Financial constraints force Rare Element Resources to put hold on all permitting activities
By Sarah Pridgeon
Just a week after the Draft Environmental Impact Study was released for its planned rare earth mining project in the Bearlodge Mountains, Rare Element Resources has announced that it will be putting a temporary hold on all permitting and licensing activities.
According to the company, the decision has been made in order to conserve cash. RER points to the current “difficult markets” and the challenges of raising additional funds.
“We are happy to have finally received the Draft EIS last week, but disappointed that we cannot continue at full speed on our permitting at this point. With the substantial ongoing costs of the permitting process to the company and the challenging markets for raising additional capital at this time, the board felt it was prudent to take this additional measure to conserve cash,” says Randy Scott, President and Chief Executive Officer.
“However, with the Draft EIS now completed, we are at a good point to pause until we can fully financially support our go-forward permitting efforts.”
The suspension has been done at the company’s request, says George Byers, Vice President of Government and Community Relations, and is intended to be temporary. It has been done in such a way as to allow the company to be in a good position to restart quickly when funding is secured.
“The reason we asked for a suspension and not shelving it altogether is because, if we stick it on a shelf, everything stops,” he says.
“We’re confident something’s going to happen here with us but, at least temporarily, we can’t afford to pay for activities associated with [addressing any public comments].”
RER had the same issue with the Nuclear Regulatory Commission, he adds, pointing to the high hourly fees to work on a permit and the $1 million that RER has budgeted for just that piece of the licensing.
What Byers believes to be a temporary downturn has partly happened because the Obama administration, the EPA and environmental groups have a “keep it in the ground” strategy that has contributed to the across-the-board downturn for the mineral industry, he says – and it’s working.
“We’re not the only ones in this boat,” he nods.
Outside of state licensing activities that are low or no cost, says Byers, all other permitting including the NEPA process through the Forest Service and the Nuclear Regulatory Commission have been placed on hold.
RER is not currently able to predict how long the suspension will continue, Byers says, but is hopeful that there is light on the horizon. The company is hoping for a rebound in the minerals markets and actively seeking a partner with whom to continue progressing the project.
“We’re hoping in the next three months or so – that’s what we hope, but we can’t promise anything. We would love to be able to say, but we don’t have anything concrete to hang it on,” he says.
“We’re having talks almost on a weekly basis and last week we had talks with two potential partners. We’ve had visits from other continents to us this year already, so we’re hopeful but we haven’t said eureka yet.”
Byers is adamant that this is not the end, however, and stands firm in his belief that the company has done its job to the best of its ability and is looking at a mine that could be a game-changer for the western world.
“Everything we’ve been in charge of doing, we’ve done right, on time and on schedule, budgeted, and then we’ve made something out of it. This deposit is the real deal and our technology is the real deal and this thing is not going to go away,” he says.
“We’ve now seen people say we’re one of the top four in the world based on everything we know – size, grade and what we call the elemental distribution.”
Forest Service on hold
A notice has been sent from the Forest Service to the Federal Register to withdraw publication of the Draft EIS and suspend the 45-day comment period, says Craig Bobzien, Black Hills National Forest Supervisor. The two public meetings scheduled for this week were also cancelled.
“The company will need to notify us to resume working on the environmental analysis and the Draft Environmental Impact Statement – to resume activities, basically,” says Steve Kozel, District Ranger, regarding the next steps once RER decides to resume its permitting activities.
“Depending upon the wishes of the company in regards to the project, we would have to look at the Draft EIS, determine how much time has passed and what has changed environmentally or in terms of the project itself and then make a call whether or not that Draft EIS is adequate for public release.”
It’s hard to speculate on what might have changed by the time activity resumes, he adds. It’s impossible to know whether the changes would be drastic or nonexistent.
“I think it’s going to depend upon what the resurgence of activities, what the company’s wishes are moving forward, pausing and looking at the Draft EIS and determining if it’s adequately analyzed those alternatives and the wishes of the company and then make a judgment call based on that,” he says.
In the meantime, all activity on the Forest Service’s end will cease.
“Activity is going to be suspended. We’re tidying up loose ends right now just so we can leave some good tracks once activities resume, so that we know where we left off on certain things,” Kozel says.
“Once we do get notified by the company, we can rapidly reengage with them and the host of co-operators, assess what’s changed and, based on that assessment, determine whether any modifications need to be made and then go forth and issue the Draft EIS.”
Considering the length of the Draft EIS and the amount of time it would take for a member of the public to properly review it, the Forest Service has also made the decision to remove the document from the website until activities resume.
“We wanted to mindful of what the company wanted and mindful of the public’s time, energy and effort,” he says.
RER is quick to stress that the company still believes in the importance of the project.
“We are very appreciative of our widespread support in the local communities surrounding the project and throughout the State of Wyoming, as well as of the work by the U.S. Forest Service and the EIS cooperators which got us to the recent publication of the draft EIS,” says Scott.