London, October 17th (Argus) - Pensana, a mining developer based in the UK, has cancelled its plan to build a rare earth refinery near Hull in East Yorkshire because the company intends to shift its focus to the United States.
Pensana is developing a rare earth project worth $325 million in Angola, including an open-pit mine, a concentrator plant and a recovery plant, tailings storage facilities and other infrastructure.
The Longonjo project is expected to produce 20,000 tons of mixed rare earth concentrate annually. The company began building the rare earth refinery in Angola in the first half of 2025 and is expected to start delivering in 2027.
Pensana intends to develop downstream separation capabilities at the Saltend Chemicals Park in the UK. The facility will produce 12,500 tons/year of rare earth oxides and 4,400 tons/year of praseodymium-neodymium oxide. The company also plans to develop a metal chemical plant at the Yorkshire Energy Park, with an annual production of 4,000 tons of praseodymium-neodymium alloy.
In 2022, the British government committed to providing strong support for the Saltend refinery as part of its key minerals strategy.
But according to Paul Atherley, the chief executive of Pensana, the investment ultimately amounts to only £5 million (US$6.7 million). Atherley said that until the US government announced an agreement with US rare earth producer MP Materials earlier this year, the project was basically dormant.
In July this year, the US government committed to providing at least $400 million in support to MP Materials, including guaranteed purchase agreements and a minimum price. The minimum price was to protect the project in case of a further price drop.
The Mountain Pass deal prompted Pensana to reposition its rare earth project towards the United States, and it is currently in discussions with multiple parties, including the US government.
Atherley told Argus: "We are still seeking downstream refining operations, but we will reposition towards the United States because there is funding there."
Pensana hopes to obtain a commitment similar to the Mountain Pass deal from the US government, although it has not yet reached an agreement with the US. Atherley said that the price determined by the partnership between the US government and MP Materials has reset the price of rare earths to a realistic level, which will enable similar projects in the United States to obtain financing.
Pensana is seeking partnerships in the United States. In June 2025, Pensana and the US rare earth refining company ReElement Technologies proposed a deal to purchase up to 20,000 tons/year of mixed rare earth concentrate from Longonjo over a five-year period. Pensana also announced that it would list on the Nasdaq Stock Exchange.
The Mountain Pass agreement is an important measure by the US government to support domestic and Western rare earth production, with the aim of reducing China's dependence on rare earth supplies.
On October 9th, China announced further export controls on all medium and heavy rare earth elements.
Export controls have raised the prices of controlled rare earths outside China. On October 16th, Argus assessed the price of erbium oxide at $130-150 per kilogram, rising by 160% within a week, mainly a quick response by the market to China's implementation of export controls.
However, if China's export controls are relaxed, the prices of rare earths outside China may fall, posing significant risks to rare earth projects outside China.
