As the clean energy boom drives up the price of critical minerals, a resource company incorporated in B.C. is planning to go public on the Toronto Stock Exchange to fund the development of a Chilean property it says is rich in rare-earth elements.

In a preliminary prospectus filed Monday, Aclara Resources— a holding company for a Chilean subsidiary, REE UNO Spa, with an office in Vancouver—did not disclose how much money it is looking to raise in the IPO. RBC Dominion Securities and Canaccord Genuity are leading the syndicate of unnamed underwriters.

“The global transition to clean energy has helped to drive an expanding market for [rare-earth elements] due to their valuable properties and we believe that this trend will continue,” said Aclara, which owns the rights to mine more than 451,000 hectares in various parts of Chile.

Rare-earth elements are used in the manufacture of electric vehicle drivetrains and wind turbines, and demand for them has grown quickly as the world shifts to greener energy sources in an effort to limit global warming and stave off the impacts of climate change. Some rare-earth elements reduce the weight and cost of batteries, and reduce the need for lithium, cobalt and nickel, Aclara said in its prospectus. The company believes prices for the elements will keep rising, and it is entering the capital markets as EV industry leaders like Tesla’s Elon Musk are pushing for alternatives to cobalt and lamenting the short supply of nickel.

Aclara did not immediately respond to a request for comment.

It is now looking to start developing a plot of land it calls the Penco Module, in the Biobío Region of Chile. The company says the area “has ionic clays that are rich in” rare-earth elements.

Production of rare-earth elements is often challenging, as they’re often processed from ores containing radioactive elements such as thorium or uranium, the company said. But ionic-clay deposits tend to be close to the surface, simple to excavate and easily processed.

Aclara expects it needs about US$129 million to start operations there in 2023 and estimates it will begin commercial production in 2024. The mine is expected to operate for 12 years.

The company has reported a loss from continuing operations for the past three years, with a US$791,000 loss in 2020.

“Ionic-clay deposits, such as Aclara’s Penco Module, are rarely found outside of China,” which has “dominated” rare-earth-element extraction and production since the 1990s, it said in the prospectus. China is the largest producer globally, responsible for more than 60 per cent of annual production, according to Natural Resources Canada. The country produced an estimated 132,000 tonnes in 2019. The U.S., Myanmar, Australia and India produce much of the remainder.

The increase in demand, and a single country’s dominance as a producer, create “optimal conditions for supply chain disruptions,” according to the prospectus. Though Aclara said in the prospectus it could make use of Chinese refineries, it also said its “objective is to become a strategic non-China based supplier” of four rare-earth elements. It claims the Penco Module can contribute about two per cent of the world’s production of one of those four elements, dysprosium.

While Canada has its own rich deposits of rare-earth minerals, it doesn’t yet have any active producers. With geopolitical tensions as well as rising prices, companies like Torngat Metals in Quebec are trying to establish themselves as domestic alternatives to Chinese suppliers.

As it develops the Penco Module, Aclara also hopes to find other development opportunities on its hundreds of thousands of acres in Chile. “We believe there to be strong potential for the remaining land package to host additional ionic-clay [rare-earth-element] deposits,” it said. It has identified about 12,100 hectares in one area and about 3,800 in another to explore, and believes “additional target areas” exist within its land.