The Citizens Advisory Review Committee on Wednesday unanimously approved a request for $326,800 in LB840 funds to support a startup company planning to launch a pilot program in Beatrice next year.

In November, Rare Earth Salts announced its plans to establish a pilot operation in the Gage County Industrial Park and a wet/dry lab in the Beatrice Business Campus.

The company’s CEO, Allen Kruse, said Rare Earth Salts has developed a new technique to harvest rare earth elements – which are primarily used in electronics and other high-tech devices – from would-be mining waste around the globe.

During the pilot program, mining waste will be brought to the plant for the process to be executed on a small scale, before efforts are amplified into a large-scale commercial operation.

Rare Earth Salts is working closely with the NGage economic development group in seeking the funding, which was requested in two applications.

The first request for $76,800 is a year’s rent at the business campus in west Beatrice. The location has been essentially vacant since the building was constructed 10 years ago, but now hosts a wet/dry lab to be used by Rare Earth Salts.

The second request made was for $250,000 to be distributed to Rare Earth Salts in three increments, and the total amount is tied to job creation and capital improvements.

The first $100,000 would be given to Rare Earth Salts as soon as the application receives final approval and would assist in “speed to market” and be used for incentive packages to draw employees.

The second phase of $75,000 would be for the creation of four additional jobs by April 1, 2015. These jobs would include a chemical engineer, inorganic engineer and two lab technicians. The second phase of funds would also be contingent on the company raising $6 million in capital by April of next year.

The final $75,000 would be for creating four more jobs by July 1, 2015.

These would include an electrical engineer, analytical engineer and two additional lab technicians. Rare Earth Salts currently has eight employees.

If the company is sold or moves operations out of the County, it would be required to repay the $250,000.

Approved by the voters in 2012, LB840 allows the city to collect $250,000 annually from 50 percent of one half of a one percent city sales tax to be used for economic development improvements.

City Administrator Tobias Tempelmeyer said there are currently $1.1 million in LB840 funds available.

Glennis McClure, executive director of NGage, said backing Rare Earth Salts comes with inherent risks, but also the potential to bring a high-tech industry to Gage County.

“The NGage board knows with any new business there are risks involved,” she said. “We also believe there can be rewards in this whole deal. They already have investors in Rare Earth and those investors have looked at the risks and rewards.”

Kruse said at the meeting it will take an estimated $10 million to get the pilot program up and running. Of that, $3 million has currently been raised. He added the company doesn’t expect to see a profit until the process is commercialized, which could happen as early as 2016.

The commercialization process is estimated to cost $50-60 million.

The Citizens Advisory Review Committee approved both applications unanimously 3-0, with members Terry Doyle, Barbara Johnson and Patty White voting in favor. Member John Russell, was absent and chairman Grant Jones declined to vote or participate in the discussion, citing a conflict since he’s also on the NGage board.

The applications will now be considered for final approval by the Beatrice City Council at its Monday meeting.

McClure said positions at Rare Earth Salts will have a $50,000 average salary, and such higher-paying jobs are what the area needs.

“As I looked at LB840 – and I think this is what’s key to our group in accepting their request to bring this forward – priority should be given to employment jobs that are above average-wage jobs,” she said. “I think that’s what we have in this situation. It’s bringing above average wages and benefits to the community.”

According to McClure, the average income for the area is $35,620 per person.

Kruse previously said a typical mining operation extracts waste material from the mine with a concentration of 7-8 percent of rare earth elements and Rare Earth Salts has developed a cost-effective way to extract even smaller percentages.

In late October, Rare Earth Salts announced a joint development agreement with what it claims to be one of the 10 largest mining companies in the world. That company remains confidential.

Kruse told the Committee Wednesday the company’s process for extracting the elements was built on previous techniques.

“We have developed a technology that is based on known technologies,” Kruse said. “We basically took what was working in other sectors and applied it to this. What that has allowed us to do is reduce the capital costs to be able to get into production, reduce the operating costs as well as provide a level of risk reduction to our investors and partners that our technology will be able to scale to an industrial level.”

Kruse added Rare Earth Salts could eventually employ more than 100 workers in Gage County.