While critical minerals such as rare earth elements are on the agenda for governments and businesses today, what triggered your interest for this area when REEtec was founded more than 10 years ago?

At Scatec Innovation our vision is “To create value and make the world a little cleaner”. REEtec’s proprietary technology provides a platform for significant value creation, and we will make the world a little cleaner by providing critical materials for the energy transition via a sustainable process. In that sense, REEtec’s value proposition fits very well with our vision. When we first started to work on what is now REEtec’s proprietary technology platform, the focus was on efficient separation of valuable materials in generals. Our initial thinking was to establish a recycling business. However, it soon became clear that the technology had a much broader industrial potential, and we soon directed our attention towards the separation of rare earth elements. This development was very much driven by our CEO, Sigve Sporstøl, who has considerable experience both from technology development and larger-scale industrial operations.

Even after having identified rare earth elements as one area to utilize the separation technology, it was not obvious from the beginning that REEtec’s sweet spot was NdPr. After all there are seventeen rare earth elements in total, and many of them are processed and modified for a wide range of application. So, in parallel with further developing REEtec’s technology platform, we also launched a number of business development activities to identify markets that we could serve well and customers with which we could partner. With increased focus on renewable energy and e-mobility it became clear that NdPr, critical to the performance of permanent magnets, would become an attractive launch market for REEtec.

In your efforts to develop REEtec’s proprietary technology platform, what have been your key priorities?

After we established that NdPr most likely would become an attractive market for REEtec to serve, our overall objective became to ensure that the core technologies and the manufacturing processes in general were cost competitive and sustainable. Today, 85% of rare earth separation is done in China. This is both a challenge and an opportunity. From a cost perspective, it is inherently difficult for companies in the western world to compete with Chinese companies. The playing field is simply not level.

On the other hand, being based in Norway, a country with highly skilled labor, a very favorable energy mix and predictable industry regulations, REEtec is well-positioned to respond to the requirements of companies in the energy transition. So, from the beginning we were determined to develop technologies that could compete on cost with the incumbents and at the same time actively use technology to secure a sustainable operation.

Specifically, what in REEtec’s technology platform makes it cost competitive and sustainable?

Thankfully there is no conflict between being cost competitive and operating in a sustainable manner. On the contrary, in many situations one can improve both the cost competitiveness and the sustainability by the same measures. Some key characteristics of REEtec’s manufacturing process are that it consists of few process steps in a closed loop, it is highly automated, and it is very energy efficient.

The closed loop set-up helps secure high yield in terms of output of finished product. In essence we utilize our feedstock in a particularly good way. This is obviously good, both for cost and sustainability. The closed loop also allows for recycling of process chemicals, again good for both cost and sustainability. The close loop, without human exposure to process chemical, also provides for a very safe working environment. The high level of automation helps control the process to secure stable operations and high yields. And finally, we have made significant investments into energy recovery. Given the significant increase in energy prices we have seen across many markets over the last couple of years our investments into energy recovery have helped secure an even more robust business case.

Through development of proprietary processes, we have demonstrated at industrial scale the ability to recover close to 95% of the energy consumed. As a result, REEtec can offer its customers NdPr with a CO2-footprint that is less than 10% of that the incumbents. This world leading CO2-footprint is the result of both a very energy efficiency manufacturing process for NdPr and the Norwegian energy mix, which consists predominantly of renewable energy in the form of hydroelectric power. REEtec’s ability to help customers decarbonize their supply chains is clearly a key part of our value proposition.

On that note, how have customers responded to what REEtec has to offer?

We have already signed sales agreements for 80% of the planned output of NdPr from the first manufacturing facility. We are particularly proud of our relationship with Schaeffler Group, a leading automotive and industrial supplier. Building on REEtec’s ambition to provide a more sustainable supply chain for NdPr and permanent magnets, Schaeffler aims to make electric motors for a wide range of applications in electric vehicles even more sustainable.

In the words of Anders Schick, Chief Operating Officer of Schaeffler; “In REEtec, Schaeffler has gained a highly innovative partner that uses a novel and especially sustainable process for the production of pure rare earth elements.” In addition to the Schaeffler Group REEtec work with a number of leading companies within electric vehicles, wind turbines, and other industries.

Given the significant customer interest, what follows after the manufacturing facility now under construction?

The NdPr market is expected to grow close to ten times towards 2035 and combined with the increased focus on reliable and sustainable supply chains it is no surprise that we see a lot of interest, both from existing and potential customers. Right now, we are very focused on making sure that we execute well the construction of our first manufacturing facility. But already in the second half of this year we expect to start preparations for the second manufacturing facility.

The key is really to secure feedstock from sources that can support our ambitions to provide our customers with NdPr with a world leading CO2-footprint from a supply chain that is transparent and sustainable. Our ambition is that the second manufacturing facility will commence operations in 2027.