Rare earth specialist Pensana has brought forward its scheduled commissioning date for the Saltend magnet metal plant.
Global engineering specialists who have now completed the front end engineering and design aspects for both the Humber complex chemical processing facility and Logonjo element in Angola, Africa, have also brought the total cost down by more than £23 million.
Total capital expenditure on the dual continent operation has been reduced from $525 million (£401.9m) to $494 million (£378.1m) - with further efficiencies forecast.
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It will start the supply chain for vital elements used in offshore wind turbines and electric vehicles, with more than 100 jobs to be created on the freeport site.
In an update to the City, the “material improvement in project economics” were outlined, while a strong market price for the finished product - neodymium and praseodymium oxides - has pushed up the value of the open investment opportunity to $2.4 billion (£1.8b). Shares were up more than 14 per cent in the day's trading, closing 9p up at 73p on Wednesday.
Approaches from electric vehicle and wind turbine original equipment manufacturers in Europe and the US were documented, with an agreement also in place with an Asian trading house for half the anticipated 4,500 tonnes produced.
Pensana chair, Paul Atherley, said: "Reducing our capital and operating costs is a significant achievement by the technical team led by chief executive Tim George, especially given the inflationary pressures and supply chain constraints affecting projects globally. The lower capital and strong operating margins will make the project attractive to our financiers and are expected to lower the overall cost of finance.
“We continue to have very positive discussions with some of the world's major automotive and wind turbine manufacturers, who recognise the strength of Pensana's model and the security of supply we can provide for these essential industries. With only one major magnet metal rare earth producer outside China, transparent and independent capacity is urgently required, particularly in Europe.
“Pensana is excellently positioned to bring high value manufacturing back to the UK and be a first mover in meeting this burgeoning demand for critical magnet metals."
Saltend is set to produce 5 per cent of the projected world demand, with further phases outlined to introduce recycling of wind turbine components.
Pensana has worked alongside Wood Group, Paradigm Project Management and Professional Cost Consultants to drive down the cost. A comprehensive value engineering and optimisation programme is now well advanced, with further reduction in the capital costs anticipated.
Specific workstreams have included spent acid regeneration and alternative construction methods in Africa to allow a significantly shorter lead time for fabrication and ease of installation, while optimisation of civil and earthworks for load bearing structures being undertaken alongside the completion of detailed geotechnical investigation, will shorten the construction period at Saltend and “allow for future affordable expansion into downstream activities associated with magnet metal production, magnet recycling and processing”.
Much of the cost has been removed from the African primary processing, with the figure down from $286 million (£218.8m) to $250 million (£191.3). Saltend has crept up slightly from $190 million (£145.3) to $195 million (£149.2)
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