A quiet pattern in rare earth project history
The list of rare earth deposits announced on the ASX over the past two decades is long. The list of deposits that have reached commercial production is short. The gap between the two lists tells you most of what you need to know about why building a rare earth project is difficult.
The bottleneck is not the resource. There are large heavy rare earth deposits in Australia, Africa, North America and Central Asia. The bottleneck is not the geopolitics. The U.S., Australia, Canada and the U.K. have all signed critical minerals strategies committing public funding to the sector.
The bottleneck is the processing route.
Five ways to mine rare earths
There are five mineralogical pathways through which rare earth elements are extracted from the ground. They differ in capital intensity, processing complexity, permitting risk and time to commercial production.
| Mining type | Step 1 | Step 2 | Step 3 | Acid cracking? |
|---|---|---|---|---|
| Hard rock | Drill and blast | Crushing | Grinding | Yes |
| Regolith clay (primary) | Free dig | Crushing and grinding | - | Yes |
| Regolith clay (secondary) | Free dig | Flotation | Concentrate | No |
| Ionic clay | Free dig (sometimes in-situ leach) | Reagent treatment of all material | - | Yes (acid/reagents) |
| Mineral sand (monazite) | Free dig | Crushing | Grinding | Yes |
Acid cracking is the chemistry that liberates the rare earths from the ore body. It is the highest-cost stage of rare earth processing. It is also the highest-permit-risk stage. Sulphuric acid use at industrial scale requires environmental approvals that can extend project timelines by years. The capital expenditure for an acid cracking circuit at commercial scale runs into the hundreds of millions of dollars.
Four of the five mining types above require it. One does not.
Why secondary regolith clay is different
In a secondary regolith clay deposit, the rare earth elements sit in a phase recoverable through flotation alone. Flotation is a well-understood mineral processing technique that has been used at industrial scale for over a century in the copper, lead, zinc and nickel sectors. It involves no strong acids. It generates no acid waste streams. Its capital cost per tonne is materially lower than acid cracking circuits.
The chemistry happens in the geology, not in the plant.
The trade-off has historically been that secondary regolith clay deposits are rare. Most clay-hosted rare earth occurrences are primary phase, not secondary. The North Stanmore deposit, by Victory Metals' (ASX:VTM) technical disclosures, is the only commercial-scale secondary regolith clay heavy rare earth project on the ASX.
What the metallurgical testwork showed
Victory Metals has disclosed a series of metallurgical results from North Stanmore that, taken together, define the processing route:
- 80 per cent rare earth recovery in 30 minutes - against a four-hour textbook leach assumption that historically defined the sector
- 48-times flotation upgrade to 5.9 per cent TREO concentrate
- 70 per cent recovery on dysprosium, 75 per cent on terbium, 70 per cent on yttrium
For a non-technical reader, these numbers mean three things. First, the rare earths come out of the ore quickly, which keeps processing capital and operating cost lower than the sector norm. Second, the concentration step works efficiently, which means the project can produce a marketable product from a relatively low head grade. Third, the elements that matter most for defence and electric vehicle supply chains are recoverable at industrially viable rates.
Why this matters for the broader supply chain
In May 2026, U.S. manufacturers began pausing production lines as permanent magnet inventories ran down. The automotive sector was hit first, followed by aerospace and defence component assemblers across the Midwest.
The proximate cause was the Chinese export licence regime introduced in April 2025 covering seven heavy rare earth elements. The structural cause was that the Western supply chain capable of replacing those imports does not yet exist at scale. One Chinese province refines roughly 90 per cent of the world's heavy rare earths. The U.S. has not produced dysprosium domestically since 1998.
In March 2025, President Trump signed Executive Order 14241, listing critical mineral processing as a national security priority. The order activates the Defense Production Act for critical minerals funding. It does not, however, create deposits where deposits did not exist, or processing capacity where processing capacity has not been built.
The deposits and processing capacity that matter are now being built. North Stanmore is one of the projects being built.
The disclosed resource at North Stanmore
The North Stanmore mineral resource estimate, reported in accordance with the JORC Code 2012, sits at:
- 320 million tonnes total mineral resource
- 176 million tonnes Indicated
- 144 million tonnes Inferred
- 50+ million tonnes in a defined high-grade zone
The production target sits at 2.4 million tonnes per annum, supporting a mine life of more than 20 years from the high-grade zone alone.
The basket is 38 per cent heavy rare earth to total rare earth - against an ex-China sector average closer to 10 per cent.
External validation
Three external markers separate the project from earlier-stage exploration:
- Sumitomo Corporation, one of Japan's largest trading houses, has signed an offtake agreement covering future production
- U.S. System for Award Management approval clears Victory Metals for Department of Defense and Export-Import Bank funding pathways
- Pre-feasibility study scheduled for 2026, pilot plant scheduled for 2027
Sources: ASX:VTM announcements (refer to LR 3.1 for material information); USGS Mineral Commodity Summary 2024 on global heavy rare earth refining concentration; Reuters reporting on U.S. manufacturer production pauses; White House Executive Order 14241 (March 2025); Argonne National Laboratory technical materials on rare earth processing.
Information is general in nature only and does not constitute financial advice. Past performance is not indicative of future performance. Forward-looking statements involve risks and uncertainties. Mineral resource estimates are reported in accordance with the JORC Code 2012. Refer to ASX:VTM resource announcement of 12 March 2025 for the Competent Person Statement and full technical disclosure. Speak with a qualified financial, legal and tax adviser before making any investment decision.
