Hochschild buys Chilean rare earth deposit for $56m

The miner said it was buying the 93.8% of the BioLantanidos deposit that it did not own after investing $2.5m in the project during 2018 and early 2019 in exchange for a 6.2% equity stake with an option to increase ownership.

BioLantanidos is a private Chilean company controlled by private fund FIP Lantanidos and managed by private equity firm Mineria Activa.

The deposit had a high concentration of key rare earth minerals with permanent magnetic properties and offered “highly attractive enhancement properties” for end uses in motors for electric vehicles and wind turbines, the company said in a statement.

“Although the amount invested represents a small percentage of Hochschild's current precious metal revenue and market capitalisation, it provides significant optionality in a market expected to grow exponentially,” it added.

The project consists of ionic clay resources, similar to those found in China, a major producer of rare earth minerals.

“Mineralisation occurs from the surface to 20-30 metres deep and mining will not require explosives,” Hochschild said.