Hochschild to spin out and list rare earth mining business on TSX

Hochschild Mining has announced its intention to spin out and list its Chilean rare earth unit Aclara Resources on Toronto Stock Exchange (TSX).

London-listed Hochschild said the move would allow it to tap new funding from the clean energy sector for its rare earth deposit while it continues to concentrate on its core precious metals business.

The miner acquired the deposit in Chile for $56 million in October 2019, citing an expectation for ‘exponential’ growth in the rare earth market at the time, based on the use of rare earths in electric car motors and wind turbines.

Shares in Australia’s Lynas – the world’s largest rare earths producer – have risen 55% since the start of January, while US rare earth miner MP Materials is up 17% this year.

Hochschild will continue to hold 20% of Toronto-listed Aclara, which wants to become a sustainable source of rare earth supply outside of China, according to the listing prospectus.

The 600-hectare Chilean project contains rare earth elements based in clays, which the company says are easier to excavate. The group aims to supply heavy rare earths dysprosium and terbium as well as light rare earths neodymium and praseodymium, which are all used in magnets.

It is our belief that, as two standalone businesses, both Hochschild and Aclara will have the greatest potential for delivering long-term value creation,” said the company’s chairman Eduardo Hochschild.