Energy Fuels Surges 4% on Strategic Rare-Earths Deal with POSCO

Energy Fuels Inc. (UUUU) shares rose 4% on March 18, 2025, following the announcement of a strategic Memorandum of Understanding (MOU) with South Korea's POSCO International Corporation. This partnership aims to establish one of the world's first non-China rare earth magnet supply chains for electric vehicle (EV) and hybrid EV drivetrains, a move that could significantly reshape the global rare earth market.

The collaboration between Energy Fuels and POSCO is a pivotal development in the ongoing geopolitical struggle over rare earth elements (REEs). China currently dominates the global rare earth supply chain, controlling a significant portion of production and processing. This dominance has led to tensions, with China imposing bans on exporting technologies for rare earths processing and introducing stricter regulations on domestic mining, smelting, and trading. In response, the U.S. has been investing heavily in developing a domestic rare earth supply chain, including earmarking $17.5 million for rare earths and critical minerals processing technologies.



The MOU between Energy Fuels and POSCO sets out the principal terms of a collaboration that, if successful, could create a new non-China REE supply chain. Initial qualification samples of Energy Fuels' neodymium-praseodymium (NdPr) oxide, produced at its White Mesa Mill in Utah, have already met all of POSCO's applicable specifications. Under the agreement, Energy Fuels will supply a larger scale sample of NdPr oxide to POSCO, which will be processed into NdPr metal, alloy, and finished high-performance permanent REE magnets to qualify the Company's NdPr oxide for use in POSCO's traction motor cores.

Upon successful validation of the initial sample supply of NdPr oxide, Energy Fuels and POSCO will discuss the potential delivery of additional mass production supply volumes of NdPr oxide later this year for permanent REE magnet production. This could be enough to power 30,000+ EVs, which could be available to consumers later this year. The companies have also indicated their intention to discuss the potential for long-term supply arrangements, further solidifying the partnership and ensuring a steady supply of rare earth oxides independent of China.

The strategic partnership between Energy Fuels and POSCO has significant implications for the global rare earth supply chain. By establishing a non-China supply chain, validating production capabilities, and discussing long-term supply arrangements, this partnership creates a geopolitically resilient and diversified supply chain for rare earth oxides. This is crucial for the EV and hybrid EV industries, which are rapidly expanding as the world transitions to cleaner energy sources.

For Energy Fuels, the collaboration with POSCO presents several potential financial and operational benefits. The company has traditionally focused on uranium extraction and processing, and this partnership allows it to diversify its revenue streams by entering the REE market. The EV and hybrid EV market is rapidly expanding, driven by global efforts to reduce carbon emissions, and by supplying NdPr oxide to POSCO, Energy Fuels gains access to a large and growing market for rare earth magnets.

The partnership also positions Energy Fuels as a key player in the non-China REE supply chain for EV and hybrid EV drivetrains, enhancing the company's competitive advantage and attractiveness to investors. The potential for long-term supply agreements could provide Energy Fuels with a stable and predictable revenue stream, reducing the company's financial risk and enhancing its growth prospects.

However, the geopolitical landscape introduces risks and uncertainties that could impact the success of the new rare earth supply chain. China's dominance and control over the supply chain, as well as the U.S.'s efforts to reduce dependence on Chinese rare earths, are key factors in the viability and success of this new supply chain. The situation in Myanmar, where the Kachin Independence Army has taken control of the rare earth mining area and China has closed the border, highlights the potential disruptions in the supply chain.

In conclusion, the strategic partnership between Energy Fuels and POSCO is a significant step towards reducing dependency on China in the global rare earth supply chain. By establishing a non-China supply chain, validating production capabilities, and discussing long-term supply arrangements, this partnership creates a geopolitically resilient and diversified supply chain for rare earth oxides. This is crucial for the EV and hybrid EV industries, which are rapidly expanding as the world transitions to cleaner energy sources. The potential financial and operational benefits for Energy Fuels, as well as the geopolitical risks and uncertainties, will be key factors in the success of this new supply chain.