Construction of the site is expected to cost £160 million and will benefit from tax, customs and infrastructure planning benefits via the UK's freeport system, Peak Resources said.
“This is a significant milestone for Peak [Resources] and our strategy to become one of the major integrated producers of neodymium-praseodymium (NdPr) oxide outside of China,” managing director Bardin Davis said.
Peak Resources currently operates the Ngulla Rare Earth project in Tanzania, East Africa, which is expected to produce 32,700 tonnes of 45% purity rare earth concentrate when fully up and running. The company said it will ship the concentrate from Tanzania to Teesside.
Demand for rare earths is rising, particularly for magnet rare earths, including neodymium, praseodymium, terbium and dysprosium, which are used in new energy vehicles (NEVs) and wind turbines.
Australian rare earth miner Lynas reported the average price of NdPr at $68.2 per kg in the first three months of 2021, compared with $35 per kg a year earlier.
The UK has become a key hub for rare earth magnet demand, due to the rapid expansion of its wind power capacity, with UK prime minister Boris Johnson pledging to power all UK homes using wind power by 2030.
Peak Resources will build the UK's first rare earths refinery after the Australia-listed mining company took out a £1.85-million ($2.63 million) lease on a production site in Redcar on the River Tees in North Yorkshire, England.