Highlights
- Ionic Technologies receives £11M funding to develop a circular rare earth magnet recycling process for the UK’s EV industry.
- Project involves major partners like Ford, Bentley, and Vacuumschmelze to create a domestic REPM supply chain.
- Initiative aims to reduce CO₂ emissions and mitigate supply chain risks ahead of China’s REPM export halt in 2025.
In a bid to localize and “de-risk” rare earth permanent magnet (REPM) supply chains, the UK government has awarded £11 million (~A$22.6M) in DRIVE35 funding to Ionic Technologies, the Belfast-based subsidiary of Ionic Rare Earths Ltd (ASX: IXR, OTC: IXRRF). This flagship investment supports the CirculaREEconomy, a three-year project aimed at establishing a domestic, circular REE-to-magnet supply chain that will supply the UK’s electric vehicle (EV) industry.
The initiative features a formidable cast, including Ford, Bentley, Wrightbus, Less Common Metals, European Metal Recycling, and the British Geological Survey, with magnet fabrication provided by German titans Vacuumschmelze and GKN Powder Metallurgy. At its core: Ionic’s patented long-loop hydrometallurgical recycling process, capable of extracting high-purity NdPr, Dy, and Tb oxides from end-of-life magnets.
Opportunity
From an investor’s perspective, this marks a clear validation of Ionic Technologies’ commercial trajectory. The company receives £ 3.1 million directly, positioning it to scale its Belfast demonstration plant toward commercial status and potentially attract follow-on capital via the UK’s Automotive Transformation Fund. (opens in a new tab)
The strategic logic is strong. With China halting REPM exports in April 2025, OEMs and governments are scrambling to find an ex-China magnet supply. Ionic’s process boasts 61% lower CO₂ emissions vs. primary mining, aligning with UK net-zero and EV industrial policy. If scalable, this model could unlock licensing, expansion (e.g., in Brazil, the US), and OEM offtake deals.
Risks
Despite the tailwinds, execution risk is substantial. The plant is still pre-commercial, and while partnerships abound, there’s no formalized offtake—at least not memorialized and publicized, yet. The supply chain also leans heavily on German manufacturing. Can this really be called a UK-based solution?
Furthermore, with only ~£3.1M in direct funding, Ionic must still raise significant capital to scale. And while “circular economy” is politically in vogue, a true magnet-to-magnet closed-loop scale remains unproven in the West.
Final Take
For investors, this is a strong policy signal, not yet a commercial validation. Ionic has political tailwinds, a proprietary tech advantage, and the right partnerships, but is still pre-revenue. Investors should watch for upcoming offtake announcements, Belfast commercial plant funding, and early LCM or Ford magnet delivery milestones.
REEx Investor Signal: Watchlist upgrade. High-risk, high-potential recycling plays in the rare earth magnet supply chain realignment.
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