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A company that intends to build a rare earths mine in northeast Wyoming announced today it’s cutting more than half of its staff and scaling back as it continues to try to get the project in the ground.
“[The austerity] is a means to help get us through until market conditions improve or we can find a strategic partner,” a spokeswoman said in an email. “Having a draft environmental impact statement would definitely help with a strategic partner because everyone we talk to understands how critical it is for us to move the project forward.”
Rare Element Resources, based in Lakewood, Colorado, has asserted that the mine would combat a virtual Chinese monopoly on rare earth mineral production, which is important since rare earths are used heavily in electronics like smartphones, televisions and even cars. The company in recent months scaled back the intended size of the mine to try to lure in more risk-averse investors, but the project has been wallowing in permitting problems and adverse market conditions. Those conditions have tipped the only rival U.S. mine into bankruptcy and closure.
To combat its own problems, the company in a release said it has made “significant staff reductions” and taken other austerity measures, like facility consolidation, familiar to cash-strapped companies. It blamed the cuts on “prolonged weak market conditions” and delays in federal permitting. Robbin Lee, a spokeswoman for the company, said Rare Element had 16 employees at the end of September, but will have only seven by year-end.
“Many, like myself, are going to continue to try and help move the project forward in a consultant role,” Lee said. “We all believe in the importance of the Bear Lodge Project and hope to see it go into production one day to help meet America’s need for rare earth for manufacturing.”
Likewise, the company consolidated three facilities in Sundance down to one and will look into telecommuting for its Denver employees or a smaller space.
The company also plans to delist shares from the TSX before the end of the year after considering expenses associated with the listing. It will continue listing its common shares on the New York Stock Exchange MKT under the ticker symbol “REE.”
“We strongly believe in the strategic importance of the Bear Lodge Project and its obvious role as a cornerstone to re-establishing a domestic rare earth supply chain,” said President Randall Scott in the release. “Unfortunately, the rare earth market continues to suffer from many of the short-term issues impacting the greater global resource market.”
Those problems coupled with others stemming from final hurdles in the draft environmental impact statement drove the cuts.
“The delay in getting the DEIS meant we couldn’t provide the market with any kind of schedule for when the project would be in production,” Lee said. “The one thing the market hates is uncertainty. The natural reaction when something takes so much longer than original anticipated is that something is wrong.”
Scott said the cuts position the company to move forward quickly when conditions improve.
The mine, if it ever gets in the ground, would be about 25 miles as the crow flies from Devils Tower.