Unlocking the Rare Earth Supply Chain: Energy Fuels' Donald Project and the Path to Non-Chinese Dominance

The global race for rare earth elements (REEs)—critical to everything from electric vehicles to missile guidance systems—has just cleared a major hurdle. On June 19, 2025, Energy Fuels' Donald Joint Venture in Australia secured final regulatory approval for its Work Plan, marking the last major permit required to advance construction of one of the most strategically significant mineral projects in decades. This milestone positions Energy Fuels (NYSE: EFR) to seize a pivotal role in reshaping the $80 billion rare earth market, long dominated by China.

The Donald Project, a 49%-owned joint venture with Astron Corporation in Victoria, Australia, is now poised to break ground as early as late 2025 if financing and board approvals are secured by year-end. The project's significance extends far beyond its production targets: it represents a critical supply chain link between the U.S. and Australia, directly countering China's stranglehold on 85% of global REE production.

The Regulatory Breakthrough
The Work Plan approval, granted under Victoria's Mineral Resources (Sustainable Development) Act 1990, followed a five-year review of environmental, social, and technical factors. The project's backers demonstrated compliance with stringent requirements, including progressive land rehabilitation, water management systems, and biodiversity offsets. This clearance removes the final regulatory barrier to construction, allowing Energy Fuels to focus on securing debt financing and finalizing a Final Investment Decision (FID) by December 2025.

Strategic Significance: Breaking China's Monopoly
The Donald Project is designed to produce 7,000–8,000 metric tons of rare earth mineral concentrate annually in Phase 1, including 990 tons of neodymium-praseodymium (NdPr)—a key component of electric vehicle motors—and 100+ tons of heavy REEs like dysprosium and terbium, critical for defense and advanced manufacturing. Crucially, the xenotime-rich deposits at Donald offer high concentrations of mid- and heavy-REEs, which are increasingly in demand for applications like permanent magnets and solid-state batteries.

The processed concentrate will be shipped to Energy Fuels' White Mesa Mill in Utah, the only U.S. facility capable of separating REEs at scale. Phase 1 production aligns with the mill's current capacity, while a planned Phase 2 expansion aims to boost processing to 60,000 tons annually by 2030. This dual approach—Australian mining paired with U.S. processing—directly addresses the Biden administration's push to diversify supply chains under the Critical Minerals Policy.

Investment Implications: A Geopolitical Play with Tangible Metrics
Energy Fuels' stock has traded in a narrow range of $3.50–$5.50 per share since 2022, reflecting investor skepticism about regulatory risks and financing challenges. However, the Donald approval now shifts the risk-reward calculus. Key catalysts ahead include:
- FID by Q4 2025: A critical test of management's ability to secure financing (the project requires ~$200 million in debt and equity).
- First production in 2026: A timeline that could make Donald one of the first non-Chinese REE projects to deliver meaningful volume.
- Strategic partnerships: The U.S.-Australia Critical Minerals Partnership (2022) offers potential government support for the project's supply chain integration.

At current prices, EFR trades at ~10x its 2026E EBITDA (assuming full production), a discount to peers like Molycorp (now part of MP Materials) and Alkane Resources. However, this valuation ignores the project's geopolitical upside: if Donald succeeds, Energy Fuels could become a cornerstone supplier to U.S. defense contractors and automakers, reducing reliance on Chinese imports.

Risks and Mitigations
- Financing risks: Energy Fuels must secure $100 million in debt and $100 million in equity. The company's existing $200 million credit facility provides a starting point, but equity dilution could pressure short-term share prices.
- Operational challenges: Labor shortages in Australia and supply chain bottlenecks in mining equipment could delay timelines. The project's partners have pre-qualified contractors and stockpiled key equipment to mitigate this.
- Commodity price volatility: REE prices are tied to EV demand and geopolitical tensions. A sustained downturn in clean energy investment could reduce urgency for non-Chinese supply.

Conclusion: A Buy with an Eye on 2026
Energy Fuels' Donald Project is not just a mining venture—it's a geopolitical play to dismantle China's REE dominance. With regulatory risks now cleared, the stock's valuation gap presents an opportunity for investors willing to bet on execution.

For aggressive investors, a “buy” recommendation makes sense ahead of FID, with a price target of $7–$9 per share by 2026E if production ramps as planned. Conservative investors should wait for confirmation of financing and construction start in early 2026. Either way, the Donald Project underscores a broader truth: in the race for rare earths, the next decade will belong to those who secure supply chains—and Energy Fuels is now a contender.