OMAHA, Neb. (AP) — A mining company that wants to extract a collection of rare elements from beneath southeast Nebraska raised funds Wednesday toward its goal of finding the $1.1 billion it needs to build the mine that has been in the works for decades.
Shareholders of a special purpose acquisition company called GX Acquisition Corp. II overwhelmingly approved merging with NioCorp, a Centennial, Colorado-based mining company, according to a regulatory filing. About $15 million from the deal will go to NioCorp, the company said.
The GXII deal involves one of the risky shell companies once popular on Wall Street before many fell out of favor and had to be liquidated before they ever completed a deal. The SPACs, as they are known, are essentially companies created solely to merge with another business to invest in it.
NioCorp shareholders also approved an $81 million financing deal with Yorkville Advisors Global last week.
But the mine the company hopes to build about 80 miles (130 kilometers) south of Omaha near the town of Elk Creek could get an even bigger boost later this year. The Export-Import Bank of the United States recently issued a formal “letter of interest” saying that NioCorp may qualify for up to $800 million in financing. If that comes through after the bank conducts a detailed review of the project, NioCorp would have enough cash to build the mine.
First the project will have to undergo at least six to nine months of review by the bank. The letter from the Export-Import Bank is just a preliminary step, but it has NioCorp officials extremely optimistic.
“It’s unbelievably exciting. Sleep is a little hard to come by for our team right now,” NioCorp CEO Mark Smith said. “We see what’s happening and this project is actually going to happen.”
NioCorp has raised more than $80 million since 2013 to explore the site, but development of the project dates back to the 1970s when a different company first started drilling samples. The proposed mine is expected to create over 400 jobs if it is built.
The main element NioCorp plans to produce is a heat-resistant element called niobium, which is used to make steel lighter and stronger. The mine could also produce scandium that can be used to make aluminum stronger and titanium that would be used in paint production. The company has said analysis of samples from the site shows there is also a significant amount of rare earth elements used in a variety of high-tech products that are primarily produced in China. But it’s not yet clear whether it will be economically feasible to mine those rare earth elements that President Joe Biden wants to see more of produced domestically.
The letter the bank issued to NioCorp is one of the first given to a U.S. project since the Export-Import Bank decided last year — in response a Biden executive order — to expand funding to domestic projects proposed by companies planning to export their products. A bank spokeswoman said NioCorp operates in an industry the bank is eager to support because so few critical minerals are produced in the United States.
NioCorp officials say getting funding from the bank, which is run by the government under congressional authorization, would help level the playing field with Chinese companies that are heavily subsidized by their government. The Export-Import Bank would likely offer better terms than commercial banks, but NioCorp continues to talk with other banks.