Pensana the firm behind the operation, confirmed work was underway following a successful £15 million premium equity raise which was strongly supported by the company’s major shareholders.
The plant would be the first major rare earth separation facility to be constructed in over a decade and the first to be located in a freeport.
Rare earth is a crucial component in the magnets used in both the offshore wind and electric car industries.
Once operational it is set to create 100 director jobs with many more in the supply chain.
Paul Atherley, Chairman of Pensana, said: “Demands for more secure and responsible supply chains, higher prices on carbon, and policies such as the border carbon adjustments are setting the stage for greater transparency and traceability in minerals and metals - enablers of the global energy transition.
“The Humber is already the UK’s busiest port complex the freeport status with its customs and tax incentives aimed at levelling up provides the opportunity to establish the world’s first rare earth processing hub within an economic enterprise zone, with the benefits of frictionless trade with Europe and the rest of the world.
“We continue to work closely with our application for funding from the Automotive Transformation Fund, a long-term programme designed to enable the UK to build the world’s most comprehensive and compelling electrified vehicle supply chain, supporting over 160,000 jobs.”
Pensana is aiming to establish Saltend as an attractive alternative to mining houses who may otherwise be limited to selling their products to China, having designed the facility to be easily adapted to cater for a range of rare earth feedstocks.
It plans to ship in the raw materials it needs from Angola in West Africa.