Australia's Ionic Rare Earths hopes to make a final investment decision by the second half of next year on its Uganda project and could spend $120-million to develop it after that decision has been taken, an executive said on Tuesday.

The Makuutu Rare Earths Project is Uganda's first commercial rare earths project, located about 120 kilometres from the capital Kampala in the east of the country.

Rare earths are critical to industries like electric mobility and other new technologies powering the global energy transition. Western governments are keen to ease their dependence on China, who dominates production of the minerals.

"We're looking at probably an investment decision (in) second half of next year," Tim Harrison, Ionic Rare Earths managing director, told Reuters in an interview.

"If we make an investment decision in the second half of 2024, then we would anticipate first production coming online late 2025."

Harrison said the company would consider getting a strategic partner to raise money for the project.

Ionic Rare Earths bought 60% equity in the Makuutu project from Ugandan company Rwenzori Rare Metals in 2019, and Harrison said it had the potential to produce 5 million tonnes of rare earths ore per annum.