Energy Fuels Buys Australian Rare Earth Miner

U.S. uranium producer Energy Fuels has sealed a deal to acquire Australian Strategic Materials in a transaction that values the target company at over $300 million.

The rare earths and critical minerals miner said the offer price represented a premium of 121% over ASM’s closing price on January 20 and a 133% premium over the Australian company’s 30-day volume-weighted average stock price.

“We are already seeing it (consolidation), and we’re going to continue to see it, because everyone recognises that…rapid establishment of ?the supply chain you are going to need multiple parties who are working together,” the chief executive of Australian Strategic Materials, Rowena Smith, told Reuters.

“Energy Fuels is creating what the company believes will be the largest, fully integrated REE “mine-to-metal & alloy” producer outside of China to close a critical strategic gap in global supply chains for magnet applications, including automotive, robotic, energy, and defence technologies,” the buyer company said in a news release. Energy Fuels is the biggest uranium supplier in the United States.

The acquisition is in line with U.S. federal government efforts to reduce the country’s dependence on China in rare earths and other critical metals and minerals and boost its self-sufficiency.

Earlier this month, a Washington official told Reuters the United States would push its G7 partners to join the import dependency reduction efforts. “Urgency is the theme of the day. It’s a very big undertaking. There’s a lot of different angles, a lot of different countries involved, and we really just need to move faster,” the official, whom Reuters did not name, told the publication.

Also this month, a bipartisan group of legislators proposed setting up a reserve for critical minerals to ensure supply resilience and encourage more local producers to expand output. The reserve is proposed to be funded with $2.5 billion.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com