.

We're already producing mixed rare earth carbonates. We're already cracking and leaching monazite, and we are moving forward right now to install the infrastructure at the White Mesa mill to produce separated rare earth oxides.

Most of the world's rare earth mining and refining happens in China. You've noted that it's important to diversify supply. Why?

The major auto and renewable energy manufacturers, they're very concerned about being 100% dependent on China for their raw materials. They want to diversify their sources of raw materials outside of China. They don't want to get caught in a situation where there's some big trade war. The companies just see risk in being totally dependent on China.

We are not going to knock China off of its pedestal. China is going to be dominant in rare earths for the foreseeable future. We're trying to carve out a nice, little rare earth niche here in America.

What's the biggest challenge when it comes to building out a U.S.-based rare earth supply chain?

Securing enough monazite. We can easily produce more rare earth carbonate if and when we get more monazite. We're talking to monazite suppliers all over the world. Most of the world's monazite is still going to go to China, but we hope to get a little bit of that for our project and create a rare earth supply chain here in Utah.

Where do you get the monazite to extract the rare earth elements, or will you mine it?

We don't need to mine monazite, it's already mined all over the world at heavy mineral sand operations. Historically, monazite was mostly considered a waste product because demand was really low for magnets and it was radioactive, so they had to just get rid of it. So these heavy mineral sand guys are recovering the monazite as a low-cost byproduct from their primary titanium and zirconium production. We don't need to go open a mine.

This summer, Toronto-based investment fund Sprott Asset Management LP started buying up millions of pounds of uranium for its new trust, sending uranium spot prices surging. Has the recent volatility changed Energy Fuels' outlook on uranium?

We're certainly watching the markets very, very closely. What's game-changing about Sprott is that they are buying the uranium and sequestering it. They're sitting on it. There's really no mechanism for them to sell that material because they have created this as a mechanism for investors to be able to invest in physical uranium. It's almost like 20 or 30 nuclear utilities out of nowhere starting to buy uranium.

It's significantly tightened up the spot market. Traders and utilities have depended on quite a bit of liquidity and availability of physical uranium in the spot market over the last several years. Now they can't depend on it. And so there's just a lot of question marks about where the uranium is going to come from. I'll tell you, we're seeing a lot more interest from utilities right now because they have more competition.