Highlights
- Pensana and ReElement sign MOU to create a vertically integrated rare earth supply chain.
- Potential for 20,000 tonnes MREC annual output
- Partnership aims to diversify rare earth production away from China's current 90%+ global refining dominance.
- MOU represents a promising intent but requires further validation of technical capabilities and operational milestones
A New Transatlantic Alliance Emerges
Pensana Plc’s newly announced (opens in a new tab) Memorandum of Understanding (MOU) with ReElement Technologies—via its parent, American Resources Corp (NASDAQ: AREC)—aims to create a vertically integrated, sustainable rare earth supply chain spanning Angola to Indiana. The proposed offtake: up to 20,000 tonnes per annum of Mixed Rare Earth Carbonate (MREC) from the Longonjo mine for five years, processed through ReElement’s touted “multi-feedstock” refining platform.
What’s Real? Technical and Financial Progress
There are hard facts to respect. Pensana holds a high-grade NdPr deposit in Longonjo, Angola, with financing commitments now totaling $268 million, including backing from Africa Finance Corporation and Absa Bank. The MREC output potential—20,000 tonnes in Phase 1, potentially 40,000 tonnes in Phase 2—is substantial, accounting for approximately 5% of global supply.
ReElement, for its part, has a functioning facility in Noblesville and is developing a larger plant in Marion, Indiana. Since 2023, the company has reportedly been validating products for commercial customers—an encouraging sign.
What Needs to be Vetted? Disrupting the Global Supply Chain”
ReElement CEO Mark Jensen's claim that this partnership will “completely disrupt the global supply chain for rare earth oxides” is aspirational at best. China still controls 90%+ of rare earth refining capacity globally. ReElement’s platform may be scalable, but its total oxide output remains undisclosed, and solvent-free claims, while exciting, remain unverified by peer-reviewed industrial validation.
Missing in Action: Technical and Pricing Transparency
The MOU omits any pricing benchmarks, delivery terms, or contingencies for geopolitical risk (i.e., Angola's regulatory and infrastructure vulnerabilities). There is also no mention of downstream commitments—no magnet alloying, no firm U.S. or EU offtake partners beyond vague aspirations in the defense sector.
Further, while the joint pledge to use the Lobito Corridor is pragmatic, actual rail and port logistics remain under construction and vulnerable to political risk.
Signal of Intent, But Execution Is Key
This MOU marks a meaningful intent to diversify away from China and establish an allied supply chain. But it’s a press release, not a signed offtake or operational milestone. Investors should monitor closely—but not bet the house just yet.
REEx Bias and Clarity Meter™ for Pensana Article
| Category | Evaluation |
|---|---|
| Verified Facts | Moderate-High |
| Speculative Claims | Present (e.g. disruption language) |
| Omitted Risks/Challenges | High (logistics, pricing scale) |
| Marketing vs. Material Disclosure | Skewed toward promotional language |
| Clarity and Transparency | Moderate |
| Overall integrity | B- |
This announcement contains promising foundations but leans heavily on forward-looking optimism. Readers should distinguish between declared vision and demonstrated capacity. ™ Rare Earth Exchanges Bias and Clarity Meter 2025
Might I suggest that you delve a little deeper, before identifying concerns as substantial risks, bringing up issues that are already settled ~ “Further, while the joint pledge to use the Lobito Corridor is pragmatic, actual rail and port logistics remain under construction and vulnerable to political risk.” detract from the integrity of the forum. FYI, The Lobito Rail and Port are already in operation, Joe Biden himself witnessed Copper blister being loaded for shipment to the US in Lobito Port, which had come down on the rail from Ivanhoe’s DRC mines,
Many of your points are valid, but i take issue on the points on logistics and political risk. Having spent the last 25 years in the region, i fully understand that the perceived external view of risk will be different to that views with real world experience and who are able to make decisions based on specific projects using granular and up today information, re Logistics and political risk, the comment son the railways and port are wrong, whereas i believe the credit rating agencies can give a more nuanced opinion.
The idea that the Lobito Corridor is still under construction or hampered by political risk is outdated and misleading. Since mid-2024, copper concentrate has been moving regularly from Kolwezi in the DRC to the Atlantic via the Benguela Railway, with over 125,000 tonnes already transported. The Port of Lobito is fully operational, and the first bulk vessel carrying DRC copper concentrate departed in July 2024. Container traffic is also active — AGL took over the Lobito container terminal in Q1/24 and handled its first container vessel by August. On the rail side, new container wagons began arriving in November and are already in use, with more coming every week under LAR’s 30-year concession.
Trains are running. The port is open. Containers and minerals are moving. Regarding political risk — Angola is rated B+ by Fitch and Ba3 by Moody’s, both with stable outlooks, while the DRC’s ratings have improved significantly. Backed by EU and US strategic infrastructure initiatives, the Lobito Corridor is already providing a viable, functioning route to market.
To go a little further. I’m sure Paul Atherley in a recent Crux interview spoke of containers of product being railed and shipped to Australia for testing via Lobito corridor.