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Serra Verde uses digital twin models to manage rare earth plant risks

The insurer-focused risk framework targets forecasting plant performance, capital needs, and exposures in a process with no operational precedent, where errors can cascade through chemical and mechanical steps.

Reported · Written up by our desk · Industry & Deals

Serra Verde Group is applying a digital twin approach to risk and insurance management for ionic clay rare earth processing, aiming to better forecast performance, capital requirements, and exposures for a plant with no precedent, according to Risk All Stars.

The article says the industry has historically relied on static engineering models, such as spreadsheet mass balances built on single-point averages, but that approach cannot represent the dynamic, compounding variability seen in real operations. Risk and insurance leader Alex Sidorenko, head of risk and insurance at Serra Verde, argues that dynamic variability only becomes understandable when the system is simulated as it behaves, noting that “static models cannot see dynamic risk.”

It adds that the processing chain is driven by sequences of chemical and mechanical steps where variability in ore characteristics, equipment performance, and environmental conditions compounds across stages. The piece warns that a shortfall in one stage can cascade downstream, affecting design choices, capital allocation, insurance valuations, and even the viability of off-take commitments.

To address those stakes, Serra Verde rebuilt its modeling approach from scratch across operational, engineering, mining, and risk teams, the article says, commissioning a first-of-kind processing plant in a supply chain diversification push for secure rare earth sourcing.

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