NioCorp’s Strategic Pivot to Defense Critical Minerals: A Geopolitical Play with Strong Financial Legs

The U.S. defense sector’s growing reliance on imported critical minerals—particularly rare earth elements—is a vulnerability that NioCorp Developments Ltd. (NASDAQ: NB) aims to address head-on. The company’s participation in the Aviation Week Network’s 2025 Defense Conference in Washington, D.C., on May 13–14, underscores its role as a key player in reshaping America’s supply chain resilience. As geopolitical tensions with China escalate, NioCorp’s Elk Creek Critical Minerals Project emerges as a strategic asset with both national security and investment implications.

The Geopolitical Imperative: China’s Stranglehold on Critical Minerals

China currently dominates 85% of global rare earth production, including heavy rare earths like dysprosium and terbium, which are essential for producing neodymium-iron-boron (NdFeB) magnets used in defense systems, electric vehicles (EVs), and renewable energy infrastructure. Beijing’s recent threats to restrict exports of these minerals have sent shockwaves through U.S. defense planners. At the upcoming conference, NioCorp’s Chief Communications Officer, Jim Sims, will discuss how its Elk Creek Project can mitigate this risk. The project is designed to produce niobium, scandium, titanium, and rare earth oxides—minerals classified as “critical” by the U.S. Department of Defense—on American soil.

Elk Creek’s Financial and Technical Viability

The Elk Creek Project’s updated feasibility study, completed in early 2025, highlights compelling economics:
- $2.8 billion pre-tax net present value (NPV) with a 29.2% internal rate of return (IRR).
- A 38-year mine life, producing an average of $403 million in annual EBITDA.
- A focus on high-value co-products, including niobium oxide (for superalloys) and titanium tetrachloride (for industrial uses).

The study also incorporates a 12-week drilling campaign to upgrade resource categories, a critical step toward securing up to $800 million in debt financing from the U.S. Export-Import Bank (EXIM).

Strategic Partnerships and Dual-Use Applications

While NioCorp’s direct defense contracts remain unannounced, its collaboration with Stellantis—a $2 billion deal to supply rare earth minerals for EV production—hints at broader industrial relevance. EVs and defense systems share overlapping needs for NdFeB magnets, positioning NioCorp as a dual-use supplier. This synergy reduces the company’s reliance on volatile defense spending cycles.

Risks and Challenges

• Financing Uncertainty: EXIM’s approval timeline and terms are pivotal. Delays could push the project’s construction start into 2027 or beyond.
• Metal Price Volatility: Critical minerals like niobium and scandium are subject to swings tied to global industrial demand.
• Regulatory Hurdles: While permits are secured, environmental opposition could arise, particularly around groundwater protection.

Conclusion: A Geopolitical Play with Strong Upside

NioCorp’s strategic pivot to critical minerals for defense and advanced manufacturing aligns with a clear U.S. policy priority: reducing reliance on adversarial nations. With a robust NPV, shovel-ready infrastructure, and partnerships like Stellantis, the Elk Creek Project is not just a mining venture but a linchpin of national security.

For investors, the $800 million EXIM loan is the key inflection point. If secured, NioCorp’s stock (NB) could see a valuation uplift akin to peers like MP Materials (MP), which benefited from U.S. rare earth production incentives. With a current market cap of $350 million and a potential mine life generating billions in revenue, the risk-reward calculus leans strongly toward upside—if geopolitical tailwinds hold.

In a world where minerals are the new battleground, NioCorp’s timing couldn’t be better.