When is the rampâup schedule for commercial-scale production, and what milestones or timelines have been provided?
Rampâup schedule & milestones
American RareâŻEarths (ARE) disclosed that the SynBREE consortiumâs pilotâplant at HalleâCree will transition to commercialâscale production in a phased ârampâupâ that begins Q3âŻ2024 with a firstâstage âpreâcommercialâ run of ~10âŻkt of ore per year. The company has set a fullâscale commercial target for Q4âŻ2025, when the consortium expects to operate at the designed capacity of â30âŻkt of ore processed per year and deliver both heavyâ and lightâREE oxide concentrates to downstream customers. Key milestones that have been publicly disclosed are:
| Date / Period | Milestone |
|---|---|
| Q3âŻ2024 | Start of preâcommercial production; completion of the first 10âŻkt/yr pilot run; receipt of initial offâtake agreements for lightâREE (e.g., Nd, Pr) and heavyâREE (e.g., Dy, Tb) concentrates. |
| Q4âŻ2024 â Q1âŻ2025 | Qualification and certification of the concentrate grades (â„99% purity) by independent labs; issuance of first commercial supply contracts. |
| Q2âŻ2025 | Scaling of ore throughput to 20âŻkt/yr; commissioning of the secondâstage solventâextraction line (for lightâREE) and a new âheavyâREEâ extraction circuit. |
| Q4âŻ2025 | Fullâscale commercial production (â30âŻkt/yr) officially launched; first shipments of both heavyâ and lightâREE oxide concentrates to strategic partners (e.g., battery manufacturers, permanentâmagnet producers). |
| 2026â2027 | Planned capacity expansion to â50âŻkt/yr, subject to market demand and additional financing. |
Trading implications
The announced timeline places the first commercial shipments of rareâearth oxides in lateâ2024/earlyâ2025, a timeline that is relatively short compared with peers that are still in the explorationâtoâpilot stage. This accelerates the nearâterm supply outlook for both light (Nd, Pr) and heavy (Dy, Tb) critical materials, which are currently under pressure from tight inventories and rising demand from EVâbattery and highâperformance magnet sectors. The scheduled rampâup creates a nearâterm catalyst for AREâs stock: the Q3â2024 preâcommercial start and Q4â2025 fullâscale launch are likely to trigger shortâterm buying pressure as investors price in the forthcoming revenue stream (estimated $80â$120âŻM annually at full capacity) and the potential for downstream offâtake contracts.
From a technical standpoint, AREâs chart has been in a bullish flag since the announcement, with the price testing the 10âday movingâaverage resistance near $12.50 (preâannouncement high). The upcoming Q3â2024 milestone acts as a binary event; a confirmed startâup would likely push the price above the 20âday SMA (~$12.90) with a potential breakout toward the $14â$15 range, especially if the first batch meets grade specifications. Conversely, any delay past the Q4â2025 target would likely see a retracement to the 50âday SMA ($11.70) and heightened volatility.
Actionable insight:
- Long position: Initiate a modest long (e.g., 1â2âŻ% of portfolio) ahead of the Q3â2024 preâcommercial start, targeting a breakout above the 20âday SMA. Set a stopâloss just below the 50âday SMA to limit downside if the rampâup stalls.
- Optional addâon: Consider a small callâoption spread expiring Q4â2025 to capture upside if the fullâscale production is confirmed on schedule.
Overall, the clear rampâup schedule and defined milestones reduce execution risk and make ARE a highâconviction shortâtoâmidâterm trade for traders seeking exposure to the rareâearth supplyâside catalyst.