American Rare Earths has partnered with Novex to tackle the critical oxide-to-metal bottleneck in the US rare earth supply chain, aiming to establish a fully domestic mine-to-magnet value chain from its Halleck Creek Project.
- MoU signed with Novex for oxide-to-metal conversion
- Focus on molten salt electrolysis as preferred metallization technology
- Collaboration targets domestic rare earth metal production facility
- Halleck Creek Project offers long-term US rare earth supply
- Partnership aligns with US national security magnet sourcing rules
Addressing the Oxide-to-Metal Bottleneck
American Rare Earths Limited (ASX:ARR) has taken a decisive step to close a critical gap in the US rare earth supply chain by signing a Memorandum of Understanding (MoU) with Novex LLC, a specialist in rare earth metallurgy. The partnership aims to convert separated rare earth oxides from ARR's Halleck Creek Project in Wyoming into the metals essential for permanent magnet production, a process currently dominated by Chinese suppliers.
This oxide-to-metal conversion stage has long been the chokepoint preventing a fully domestic mine-to-magnet supply chain. Magnet manufacturers require metals and alloys rather than oxides, and with China imposing export restrictions on key rare earth elements like samarium, terbium, dysprosium, and yttrium since April 2025, US defense contractors face looming sourcing challenges. From January 2027, they will be barred from using magnets containing rare earths mined or processed in China, elevating domestic metallization capability to a national security imperative.
Technology Review Favors Molten Salt Electrolysis
The MoU follows ARR's comprehensive review of metallization technologies to process separated oxides into metals. Among the options; fluoride conversion with calciothermic reduction, lanthanothermic reduction, and high-temperature molten salt electrolysis; the latter emerged as the cleanest and most promising. Molten salt electrolysis reduces reliance on hazardous chemicals like anhydrous hydrogen fluoride and avoids consuming valuable rare earth metals as reductants, a drawback of lanthanothermic methods.
Novex brings to the table an operational technology development centre in Washington state and a history of federally funded projects targeting rare earth metal production. Their expertise will support ARR in optimizing processes, improving recovery and purity of critical elements such as neodymium-praseodymium (NdPr), terbium, dysprosium, samarium, and yttrium extracted from Halleck Creek ore.
Scope of Collaboration and Facility Development
The MoU outlines a multi-faceted cooperation framework. Novex will convert NdPr oxide from ARR's demonstration plant into metal suitable for magnet precursor use, with jointly agreed specifications and timelines. Beyond pilot stages, the parties plan to co-design a domestic metal production facility encompassing process design, engineering, throughput, siting, permitting, and cost assessments.
Crucially, the collaboration seeks to establish a fully domestic supply chain extending from Wyoming's Halleck Creek ore through Novex's metallization processes to permanent magnet manufacturing. The partners will also explore producing heavy rare earth oxide samples containing samarium, dysprosium, and terbium for metallurgical testing and qualification. Engagement with federal and state programs supporting critical minerals and magnet supply chains will be assessed to align development plans and funding opportunities.
Halleck Creek's Strategic Positioning
Halleck Creek is the largest known rare earth oxide deposit in the US by total contained rare earth oxides, boasting a JORC-compliant mineral resource of approximately 2.63 billion tonnes. Situated entirely on Wyoming state land, the project benefits from streamlined permitting and robust government backing, including a non-binding US Export-Import Bank letter of interest for up to US$456 million in funding.
This MoU builds on ARR's prior achievements in oxide production and separation from Halleck Creek ore, extending its Wyoming-based value chain downstream into rare earth metal production. The initiative dovetails with the company's ongoing efforts to accelerate project feasibility and pilot plant development, positioning ARR as a key player in reducing US reliance on Chinese rare earth imports.
Bottom Line?
The ARR-Novex partnership could reshape the US rare earth supply chain by pioneering domestic metal production, but technology scale-up and regulatory hurdles remain key challenges.
Questions in the middle?
- Will molten salt electrolysis prove scalable and cost-effective at commercial volumes?
- How will federal and state funding shape the timeline and viability of the planned metal production facility?
- Can ARR and Novex navigate permitting and supply chain integration swiftly enough to meet the January 2027 US defense magnet sourcing deadline?