Europe’s first rare earth processing plant could be built in Hull to supply the booming offshore wind industry.
Pensana Rare Earths has submitted a planning application for the $125m facility, which would create 100 direct jobs. The company would produce rare earth oxides, which are used to manufacture the powerful magnets that drive the motors of offshore wind turbines and electric vehicles.
Paul Atherley, chairman of Pensana, said the company chose Hull because of its port and world class infrastructure. Referring to the shared workspace company, he described the Saltend chemical park as a “WeWork” for processing companies with power, chemical supplies and waste disposal all available. The site is already home to BP Chemicals, Ineos and Air Products.
Hull is also close to the Dogger Bank offshore wind farm, one of the world’s largest. The FT reported in November that GE was in talks to build a wind turbine factory in the area.
The UK government plans to increase the locally made content of turbines as part of its £12bn “green industrial revolution”.
China controls 80 per cent of the global supply of the 17 main rare earth metals. The UK and EU are keen to support alternative sources of these materials that are vital to the low carbon economy.
The plant in Hull will process neodymium and praseodymium from a proposed mine in Angola. Pensana hopes to attract manufacturers of turbines and cars by providing a more expensive but ecologically sound alternative to Chinese suppliers of rare earths and their oxides, Mr Atherley said.
“The UK and EU understand you cannot build a green economy on unsustainable raw materials. European companies do not want to depend on one source for 90 per cent of their supply,” he said, adding that he believed Pensana could capture 5-7 per cent of the market in wind turbines before moving into vehicles.
Pensana is UK listed and worth around £200m but Mr Atherley said raising the money through bonds should be straightforward.
Innovate UK, a government agency, awarded funding in November to Less Common Metals, a rare earth alloys producer, to conduct a feasibility study into establishing a fully integrated supply chain for rare earth permanent magnet production in the UK.
LCM, based in Ellesmere Port near Liverpool and the only rare earth magnet alloy producer in Europe, is also moving into metal production, plugging a gap in the magnet supply chain.
Hull is bidding for free port status, which would reduce taxes and import and export costs. But Mr Atherley said he believed the oxides would be able to enter the EU tariff free under the post-Brexit trade deal because of the processing involved.
The EU is setting up a European Raw Materials Alliance to establish a sustainable supply and processing capacity of rare earths. It is using €3bn of the EU post-Covid recovery fund for the initiative’s development.
However, rare earth processing produces toxic waste and environmental groups could oppose the plant. Lynas, the Australian company that is China’s main competitor, has struggled with regulatory approval for a facility in Malaysia because of the issue.
Mr Atherley has been defeated by environmental activists before. In 2019, he quit as chief executive of Berkeley Energia, which has faced years of delays in seeking approval for an opencast uranium mine in Spain.