In part one of this series on the Elk Creek mining project, Straight Arrow News discussed the significance of the minerals that this endeavor aims to collect, why they are so crucial to U.S. interests and how their supply is largely controlled by foreign adversaries, such as Russia and China. Now, here is a closer look at how a Colorado-based company called NioCorp plans to solve this problem by building the only mine in North America that will produce the rare-earth elements of niobium, scandium and titanium in Elk Creek, Nebraska.
“Nebraska is going to be the center of a lot of attention when this mine opens up because we will not be 100% dependent on foreign sources for these minerals anymore,” NioCorp CEO Mark Smith said.
“It will distinguish Nebraska from almost every other state in the nation. It will distinguish Nebraska from almost every other country in the world,” he added.
According to local lore, discussions over the Elk Creek mining project date back to the 1970s when pilots reported their instruments went haywire while flying over the area. Researchers confirmed this phenomenon, identifying changes in the Earth’s magnetic field, indicating the possible presence of these minerals.
“The rocks are different here,” NioCorp COO Scott Honan said.
While ground is still yet to be broken on the site, NioCorp has already secured all the major local, state and federal permits required to launch construction. The company has also executed a contract with the engineering firm Zachry Group to begin the first phase of development at the location.
“We have all of our permits in place. We have our technical feasibility study done. We’ve done all the drilling to define the mineral resources,” Smith said. “We have a ways to go but the good news is people are starting to see this and are taking steps to make those changes. We’ve been preaching this for a long time without an audience. [Now] we have an audience.”
Building the mine will involve drilling about 1,500 feet underground to create a structure that will span over 60 acres.
Once the mine is up and running, it is expected to operate for 38 years, becoming one of the largest producers of scandium in the world and the only American producer of niobium.
NioCorp estimates that construction costs will require about $1 billion, and the company has been making recent steps toward achieving this goal.
In March, NioCorp shareholders approved an $81 million financing deal with Yorkville Advisors Global, while the Export-Import Bank of the United States (EXIM) issued a formal letter of interest saying the company may qualify for up to $800 million in funding.
“We are pleased to extend this Letter of Interest in support of the proposed capital funding plan by Elk Creek Resources Corp. for the Elk Creek Project,” EXIM said in its communication with NioCorp. “Based on the preliminary information submitted on expected exports and jobs supported, EXIM may be able to consider potential financing of up to $800 million of the project’s costs under EXIM’s Make More In America initiative.”
“These are hard projects to get up and running and get financed,” Smith said. “We’re actually doing it in less time than most companies do it. So we’re getting there.”
NioCorp has also received local support from both Nebraska residents and the state’s government.
Over half of the investors in the project are from Nebraska, and the state has authorized $200 million in tax breaks for the mine.
“We are very pleased to have executed contracts with the State of Nebraska under the Nebraska Advantage Act for these tax incentives,” Smith said. “The expected return on this investment to Nebraska taxpayers and state and local government is significant, since the Elk Creek Project is estimated to create hundreds of high-wage jobs in Nebraska that will span three-plus decades and is expected to inject billions of dollars into Nebraska’s economy over that period of time.”
“Hundreds of millions of dollars of cumulative new revenue to state and local Nebraska governments are expected to be generated as a result of the project,” Honan added. “We are excited to see the many beneficial outcomes to Nebraska once this project advances to full-scale commercial operation.”
Nebraska Gov. Jim Pillen told Straight Arrow News that he believes “NioCorp’s investment will be a key piece in growing Nebraska’s economy, expanding the tax base, and bringing hundreds of good-paying jobs to the state.”
Pillen has called the project “bigger than this community” and “a big deal for our country,” while also saying he has a plan to ensure that the Elk Creek initiative stays on track for success.
“The Elk Creek project is another example of our state’s resources benefiting not just our state but the whole country by bringing the mining of these rare minerals out of countries like China and into the U.S.,” Pillen said. “Nebraska continues to lead the country in providing resources to bring us closer to American energy independence.”
The mine is anticipated to provide 450 permanent employment opportunities for a town whose total population is less than a fourth of that. During the height of construction, the project could employ as many as 1,200 to 1,500 people.
“We look forward to hiring as many people as we can,” Smith said. “That should improve the lives of a lot of people out there.”
“Those are really cool things,” Pillen said. “Those are really big things, and that’s the key to our economy. That’s the key to bringing and growing our workforce.”
Although Nebraska has made several overtures to help ease the process of creating this development in anticipation of a robust financial return for the state, it remains to be seen what the ultimate environmental impact on the area will be.
NioCorp has asserted that it has worked to ensure the project will have a minimized environmental footprint. Straight Arrow News will examine those claims in the final edition of this three-part series.
