First-Ever U.S. Mining of Rare Metals Could Come From Nebraska

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By Stephen Lee

A mine outside Omaha, Neb., could deliver for the first time domestic supplies of the superalloy niobium, used in everything from pipelines to jet engines—if its owners can raise the money to get it built.

That’s a tall order—the price tag for building the Elk Creek Mine is an eye-popping $1 billion. The mine’s owner, NioCorp Developments Ltd., only has about $1 million of working capital, Mark Smith, the company’s president and CEO, told Bloomberg Environment.

On the other hand, the Trump administration has been helpful to NioCorp—partly through recently proposed tariffs on China—and it has won local political backing as well. The company pegs the mine’s potential gross revenue at $17.6 billion over a 32-year lifespan, and Smith said investor interest has been strong.

“All we can do is continue to reach out to interested parties, but I feel like we’re getting some outstanding traction on the financing side—as of late, in particular,” Smith said.

The $1 billion price tag for infrastructure and to dig the mine 90 miles south of Omaha, in the southeastern corner of Nebraska, could also drop.

Nordmin Group, a Canadian engineering company, will deliver an analysis of the mine’s economics this month. It’s not yet clear whether or by how much the construction estimate will change, but the mine’s new plan eliminates a major pipeline, which would itself cut $100 million out of the final bill, Jim Sims, NioCorp’s vice president of external affairs, told Bloomberg Environment.

Neither Smith nor Sims provided specifics about which investors have been looking at the mine, or how advanced the discussions are.

The Only Game in Town

One reason investors are interested is that NioCorp is positioned to be the only project of its kind. Niobium and scandium, both of which reside in the Elk Creek deposit, are 100 percent imported from other countries. A third mineral at Elk Creek, titanium mineral concentrate, is 91 percent imported, according to the U.S. Geological Survey.

Niobium makes steel stronger and is used in cars, buildings, bridges, and jet engines. All of the U.S. supplies of niobium are imported, mostly from either Brazil or Canada.

Scandium is used to strengthen and add flexibility to aluminum in everything from dental treatments to the nosecones of intercontinental ballistic missiles. That, too, is all imported, mostly from China.

Titanium mineral concentrate is the raw material from which titanium sponge metal —a porous, brittle form of titanium—and titanium dioxide, used in paints, are made. Domestic supplies are mostly brought in from Australia, Canada, Mozambique, and South Africa.

At Elk Creek, NioCorp is sitting on 250,000 tons of niobium pentoxide, 2,300 tons of scandium, and 891,000 tons of titanium dioxide, Sims said.

U.S. Government Help

In May, the Interior Department included niobium, scandium, and titanium on its list of critical minerals. That move was part of a White House bid to streamline the leasing, permitting, exploration, and extraction of those minerals.

In a June investment note, Heiko Ihle, a senior equity research analyst at H.C. Wainwright & Co., wrote that the minerals’ inclusion on the Interior Department list “is a major differentiating factor that could help the firm in obtaining a financing package that would ultimately allow project development to begin.”

The Trump White House also formally proposed tariffs in June against Chinese supplies of niobium, scandium, and titanium. The comment period for that list of proposed tariffs closes Aug. 17.

“That has clearly driven more interest in the project by large investors,” Sims said. “That spotlight has really helped draw more investment interest in the project.”

Changes to Environmental Footprint

NioCorp also has most of the federal environmental permits it needs, according to Sims.

NioCorp developed a way to recycle the chemicals used to process ore and eliminated a planned rail spur that would have triggered a full-blown National Environmental Policy Act review, Sims said.

The company also didn’t need a Clean Water Act permit because it shrank the size of its proposed processing facility to avoid dumping into federal waters. An initial mine plan included a pipeline to the Missouri River; that’s now been scrapped, Smith said.

“I was fairly convinced before, but when the latest results came out saying that there would be no need for the water line to dispose of groundwater, I was sold,” Doug Goracke, director of economic development for the nearby city of Tecumseh, Neb., told Bloomberg Environment.

Aaron Mintzes, senior policy counsel for environmental advocacy group EarthWorks, said the mine plan tweak to avoid the Missouri River is “exactly what NEPA’s supposed to do. Even if the goal is to avoid NEPA review, its purpose is to ensure stakeholders take a hard look and consider environmentally beneficial alternatives.”

Mintzes also said one key reason NioCorp’s federal permitting has gone so smoothly is because Elk Creek sits on private land.

“They still need zoning and mostly state water and air permits, but the Bureau of Land Management or Forest Service don’t interact with them much,” Mintzes told Bloomberg Environment.

Local Support

Lavon Heidemann, former Republican lieutenant governor of Nebraska in 2013 and 2014, told Bloomberg Environment that he’s confident the mine will be a clean operation. The mine is underground, not open pit, and “everything is within one square mile,” Heidemann said.

“I put my name behind this,” he said. “Some people don’t like change, and there will be change. But overall, it’s going to be such a positive change. Once people see the footprint, I don’t think there’s going to be much difference, except maybe 300 or 400 people who will make good money.”

Heidemann owns 200 acres of farm and pasture land close to the proposed Elk Creek mine, and he conceded that “the minerals might float that way.”

“But I would support this if I was 10 miles away,” Heidemann said.

State Permits Still Needed

NioCorp still needs 27 environmental permits from either state or local regulators, covering everything from explosives to water well installation to road use.

The company hasn’t yet submitted permit applications to the Nebraska Department of Environmental Quality, Brian McManus, a public information officer at the agency, told Bloomberg Environment.

Projects such as Elk Creek typically require a construction stormwater permit for the clearing, grading, and construction of the site, as well as an air construction permit before the company can construct, reconstruct, or modify any air contaminant source that raises the potential to emit above specified thresholds, McManus said.

Congressional Boosters

The mine also has support in Congress, largely because of its job-creating potential.

Rep. Adrian Smith (R-Neb.), whose district includes the Elk Creek mine, told Bloomberg Environment that he has “always supported the expansion of jobs in Nebraska, and I’m eager to reduce our reliance on foreign sources of critical minerals at every opportunity, particularly given China’s track record of unfairly trading in rare earth minerals.”

Smith said he and Rep. Don Bacon (R-Neb.) had urged the Trump administration to include scandium on its critical minerals list.

Republicans on the Senate Energy Natural Resources Committee were also upbeat about the idea of opening up more mining during a July 17 hearing at which Sims was a witness.

“We have to get away from this ‘immaculate conception’ theory of your iPhone, fighter jets, solar panels, all these things, just happen, they just appear out of thin air,” said Sen. Lisa Murkowski (R-Alaska), the panel’s chair. “We have to acknowledge the fact that many of the materials that are used to make them actually come from the ground. We have to dig them up, and that is an inconvenient truth for some.”

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