As countries attempted to move towards more renewable energy sources, supply and management of critical minerals became politically and economically important. One new company operating in this high-stakes environment is Toronto-based Aclara Resources, a mining company that explores and develops rare earth mineral resources in Chile, Brazil and Peru.
Francois Motte Sauter has been Aclara's CFO since its spinoff from Precious Metals Company Hochschild Group in 2021. Operating at the intersection of clean technology, mining and critical minerals, Sauter says he focused on two things in his 15 years at Hochschild, “and Cost Control and Timely run,” but the formative lesson came in an era of extreme volatility in commodity prices, he says.
“Living through these cycles taught me to expect uncertainty and treat disciplined capital planning and risk management as everyday practices rather than as backstops,” Sauter says.
In the next interview, Sauter explains the framework for Aclara's approach to fundraising. Measure investor expectations, vertically integrate them, closely monitor capital costs, and pursue sustainability initiatives.
How does the current state of the rare earth market affect the strategies of relatively young companies?
In a high-growth environment [the one] Aclara [is in]Opportunities are immeasurable, but so are risks. The rare earth sector is moving rapidly, and it's time to establish ourselves as a global leader. This makes it important to implement, careful capital deployment and transparent investor communication.
Unlike traditional producers, we are still in the pre-revenue stage. In other words, every dollar invested must be strategic and all determined. There is no room for inefficiency. That's why we adopted a rationalized philosophy of execution in every project. Driven by data, guided by experience, rooted in a clear understanding of investors' expectations.
In many ways, Hochschild's culture has shaped the high standards I currently apply at Aclara. These principles have proven essential.
The execution remains our North Star. We measure ourselves not only by ambition, but by concrete progress. Technology validation, milestone permissions, community engagement, and ongoing cost optimization. These results speak more eloquently than forecasts and earn and sustain long-term capital partner trust.
What are the pillars of the company's overall strategy in the market?
From day one, we have seen the glare of rare earth landscapes, particularly the important role of heavy rare earth elements (HREE) and the prominent eye vision of the limited global supply outside China. We early realized that, like ours, ionic clay deposits are the main viable source. And as the world accelerates its transition to renewable energy, demand from the tier-on economy will increase dramatically. This belief has allowed us to move forward with confidence and attract investors who share their long-term outlook.
A key pillar of our strategy has secured and advanced some of the world's finest ionic clay resources. Technology can be built with time and capital, but high quality sediments are rare. Today, Aclara holds two of the top three ion clay projects worldwide. This is a strategic advantage that positions us well in a supply-constrained future.
We also placed sustainability at the heart of technology development. Our circular mineral harvesting process, which was successful on a semi-industrial scale in 2023, sets new standards for environmental management. By eliminating many of the industry's historic challenges, such as high energy use and radioactive waste, we give investors the confidence to provide both operational performance and ESG orders.
Aclara builds vertically integrated mine-to-magnetic solutions. This is a capital-intensive, high-stakes effort. Why vertical integration?
We pursued vertical integration from the start, recognizing that long-term value depends on more than resource extraction. By expanding beyond concentrates to produce rare earth oxides and alloys for permanent magnets, it can attract customers at multiple stages of the value chain, including automobiles, wind energy and the high-tech sector, and better manage commercial and financial risks.
Finally, we consider vertical integration as a necessity rather than an option. For critical minerals such as rare earths where downstream supply chains are underdeveloped or not present in many regions, it is important to establish internal capacity or strategic partnerships to process the material into finished products.
Making permanent magnets manufacturing not only creates commercial and economic value, but also expands the investor base and technology-oriented company by redefineing Aclara from mining companies.
Support from strategic governments also plays an important role. Countries like the US, Japan and the EU are increasingly seeing rare earths through supply chain security lenses. This will enhance your financing options and ultimately reduce your capital costs. At the local level, our collaborations in Chile and Brazil show how public-private partnerships, such as Mu with Goias on the Karina Project, can accelerate permissions and build trust with both the community and investors.
Building vertically integrated mining to magnetism solutions requires not only capital-intensive, but also a bold vision, long-term commitment, and the ability to inspire trust across markets and stakeholders.
How does the role of finance evolve as it evolves, especially in sectors that are redefine supply chains for geopolitical and sustainability reasons?
The role of finance in industries like ours is evolving rapidly. At Aclara, finance is not a back-office function, but a strategic driver that connects dots across sustainability, innovation, stakeholder coordination and geopolitical reality.
The environment is high stakes. Currently, we are working on four core-embedded sustainability projects (two mining and two treatment facilities) simultaneously. These are long-term capital-intensive ventures. However, given the strategic importance of rare earth elements to the economy, they are essential. In this context, finance is more than a balance sheet. It is to place the company to run, endure and guide the company.
Today's CFOs need to have a deep understanding of the entire business ecosystem, from regulatory requirements and environmental impacts to customer expectations and capital markets. This is especially true when developing differentiated models like ours. We chose far beyond environmental compliance in favor of long-term sustainability values.
How do you fund these capital-intensive projects? Do sustainable practices play a role?
At Aclara, we designed a rare earth extraction process that avoids explosives, crushing and crushing. This is usually the stage that explains the largest carbon footprint in the mining industry. We are committed to recirculating water, using fertilizer as a primary reagent, and completing planting of native species. These decisions can increase the cost of advance payments, but ultimately unlock access to ESG-sensitive investors, qualifications for green finance products, and stronger integrity with high-quality customers who prioritize sustainability.
Funding in this sector also requires creativity and agility. While traditional funding for junior mining is more constrained, the urgency of securing important minerals has opened a new, non-traditional pathway. Government-backed loans, guarantees, and grants (often long-term and low interest rates) are becoming increasingly available to companies like us, who align with the security goals of supply chains across the country. These devices not only reduce financial risks, but also increase the overall economics of the project.
In parallel, we invest a lot in innovation. It is essential to develop new processing technologies that improve recovery, reduce environmental impacts, and reduce capital strength. This is to maintain qualifying not only for operational excellence, but also for increasing funding for public and private innovation.
What advice would you offer to emerging finance leaders who are aiming to operate at the forefront of innovation and sustainability, especially in industries that are undergoing significant changes, such as energy, mining, and manufacturing?
My advice to the next generation of finance leaders is simple. Don't treat sustainability and innovation as a checkbox. From the first day, we will create the foundation for our business strategy.
The most successful companies of the future are those that incorporate environmental and social responsibility directly into operations and product design. It's much more cost-effective and ultimately more influential, creating a sustainable process from the start rather than post-introduction later. Today's real value creation means going beyond compliance to provide long-term environmental management and tangible socioeconomic benefits to the host region.
Emerging financial leaders should also lean towards technology. Innovations such as artificial intelligence, data analytics, and automation are powerful tools to enhance efficiency, quality and cost control across the supply chain. Financial experts need to understand not only how capital is allocated, but how it enables transformation.
Finally, take your time to get a thorough understanding of your supply chain. In transitional industries, interstage inefficiencies often result in loss of value. This opportunity lies in integration. It is consistent across each link and drives performance overall.
