Energy Fuels Madagascar Rare Earths Project Faces Delay After Government Change

Energy Fuels

Energy Fuels Madagascar rare earths project is likely to face a delay after a change in government slowed negotiations for a stability agreement. The US rare earths producer said progress on the Vera Mada project in Madagascar has been held back by the administrative transition.

Energy Fuels Madagascar rare earths project had been moving toward an investment agreement before the government change in September-October last year. Chief executive Ross Bhappu said the company had been close to signing the agreement before the process slowed.

Energy Fuels Madagascar rare earths project remains strategically important because Vera Mada is expected to produce monazite, a key rare earth-bearing mineral used to feed separation and downstream processing. The company initially planned to reach a financial investment decision tied to development and commissioning by the end of 2029.

The first phase of Vera Mada is planned with capacity to produce 20,000 t/yr of monazite. Any delay could affect Energy Fuels’ timeline for building a larger rare earth feedstock platform outside China.

Vera Mada and Donald Show Feedstock Complexity

The Vera Mada delay highlights how rare earth projects depend on more than geology. Government agreements, legal stability, fiscal terms and political continuity can all determine whether a project reaches investment decision.

A stability agreement is especially important in emerging mining jurisdictions. It can provide investors with clearer expectations around taxes, permitting, operating rules and long-term project protections.

Energy Fuels is also facing delays at the Donald project in Australia. The project is a joint venture with Astron and is designed to produce 14,000 t/yr of monazite.

Donald has been slowed by the need to finalise offtake agreements for more than four heavy mineral concentrates. Energy Fuels must also coordinate those agreements with financing parties and its joint venture partner.

That process is commercially complex because monazite projects often produce several mineral streams. Each product can require separate customers, pricing structures, logistics arrangements and financing approval.

These delays show the challenge of building rare earth supply chains outside China. Upstream projects must secure feedstock, offtake, financing, regulatory approval and processing routes before they can become meaningful industrial supply.

Terbium, Dysprosium and Yttrium Lift Strategic Value

Energy Fuels is still gaining market attention from its downstream rare earth progress. The company said it received substantial offtaker interest after producing its first terbium.

The company is currently producing about 1kg of terbium each week. It plans to add dysprosium production and other heavy rare earths such as samarium, europium, gadolinium and possibly yttrium, depending on market conditions.

This matters because terbium and dysprosium are critical inputs for high-performance permanent magnets. These magnets are used in electric vehicles, wind turbines, robotics, defence systems and advanced industrial equipment.

Yttrium is also gaining strategic attention. Energy Fuels said demand and requests for yttrium from the aerospace industry are extremely strong.

The company’s first-quarter financial performance also improved. Its loss narrowed to $11mn on revenue of $36mn, compared with a $26mn loss on revenue of $17mn a year earlier.

Energy Fuels is therefore advancing on two fronts. It is building heavy rare earth separation capability, while trying to secure long-term monazite feedstock from Madagascar and Australia.

The near-term risk is timing. If Vera Mada and Donald continue to slip, Energy Fuels may need to rely more heavily on existing and alternative feedstock sources to support its rare earth growth strategy.

The Metalnomist Commentary

Energy Fuels’ challenge shows that rare earth supply chains are constrained by project execution as much as processing technology. Terbium, dysprosium and yttrium demand is strong, but feedstock security will decide how quickly non-China supply can scale.