Hochschild Mining joined the race to extract vital components for consumer electronics today as the company penned a $56m deal.
London-listed Hochschild said it would buy a 94 per cent stake – it already owns the rest – in a rare earth materials mine in Chile.
“The investment is … the result of an extensive long-term project to identify commodities with very strong growth characteristics as well as our ability to discover regional investment options that might not otherwise be available,” said chief executive Ignacio Bustamante.
Hochschild invested $2.5m (£2m) in 2018 and early this year, buying just over six per cent of the shares in the Bio Lantanidos deposit.
The site is rich in rare earths, a vital component in smart phones and other electronics. China dominates production of the 17 materials which are also vital for some military equipment and medical devices.
In 2017 the country produced more than four fifths of the world’s rare earths, and supplied 78 per cent of US imports, according to data from Research and Markets.
Hochschild said the rare earths at its new Chile site is found in clay similar to that in China, but different to almost everywhere else in the world. Extracting it is cheap, and does not need explosives, the company said.
Bustamante said the site was a “unique deposit” in an industry which is expected to grow exponentially.
“We are also excited by the strong geological upside potential which could see the company become a relevant player in the global rare earth market,” he added.