Iondrive Limited’s updated evaluation of its IONSolv™ technology projects a US$243 million post-tax NPV and US$62 million annual EBITDA for a single rare earth recovery module in the US, driven by high feedstock grade assumptions and independently validated recoveries.
- US$243 million post-tax NPV at 10% real discount rate
- Annual EBITDA of US$62.1 million on US$121.8 million revenue
- Feedstock grade assumed at 30.66% rare earth oxide
- Capital-light project with US$11.9 million development cost
- Recovery assumptions validated but full flowsheet testwork pending
Robust Economics Hinge on High-Grade US Feedstock
Iondrive Limited (ASX:ION) has released an updated economic evaluation for its IONSolv™ process, which recovers rare earth elements from end-of-life permanent magnets. The model, prepared by ProProcess Engineering and ModelAnswer Commercial Analytics, values a single 2,400 tonnes per annum (tpa) module at a post-tax net present value (NPV) of US$243 million using a 10% real discount rate. This marks a significant leap from the November 2025 evaluation, primarily driven by an assumed feedstock rare earth oxide (REO) grade of 30.66%, a substantial increase from the prior 7.2% assumption.
The economics assume annual revenue of US$121.8 million and EBITDA of US$62.1 million, representing a 51% margin. Development capital is modest at US$11.9 million, with sustaining capital of US$6 million over a decade of operation. The model forecasts a rapid post-tax payback of just under three months from first production, reflecting low upfront capital and full utilisation assumptions.
Recovery Rates Validated but Full Process Integration Pending
Key to the evaluation are rare earth recoveries independently validated through single-pass leach testwork, showing 96.5% for neodymium oxide (Nd₂O₃), 96.5–97.3% for praseodymium oxide (Pr₆O₁₁), and 93.5–93.6% for dysprosium oxide (Dy₂O₃). The economic model applies more conservative overall flowsheet recoveries of approximately 89% for these elements to account for downstream processing losses, which remain to be confirmed by integrated testwork.
The modelled output is around 630 tpa of rare earth oxide product, with 624 tpa payable neodymium, praseodymium, and dysprosium oxide. Dysprosium, a critical heavy rare earth, accounts for about 4.7% of the product by mass but nearly half of the revenue, underscoring its pricing importance. The assumed dysprosium price is US$2,070/kg, based on 90% realisation of Western market benchmarks, substantially higher than Chinese domestic prices, which are modelled in sensitivity scenarios.
Feedstock Grade and Pricing Drive Sensitivities
The model’s sensitivity analysis highlights realised product price and operating costs as the most influential variables on NPV. Even at a 30% reduction in product price, the post-tax NPV remains positive at US$130 million, while a 30% increase boosts it to US$355 million. Operating cost variations similarly impact valuation but development capital changes have a lesser effect.
Feedstock cost represents 51% of operating expenses, calculated at 20% of contained rare earth value, reflecting the high-grade assumption. However, the company emphasises that commercial-scale feedstock grade and availability remain to be confirmed, which is critical given the outsized impact on project economics.
Modular Design Targets US Supply Chain Independence
Iondrive’s strategy focuses on deploying modular IONSolv™ units in the United States, processing domestic end-of-life magnets to supply rare earth oxides to US manufacturers in defence, automotive, robotics, and clean energy sectors. The modular approach allows incremental capacity additions close to magnet waste sources, supporting traceable and secure supply chains amid offshore concentration of rare earth refining.
The first commercial module is planned for Oklahoma, with ongoing efforts to complete front-end engineering design, feedstock qualification, site permitting, and commercial agreements. The evaluation is a study, not a final investment decision, and the company is advancing integrated testwork to validate full flowsheet recoveries and refining assumptions.
CEO Highlights Feedstock as the Key Variable
CEO Dr Grant Caffery noted the updated evaluation reflects conservative recovery assumptions below independently validated leach results and stressed that feedstock grade and availability are the pivotal factors for project viability. He described the project as capital-light relative to industry norms, with the company focused on engineering, feedstock and customer qualification, and funding to reach a final investment decision.
With the US government increasingly prioritising domestic critical minerals supply, Iondrive’s progress aligns with strategic imperatives to reduce reliance on offshore rare earth sources. The company’s next milestones include completing qualification campaigns and securing funding and offtake arrangements, setting the stage for potential commercial deployment.
Bottom Line?
Iondrive’s promising economics hinge on confirming high-grade feedstock and integrated recovery performance, with upcoming testwork and commercial deals set to clarify project viability.
Questions in the middle?
- Will integrated testwork validate overall flowsheet recoveries at scale?
- Can Iondrive secure reliable, high-grade feedstock supply to underpin the modelled economics?
- How will fluctuations in dysprosium pricing between Western and Chinese markets affect project returns?