For years, the rule in rare earths was simple: nobody cracks allanite. In her second appearance on Rare Earth Exchanges, Melissa Sanderson — director at American Rare Earths (ASX: ARR) and co-chair of the Critical Minerals Institute — tells Dustin Olsen and Daniel O’Connor that the company believes it just did, at Halleck Creek, Wyoming, the largest currently known rare earth deposit in North America. What follows is a fast-moving update on the science, the financing, and the one risk that still hasn’t been solved.
Cracking allanite: the Red Mountain Pluton breakthrough
Allanite is a hard-rock host mineral, and the historical problem is brutal: crush and grind it finely enough to free the rare earths, and you grind the rare earths down until they can’t be separated in commercial quantities. American Rare Earths’ lead geologist found that Wyoming’s Red Mountain Pluton has a uniquely fractured crystalline structure — the crystal is already broken, so the rare earths come free without being destroyed. Working with Tetra Tech, the company built a flow sheet on conventional, proven technology.
- Three host types, rising difficulty: monazite sands (simplest), ionic clays (harder), and hard rock like allanite (historically the hardest).
- The fix was geology, not new chemistry: a fractured pluton structure lets the rare earths separate using existing solvent-extraction methods.
- A pilot plant with the Saskatchewan Research Council (SRC) is producing oxide to demonstrate the flow sheet works.
The money behind the push to production
- $456M EXIM Bank letter of interest: an unusual signal of strategic interest, issued off the company’s scoping study.
- $7.1M Wyoming state grant: a “force magnifier” that roughly doubled the company’s working resources for permitting and drilling.
- NASDAQ listing targeted by year-end, with the pre-feasibility study (PFS) due no later than Q3.
- Cowboy State Mine on Wyoming state land: permitting in ~3–5 years instead of the 10–15 years federal permitting can take; production anticipated by 2031.
- Heavy rares confirmed: significant samarium and yttrium alongside neodymium and praseodymium make Halleck Creek exceptional in composition, not just size.
The real risk isn’t the rock — it’s capital
Asked to name the biggest risk factor, Sanderson doesn’t say geology, permitting, or China. She says capital — attraction, retention, and mobilization. Mining’s long lead time to payback and American investors’ reluctance to hold mining companies (“I don’t believe in mining companies”) make funding the hardest part, even with the technical problems largely solved. Government financing, once unthinkable as a foundation for a company’s financial stack, is now treated as a crucial first layer.
The November clock and the hidden costs buyers aren’t pricing in
- China’s November deadline: the Trump–Xi détente from autumn 2025 expires around November 2026; worst case, China sharply tightens exports again.
- The smuggling crackdown: Beijing is “closing off the rat holes” that once let Western firms patch supply through gray-market channels.
- Hidden costs: insurance through chokepoints like the Strait of Hormuz, failure-to-deliver penalties, and reputational damage that buyers haven’t put on their sheets.
- The “green premium” reframed: once those costs are counted, Western production stops looking cost-prohibitive.
- Three timelines: political, quarterly, and industry — and mines don’t fit the first two.
Key Takeaways
- American Rare Earths says it has cracked hard-rock allanite at Halleck Creek using a conventional flow sheet — a claim with big implications for U.S. supply.
- A $456M EXIM letter of interest and a $7.1M Wyoming grant are accelerating a project targeting a NASDAQ listing this year and production by 2031.
- Building on Wyoming state land cuts permitting to ~3–5 years versus 10–15 on the federal path.
- The number-one risk is now capital, not the technical or permitting hurdles.
- A real supply crunch could follow China’s November deadline and its crackdown on smuggling.
FAQs
What is American Rare Earths’ Halleck Creek deposit?
Halleck Creek, in Wyoming, is the largest currently known rare earth deposit in North America. American Rare Earths (ASX: ARR) is developing it, starting with a first-phase operation called the Cowboy State Mine on Wyoming state land.
Why was allanite considered impossible to process?
Allanite is a hard-rock mineral, and grinding it finely enough to free the rare earths usually destroys the ability to separate them. Wyoming’s Red Mountain Pluton has a uniquely fractured crystalline structure that lets the rare earths separate using conventional, proven technology.
How large is the EXIM Bank letter of interest?
The Export-Import Bank of the United States (EXIM) issued a Letter of Interest for up to $456 million, based on the company’s scoping study — an unusually strong signal of strategic interest.
When will the mine reach production?
American Rare Earths anticipates production by 2031. Building on Wyoming state land allows permitting in roughly three to five years instead of the 10–15 years federal permitting can take, and the company is targeting a NASDAQ listing by the end of 2026.
What does Melissa Sanderson say is the biggest risk?
Capital. Sanderson argues the hard technical problems are largely solved, but mining’s long payback and investor reluctance make capital attraction, retention, and mobilization the number-one challenge.
What is China’s November 2026 deadline?
The Trump–Xi détente from autumn 2025 is set to expire around November 2026. Sanderson’s worst case is China sharply tightening rare earth exports again, compounded by its crackdown on smuggling.
Transcript
Expand to see full transcript...
Dustin Olsen (00:41)
Welcome back to the Rare Earth Exchanges Podcast. I’m Dustin, with my co-host Daniel, and today’s repeat guest is Melissa Sanderson. Mel, how are you?
Mel Sanderson (00:54)
Doing great. Thanks for having me back, guys.
Dustin Olsen (00:58)
You were on back in February and we loved it. Can you update us on American Rare Earths over the last six months?
Mel Sanderson (01:18)
Gladly — it’s a good-news story, and I’ll start with people. Our CEO, Mark Wall, has built a strong team and made a key call: rather than build our own pilot plant, we partnered with the Saskatchewan Research Council (SRC) to produce our oxide and prove the flow sheet works. He’s also driving us toward a NASDAQ listing by year-end, with the PFS finalized no later than Q3 and the legal work to move from the ASX to U.S. standards. We’ve added a board member who runs a Casper uranium company, and we’re partnered with the University of Wyoming and the Western Research Institute. All that technical progress traces back to our geologist Phoebe’s discoveries about the Red Mountain allanite pluton. When I joined the board six years ago, everyone said, “Nobody’s ever cracked allanite.” Well, with this specific allanite, it can be cracked — and with Tetra Tech we built a viable flow sheet on conventional, proven technology.
Dustin Olsen (05:32)
You mentioned going public — what’s the timing?
Mel Sanderson (05:42)
A NASDAQ listing by the end of this year.
Daniel O'Connor (05:52)
Congratulations. For the lay audience: why is allanite difficult, and what’s the breakthrough?
Mel Sanderson (06:29)
There are three host materials, rising in difficulty: monazite sands (simplest), ionic clays, and hard rock like allanite. With hard rock you must crush and grind — and historically that grinds the rare earths down until they can’t be separated commercially. What makes ours unique is the Red Mountain Pluton. Phoebe, who’s English, became convinced at the master’s level that it had a far more fractured crystalline structure than most allanite — and came to the University of Wyoming to prove it. Her theory held: the crystal is already fractured, so the rare earths separate readily using existing technology. People are foundational — without Phoebe, we might not have gotten there.
Daniel O'Connor (10:07)
You’ve also had state support, and there’s an EXIM Bank instrument — is that right?
Mel Sanderson (11:17)
It’s a Letter of Interest. That EXIM LOI recognizes the strategic value of Halleck Creek — the largest currently known deposit in North America — and it came off our scoping study, which is highly unusual. Accessing $456 million would be thrilling, but the real signal is validation that this is a strategic U.S. asset; in full production we could meet America’s rare earth demand for hundreds of years, across robots, data centers, satellites, and space. Wyoming’s $7.1 million grant was a force magnifier, roughly doubling our resources for permitting, environmental, water, air, and wildlife studies. On composition: we have the neodymium and praseodymium lights, and we’ve since defined significant heavy rares — including samarium and yttrium — which makes Halleck Creek exceptional in composition as well as size.
Daniel O'Connor (15:39)
We saw four risk factors early: mineralogy/metallurgy, separation, permitting, and capital. Separation is the top bottleneck outside China, and it’s solvent extraction, same as China — correct?
Mel Sanderson (16:53)
Yes. Like copper, it’s crush, grind, and solvent extraction — the three key initial steps.
Daniel O'Connor (17:14)
So what’s the number-one risk now for investors?
Mel Sanderson (18:15)
Capital — attraction, retention, mobilization — for us and every company in this space. Mining has a long lead time to payback, and there’s no changing that. Wyoming helps: broad support, and building the Cowboy State Mine on state land means permitting in three to five years instead of 10 to 15. But most Americans aren’t pro-mining, so a portfolio manager hears, “I don’t believe in mining companies.” Government financing, unthinkable as a foundation five years ago, is now treated as a crucial first layer. We’ve got the hard problems licked and the right people in place; with more capital we could really move. But money’s the problem.
Dustin Olsen (24:17)
You also co-chair the Critical Minerals Institute — are there policy roadblocks too?
Mel Sanderson (24:42)
It’s a problem of knowledge. Government has experts in fluorite, manganese, copper — but rare earths are new as a priority, so there aren’t many experts on what a good project looks like. We don’t have a century of experience like copper. CMI, an international body of experienced experts, works to close that gap so taxpayer money backs the best projects.
Dustin Olsen (26:39)
At the CMI summit in Toronto, Mark spoke about building America’s rare earth powerhouse. What’s the core argument?
Mel Sanderson (26:50)
Provide as many links in the chain as possible — beyond concentrate to oxide tailored to end users, since semiconductors, robotics, and satellites all need different purities. Ideally we want a magnet-making partner so we’re a secure U.S. supplier from rock to magnet. The longer a chain, the more vulnerable — a COVID lesson. There’s no more secure supply chain than mined and made in America.
Daniel O'Connor (29:36)
End users — autos, drones, robotics — still treat these inputs as price, not strategy. Thoughts?
Mel Sanderson (30:44)
The front office isn’t getting the right information. Insurance is a huge uncounted cost — ship through the Strait of Hormuz and it’s astronomical, if you can get it at all. There’s also failure to deliver: a cut chain means contractual penalties and reputational damage. And we have a China deadline — the Trump–Xi détente ends in November, and worst case China dials back sharply. Meanwhile China is cracking down on smuggling, closing the rat holes that let firms patch supply. When you stack it all up, the so-called green premium that supposedly makes Western production too expensive suddenly becomes anything but cost-prohibitive.
Mel Sanderson (35:23)
I’d add a third timeline — the quarterly one. Quarter-over-quarter profit expectations distort business, and political logic is always short-term; a mine takes three to five years just to build. It’s a problem of education: it’s hard to tell the truth when it sounds like all bad news.
Mel Sanderson (39:37)
At the federal level we lack a targeted investment strategy for each link in the chain. States attract end users — Arizona landed Taiwan Semiconductor — and the federal government should incentivize magnet makers, semiconductor makers, and advanced materials. We need an industrial strategy, and we don’t have one.
Dustin Olsen (40:48)
Great conversation, Mel — thank you for round two on your company, CMI, and the policy picture. We’d love to have you back.
Mel Sanderson (41:34)
Thank you, guys — happy to come back anytime.
