Energy Fuels Inc. announced a significant step forward for its Toliara critical minerals project in Madagascar with the signing of a Memorandum of Understanding (MOU) with the Madagascar government. This agreement outlines key terms for the project's development, paving the way for a potential $2 billion investment, according to industry analysts.

The news comes after the Madagascar Council of Ministers lifted a suspension on the Toliara project in November 2024. This allows Energy Fuels to resume development activities, re-establish community programs, and work towards a final investment decision (FID) expected in approximately 14 months.

The MOU establishes a framework for a long-term partnership between Energy Fuels and Madagascar.

Energy Fuels has committed to a 5% royalty on mining products from the Toliara project in Madagascar. Additionally, it will invest US$80 million in development, community, and social initiatives, including an immediate $30 million post-certification, a $10 million investment upon a positive final investment decision, and a $40 million commitment by the fourth year of operations. The company will also invest $1 million in social programs pre-FID and $4 million annually thereafter, indexed for inflation. To ensure long-term financial and legal stability, both parties will collaborate on a "Stability Mechanism." This could involve parliamentary approval of an Investment Agreement, amending mining legislation for large-scale projects, or other suitable measures.

Mark S. Chalmers, President and CEO of Energy Fuels, emphasized the project's potential benefits for both parties. He stated, "The Toliara Project is a 'generational' critical mineral project... It is vital... that the Republic of Madagascar and the communities... enjoy significant benefits." The MOU is seen as a win-win, creating jobs, fostering economic development, and promoting environmentally and socially responsible mining practices.

Government Commitments

The Malagasy government has pledged its support for the Toliara project by assisting with permit approvals for REE recovery and project development. They will maintain fiscal, legal, and customs stability, while refraining from taking ownership of the project. The government will also publicly support the project and collaborate on potential mining legislation amendments to ensure its bankability.

Energy Fuels is a leading U.S. critical minerals company focused on uranium, REEs, heavy mineral sands (HMS), vanadium, and medical isotopes. They are the top domestic producer of uranium concentrate for nuclear energy and operate several uranium projects in the western U.S. They also own the White Mesa Mill in Utah, the only fully licensed conventional uranium processing facility in the country. At the Mill, they produce advanced REE products, vanadium oxide, and are preparing to recover medical isotopes. Energy Fuels holds the Toliara Project in Madagascar, the Bahia Project in Brazil, and the Donald Project in Australia, where they can earn a 49% interest.