OMAHA, Neb. (AP) — The company that wants to mine for critical minerals in southeast Nebraska has signed a deal with Stellantis, giving the automaker access to the rare earth elements used to produce high-powered magnets needed for its electric vehicles.

NioCorp announced the tentative agreement with the automaker whose brands include Chrysler, Alfa Romeo and Maserati on Thursday. The companies didn't disclose how much Stellantis will pay because those details are still being negotiated, but this deal with such a high-profile buyer will likely provide a boost to NioCorp's effort to raise $1.1 billion to establish the mine about 80 miles (130 kilometers) south of Omaha near the town of Elk Creek.

It's also not clear just how much of the highly sought-after elements Stellantis would be able to buy as part of this agreement because NioCorp is still working to determine whether it will be make economic sense to produce the neodymium-praseodymium oxide, dysprosium oxide, and terbium oxide used to make magnets. The proposed mine's main product would be niobium that's used to make steel lighter and stronger.

But most of the rare earth elements available today are produced in China, so President Joe Biden has been pressing for more of them to be mined domestically.

“This could really turbocharge our project financing and help to accelerate moving the project to construction and eventual commercial operation,” NioCorp CEO Mark Smith said.

NioCorp has raised more than $80 million since 2013 to explore the site, but development of the project dates back to the 1970s when a different company first started drilling samples. The proposed mine is expected to create over 400 jobs if it is built.

The Centennial, Colorado, company still has a long ways to go to raise the $1.1 billion it needs to establish the mine. But NioCorp officials are optimistic because they have applied for up to $800 million in financing from the Export-Import Bank of the United States, which is in the process of reviewing the mining company's applications.

NioCorp also said Stellantis will consider investing in the mine, but that won't be decided until after the companies finalize the rare earth purchase agreement.

Stellantis’ Maxime Picat said in a statement that this agreement should help the automaker meet its goals to produce more electric vehicles and cut its carbon emissions.

Currently, America imports all the niobium and scandium and most of the titanium and rare earths that NioCorp hopes to produce. The only U.S. mine that produces rare earths now is run by MP Materials in Mountain Pass, California.

 

AMSTERDAM and CENTENNIAL, Colo. – July 6, 2023 – Stellantis N.V. ("Stellantis") and NioCorp Developments Ltd. ("NioCorp" or the "Company") (Nasdaq:NB) (TSX:NB) today announced the signing of a Rare Earth Offtake Term Sheet ("Term Sheet"). The objective is to enter into a definitive rare earth supply agreement to support Stellantis' commitment to build resilient supply chains and reach carbon net zero by 2038 and to help accelerate NioCorp's path to commercial production of magnetic rare earth oxides in the U.S.
 
The Term Sheet executed today envisions a definitive agreement for a 10-year offtake contract for specific amounts of neodymium-praseodymium oxide, dysprosium oxide, and terbium oxide that NioCorp aims to produce at its Elk Creek Critical Minerals Project (the "Elk Creek Project") in southeast Nebraska, subject to the receipt of adequate project financing.  Final volumes would be set in a definitive agreement.
 
“Stellantis intends to lead the industry with the commitment to be carbon net zero by 2038 – a goal that requires innovation and a complete redefinition of our sourcing strategies,” said Stellantis Chief Purchasing and Supply Chain Officer Maxime Picat. “By working with partners like NioCorp, we are taking important steps, with the aim of decarbonizing mobility and ensuring strategic supplies of raw materials necessary for the success of the Company’s global electrification plans highlighted in our Dare Forward 2030 strategy."
 
"We are very pleased to announce that NioCorp and Stellantis have agreed to collaboratively develop Stellantis’ magnetic rare earth supply chain, including helping to identify a sintered rare earth permanent magnet manufacturer that provides additional geographic optionality to Stellantis, in support of their ambitious commitment to reach carbon net zero by 2038," said Mark Smith, Executive Chairman and CEO of NioCorp.  "We believe that NioCorp’s position as a potential U.S. supplier of multiple critical minerals needed for vehicle electrification offers Stellantis important optionality to secure supply chains and support its growth targets."
 
As no economic analysis has been completed on the rare earth mineral resource comprising the Elk Creek Project, further studies are required before determining whether extraction of rare earth elements can be reasonably justified and economically viable after taking account all relevant factors.
 
The entrance into a binding off-take agreement is subject to the satisfactory completion of due diligence, the negotiation and settlement of final terms, the negotiation of definitive documentation, and customary closing conditions, including regulatory approvals. There can be no assurance that any binding agreement will be entered into on the terms described herein or at all. See “Forward-Looking Statements” below for additional information.