Pensana-ReElement Deal Signals Ambition, But Questions Linger

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

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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