Turbulence continued to dominate the rare earths industry
throughout 2012 as the majority of global supply remained under
Chinas lock and key. Export quota restrictions remained
firmly in place during the past 12 months, as the Chinese
Ministry of Commerce (MOFCOM) reduced export limits by 27%
year-on-year for the first half of 2012 and withheld quotas
from more than 20 Chinese companies.
Now, the global rare earths market
appears to be stabilising. Rare earths prices have returned to
levels that could promote a return to long-term demand growth
rates and international players are begining to move into the
gap China has left in the market.
Rare earth elements, or REE, are a
group of 17 elements - including the non-lanthanides, yttrium
and scandium (see table 1). These minerals have
historically been produced in abundance in China, yet sizeable
deposits have also been explored in Australia, Brazil, Canada,
India, Malaysia, South Africa, Thailand, the US and
Greenland.
New projects in these areas have
been ramping up since the supply situation in China left rare
earths buyers no choice but to look elsewhere for supply.
Initially, hundreds of players entered the global marketplace
to fill the void, yet this number has dwindled to leave just a
few leading players.
|
|
The Rare
Earths |
|
|
Cerium Group (Light rare
earths)
|
Atomic Number
|
Valence
|
Atomic
weight
|
Oxides
|
Lanthanum (La) |
57 |
3 |
138.92 |
La2O3
|
Cerium (Ce)
|
58 |
3.4 |
140.13 |
CeO2 |
Praseodymium (Pr)
|
59 |
3.4 |
140.92 |
Pr6O11
|
Neodymium (Nd)
|
60 |
3 |
144.27 |
Nd2O3
|
Promethium (Pm)*
|
61 |
3 |
145 |
None |
Samarium (Sm)**
|
62 |
2.3 |
150.43 |
Sm2O3
|
Eurpium (Eu) |
63 |
2.3 |
152 |
Eu2O3
|
Gadolinium (Gd)
|
64 |
3 |
156.9 |
Gd2O3
|
Yttrium Group (Heavy rare earths)
|
|
|
|
|
Terbium (Tb)
|
65 |
3.4 |
159.2 |
Tb4O7
|
Dysprosium (Dy) |
66 |
3 |
162.46 |
Dy2O3
|
Holmium (Ho)
|
67 |
3 |
164.94 |
Ho2O3
|
Erbium (Er) |
68 |
3 |
167.2 |
Er2O3
|
Thulium (Tm)
|
49 |
3 |
169.4 |
Tm2O3
|
Ytterbium (Yb)
|
70 |
2.3 |
173.01 |
Yb2O3
|
Lutetium (Lu)**
|
71 |
3 |
174.99 |
Lu2O3
|
Yttrium (Y)
|
39 |
3 |
88.2 |
Y2O3
|
Also included Thorium (Th90) and
Scandium (Sc21) *naturally
radioactive;
**radioactive isotopes Sm147 and
Lu176 |
|
|
|
|
Supply to meet demand
As with many other minerals, REE
are produced for a multitude of different uses.
Traditionally, the demand for rare
earths has been driven by the end-markets needs and
specifications, which in recent years has been centred on the
subjects of environmental protection, technology and energy
efficiency markets. The most common applications within these
markets include permanent magnets, lasers, mobile phones,
tablet devices, weapon defence applications and green
technology such as electric vehicles (EVs), solar storage
batteries and wind turbines.
Rare earths use in automotive
pollution control catalysts, permanent magnets and rechargeable
batteries is expected to continue to rise as future global
demand for conventional and hybrid vehicles, computers,
electronics and portable equipment increases.
Increased rare earths use is also
expected in fibre optics, medical applications that include
dental and surgical lasers, magnetic resonance imaging, medical
contrast agents, medical isotopes and positron emission
tomography scintillation detectors, according to the US
Geological Survey (USGS).
The outlook for the rare earths
market in the long term will remain competitive as the research
and technology sectors continue to advance their knowledge of
rare earths and their interactions with other elements. New
applications are expected to continue to be discovered and
developed, especially in areas that are considered essential,
such as new energy and defence.
Owner
|
Location
|
Proposed REO
capacity (tpa)
|
Target
start-up
|
Status
|
Notes
|
Molycorp
|
Mountain Pass, California,
US
|
(a ) 19,050,
|
Phase 1: Q4 2012, Phase 2:
Q1 2013
|
Started pre-feasibility
study.
|
Former world-leading
deposit. Group has acquired downstream alloy
and magnet assets.
|
(b) 40,000
|
Lynas
|
Pahang, Malaysia/Duncan
deposit, Mt Weld, Western Australia
|
(a) 22,000 (b) unknown
|
(a) 2013 (b) 2013-2014
|
Malaysia construction almost
complete. TOL received but postponed due to
local opposition. Scoping study completed at
Duncan deposit, feasibility study underway.
|
Malaysia LAMP project faced
with local opposition. Estimated capital cost
for a processing plant for the Duncan deposit
is $600 million.
|
Indian Rare
Earths/Toyota Tsusho/Sojitz
|
Ganjam, Orissa state,
India
|
3,000-4,000
|
End of 2012
|
Plant under
construction.
|
Plant to process REO from
IREs existing monazite ore mine.
|
Kazatomprom/
Sumitomo
|
SARECO, Ust-Kamenogorsk,
Kazakhstan
|
15,000
|
2015
|
No recent information
available.
|
SARECO JV with Kazakh
uranium producer. Ore rich in Dy and Nd.
|
Great Western
Minerals
|
Steenkampskraal, Western
Cape, South Africa
|
5,000
|
Q1 2013
|
Mine refurbishment on track.
Negotiating plant JV.
|
Entered agreement with
Chinas Ganzhou Qiandong Rare Earth Group
for separation plant.
|
Vietnam govt/Toyota
Tsusho/ Sojitz
|
Dong Pau, Lai Chau province,
Vietnam
|
(a) 3,000, (b) 6,000
|
2012/2013
|
Mining rights acquired;
expects to begin producing in 2012/2013.
|
Two govts to launch research
centre in Hanoi to develop separation
technology.
|
Stans
Energy
|
Kuttesay II, Kemin,
Kyrgyzstan
|
(a) 500, (b) 1,500
|
(a) 2012, (b) 2013
|
Refurbishing KCMP processing
complex.
|
Initial REO and metal output
from outsourced raw materials.
|
Alkane
Resources
|
Dubbo, New South Wales,
Australia
|
1,800-4,600
|
2015
|
Expects financing to be in
place by Q2 2013 for production in 2015.
|
Zirconium and niobium
co-products. Rare earths to be sold as heavy
and light concentrates.
|
Arafura
Resources
|
Nolans, NT & Whyalla,
SA, Australia
|
20,000
|
(a) 2013 (b) 2014
|
Completed bankable
feasibility study for the Nolans Project;
Whyalla operation expected to reach full
production by 2014
|
Phosphates, calcium chloride
and uranium co-products.
|
Greenland Minerals
and Energy
|
Kvanefjeld, Narsaq,
Greenland
|
43,700
|
2015
|
Definitive feasibility aimed
for mid-2013. Pilot plant by end 2012.
|
Uranium co-products. Claims
to have biggest rare earth deposit outside
China.
|
Great Western
Minerals
|
Hoidas Lake, Saskatchewan,
Canada
|
3,000-5,000
|
2015/16
|
Working on NI-101 resource
estimate.
|
Company prioritising
Steenkampskraal project see no. 5.
|
Avalon Rare
Metals
|
Nechalacho, Northwest
Territories, Canada
|
10,000
|
2014
|
Bankable feasibility to be
completed in Q2 2013.
|
Seperation plant will be
based in Louisiana, US.
|
Rare Element
Resources
|
Bear Lodge, Wyoming, US
|
Unknown
|
2014
|
Feasibility study underway
for completion in Q2 2013.
|
-
|
Pele Mountain
Resources
|
Eco Ridge, Ontario,
Canada
|
-
|
-
|
Exploration stage
|
Located at Elliott Lake
former REO-producing mining camp.
|
Quest Rare
Minerals
|
Strange Lake, Quebec,
Canada
|
12,500
|
2015
|
Pre-feasibility study
expected in 2011-12.
|
REO in the heavy
category.
|
Ucore
Uranium
|
Bokan Mountain, Prince of
Wales Island, Alaska, US
|
-
|
-
|
Preliminary economic
assessment expected in Q1 2012.
|
Uranium and niobium
co-products.
|
US Rare
Earths
|
Diamond Creek, Idaho &
Lemhi Pass, Montana, US
|
-
|
-
|
Exploration stage
|
Also has deposits in
Colorado.
|
Matamec
Explorations
|
Kipawa, Zeus property,
Quebec, Canada
|
-
|
2015-2016
|
Feasibility study underway,
report due in Q2 2013.
|
Focused on heavy REO.
|
Tasman
Metals
|
Norra Kärr, Sweden
|
-
|
-
|
Drilling and sampling work
completed. PEA published in March 2012 and
pre-feasibility study expected late 2012/early
2013.
|
Focus on heavy REO and
zirconium minerals. Holds several properties in
Sweden and Finland.
|
Montero Mining/
Korea Resources
|
Wigu Hill, Morogoro, eastern
Tanzania
|
3,000-5,000
|
Early 2013
|
Ready to enter
pre-feasibility and feasibility study
stage.
|
Plans to build refinery with
Mintek. In talks with Korea Resources over
financing.
|
Namibia Rare
Earths
|
Lofdal, Kunene region,
northwest Namibia
|
-
|
-
|
Exploration stage
|
Formerly named Etruscan
Resources. Uranium and niobium co-products.
|
Frontier
Resources
|
Zandkopsdrift, Northern
Cape, South Africa
|
-
|
-
|
Definitive feasibility
expected by end 2012
|
In talks with Korea
Resources over financing.
|
Hudson
Resources
|
Sarfartoq, west
Greenland
|
-
|
-
|
Exploration stage
|
Initially explored for
niobium and tantalum.
|
AMR
Resources
|
Canakli, Burdur, Turkey
|
5,500
|
2012/13
|
Test production
|
Includes zirconium, niobium
and thorium minerals.
|
|
The US and Australia
Rare earths mine production in the
US and Australia was non-existent in 2010 and 2011 due to
expensive start-up costs and continued reliance on supply from
China, yet the reserves in these countries, recorded by the
USGS, are fairly sizeable at 13m tonnes and 1,6m tonnes
respectively (see table 3). After the supply situation
in China reached tipping point, rare earths explorations at
these reserves began and now, in 2012, several companies have
successfully commenced operations in these areas.
US-based Rare Element Resources Ltd
this May increased the resource estimate for its Bear Lodge
project in Wyoming to 6.8m tonnes grading 3.79% rare earths
oxide (REO) and measured and indicted categories, up from 6.2m
tonnes averaging 3.75% REO.
The Bear Lodge property contains
the light rare earths (LREE) lanthanum, cerium, praseodymium,
neodymium, samarium, europium and gadolinium. Four of these,
cerium, lanthanum, neodymium and praseodymium, listed in
decreasing abundance, make up the majority of the Bear Lodge
distribution, and neodymium and praseodymium are considered
especially valuable.
In-depth metallurgical and process
data is being developed to be incorporated into the Bear Lodge
Rare Earth projects definitive feasibility study, which
is scheduled to commence in the first quarter of 2013.
We are pleased with the
progress of our technical work necessary to advance our process
and introduce efficiencies that will be incorporated in the
feasibility study. To that end, we are working on numerous
studies to optimise our development plan. Our goal is to
implement the most efficient, effective and environmentally
sound process to concentrate the rare earth elements found at
Bear Lodge and the surrounding target areas, Jaye
Pickarts, Rare Element Resources COO, told
IM.
Further to its success at the Bear
Lodge property, Rare Element Resources also identified
significant heavy rare earth element (HREE) enrichment at its
Whitetail Ridge Resource Area and at the Taylor and Carbon
target areas in August 2011. The updated resources for the Bull
Hill and Whitetail Ridge areas were reported by the company in
May 2012 and were based on results from the 2009-2011 drill
programs.
Included in the results is the
thickest continuous intercept of rare earths mineralisation
found to date at Bull Hill, consisting of 95 meters averaging
4.18% total rare earth oxide (TREO). Re-assay for rare earths
of selected intercepts from historic gold exploration drill
holes at the Carbon target also identified significant zones of
high-grade rare earths mineralisation, including the highest
grades yet reported from the Carbon target.
Additional assay results are
expected for drill holes from Bull Hill, Whitetail Ridge, and
Carbon during the next few months.
Rare Element Resources
activities in 2012 also included the plan of operation for mine
permitting, marketing of concentrate from the pilot plant,
testing for rare earths oxide separation, additional drilling
for rare earths-resource expansion and upgrading, metallurgical
optimisation studies and completion of mine permitting for
2014.
South west of Rare Element
Resourcess, activities one of the worlds light rare
earths leaders, Molycorp Inc., is ramping up operations on the
south flank of the Clark Mountain Range, just north of Mountain
Pass, California.
The Mountain Pass deposit contains
8% to 12% rare earths oxide, mostly contained in the mineral
bastnasite. Gangue minerals include calcite, barite and
dolomite. Known remaining reserves are estimated to exceed 20m
tonnes of ore as of 2008, using a 5% cut-off grade, and
averaging 8.24% rare earths oxide.
Lanthanum, cerium, neodymium and
praseodymium products make up the majority of Molycorps
commercial output from Mountain Pass. However, the company also
produces commercially-significant quantities of heavy rare
earths including europium, terbium, dysprosium and yttrium.
Molycorp began construction of
phase one of Project Phoenix in January 2011, and this is
expected to be completed with phase 2 by the end of 2013.
During that same year, the companys three facilities,
Molycorp Mountain Pass, Molycorp Silmet and Molycorp Metals
& Alloys, produced more than 3,500 tonnes of rare earths
products, as measured in REO equivalent.
The expansions of facilities at
Mountain Pass are estimated to increase production to an annual
phase one rate of 19,050 metric tonnes by the end of 2012.
We will have the capacity to
produce at an annual rate of up to 40,000 tonnes after our
Phase 2 expansion of Mountain Pass is completed by the end of
2013, the company said.
Projects have been progressing at
an equally fast pace in Australia. Of particular note are the
Alkane Resources Ltd Dubbo Zirconia project in New South Wales,
Arafura Resources Ltds Nolans Bore mining and
beneficiation project in the Northern Territory and its
Whayalla processing operation in South Australia as well as
Lynas Corp.s Mount Weld project in Western Australia (see
table 2).
The Dubbo Zirconia Project (DZP),
which is located 30 km south of the large regional centre of
Dubbo, approximately 400 km north-west of Sydney in the Central
West Region of New South Wales, is held by Australian Zirconia
Ltd (AZL), a wholly owned subsidiary of Alkane Resources Ltd.
The DZP resource contains mainly LREE but also HREE including
yttrium.
A definitive feasibility study was
completed in September 2011 based upon a 400,000 tpa ore
throughput, yet due to changing market dynamics, this
feasibility study has been expanded to assess a 1 mtpa
project.
The project has been demonstrated
to be technically and financially robust based on simple
open-cut mining and processing on site, with all infrastructure
and waste management located within the project site.
Due to the size of the resource,
mine life is expected to be more than 70 years and the project
will be a strategic and alternate supplier in the zirconium
(hafnium), niobium (tantalum), yttrium and rare earths
industries. Its zirconium output will not be dependent on
zircon supply and the yttrium and heavy rare earths independent
of Chinas production (see below).
DZP Production Outputs |
|
Product |
Mt |
LREE concentrate |
3,050 tpa (REOs) |
YHREE concentrate |
1,120 tpa (REOs) |
Process development, including
improved metal recovery, water recycling and value engineering
is continuing and a number of memorandums of understanding for
product off-take have been signed, including a toll-treatment
purchase agreement with Japans Shin-Etsu Chemical, which
will enable both rare earths concentrates to be processed to
separated high-purity individual rare earths oxide.
An environmental impact study (EIS)
will also be lodged with the NSW authorities by the end of
2012. The current schedule anticipates all approvals and
financing in place in the second half of 2013 and production
commencing late 2015.
In the Northern Territory of
Australia, Arafura Resources Ltd continued to develop its
Nolans Bore project as well as advancing the Whayalla
processing operation in South Australia (see interview on
page 48).
|
Rare Element Resourcess Beaver
Creek Alluvial Monitoring Well, designed
to monitor groundwater quality and water
level in the shallow alluvial aquifer to
assess potential future mining impacts |
Meanwhile, Australian light rare
earths producer, Lynas Corp., together with its closest
competitor outside China, Molycorp, is expected to add around
41,000 tonnes rare earths oxide capacity in the next few years,
effectively leading the light rare earths market outside
China.
Lynas Mount Weld project,
located 35 km south of Laverton, Western Australia, is now
up-and-running, and the company will soon undertake a detailed
feasibility study for the development of its Duncan Deposit,
also part of the Mount Weld precinct.
The Duncan deposit contains higher
amounts of heavy rare earths than the central lanthanide
deposit that is being mined for processing in Malaysia. This
follows a scoping study, which considered various forms of
processing, before deciding that direct chemical beneficiation
was most suitable. The estimated capital cost for a processing
plant for the Duncan deposit is $600m.
World rare earths mine production and
reserves |
|
|
|
Country |
Mine production (Mt) |
|
Reserves (Mt) |
|
2010 |
2011 |
|
US |
-
|
-
|
13,000 |
Australia |
-
|
-
|
1,600 |
Brazil |
0.55 |
0.55 |
48 |
China |
130 |
130 |
55,000 |
Commonwealth of
Independent States |
N/A |
N/A |
19,000 |
India |
28 |
30 |
3,100 |
Malaysia |
0.03 |
0.03 |
30 |
Other countries |
N/A |
N/A |
22,000 |
World Total (rounded) |
133 |
135 |
110,000 |
Malaysia
Lynas presence in Australia
is significant, but it has been the companys operations
further north that have been capturing recent headlines as the
company continues to face environmental criticism over the
Lynas Advanced Materials Plant (LAMP) in Kuantan, Malaysia.
|
Nolans Bore Site: diamond drill rigs
set to work at the site, where Arafura
has completed its bankable feasibility
study and conducted environment and
technology demonstration studies for the
mine and processing operations |
Lynas received its temporary
operating licence (TOL) to begin work at the LAMP in September
this year. The Malaysian Atomic Energy Licensing Board (AELB)
issued the two-year licence to run until 2 September 2014,
subject to several conditions.
Lynas planned to start transporting
rare earths concentrate to Malaysia from its Mt Weld mine in
Australia, and saw the potential to begin processing at the
$800m LAMP in October. The news saw the companys share
price to climb more than 40% the following day.
However, civic groups including the
Save Malaysia, Stop Lynas! and Himpunan Hijau protest
organisations, which have staged numerous protests against the
LAMP facility since construction began two years ago, continued
to object to Lynass operations as the TOL went
through.
Applying to Malaysian courts, the
protest groups successfully delayed the LAMP project until
their appeal is heard.
Lynas has emphasised on a number of
occasions that the co-products produced from the beneficiation
process will be well within the limits of what is considered
safe. The company also added it would address the
principal cause of the community
anxiety with regard to the disposal of processing
residue from the LAMP by turning the material into exportable
processed co-products for the
construction industry.
The LAMP project is the first rare
earths refinery to be built outside China in almost three
decades, and represents a significant step towards achieving
supply diversity in the rare earths market.
Canada
Almost 13,000 km away in the
Northwest Territories of Canada, Avalon Rare Metals is leading
the way in heavy rare earths exploration. The companys
Nechalacho project is expected to reach bankable feasibility
stage in the second quarter of 2013, with financing completed
by the end of that year ready for construction in the early
quarters of 2014.
As of May 2012, 85,240 metres of
drilling at a cost of more than Canadian dollar (C$) 57m
($57.8) has been completed in exploring and developing the
Nechalacho property. With the resource estimation update
released in July 2012, estimated Measured Mineral Resources in
the Basal Zone are 8.90m tonnes, grading 1.64% TREO (lanthanum
to lutetium plus yttrium) and 21.7% HREO/TREO, using the base
case C$260 ($263)/tonne net metallurgical return (NMR)
cut-off.
At the C$400 ($405)/tonne NMR
cut-off, there are an estimated 8.42m tonnes of measured
mineral resources grading 1.69% TREO and 21.82% HREO/TREO.
Indicated mineral resources in the Basal Zone are an estimated
63.76m tonnes grading 1.52% TREO and 21.41% HREO/TREO at the
C$260 ($263)/tonne NMR base case cut-off.
The company has completed its pilot
flowsheet and is currently working towards other milestones
including Aboriginal agreements, environmental permitting and
off-take agreements for the project.
It is also in the course of
developing a separation plant in Louisiana, US, which will
process the heavy rare earths mined at its project at Thor Lake
in the Northwest Territories of Canada, Pierre Neatby, Avalon
Rare Metals VP of sales and marketing, told
IM.
In a bid to learn from Lynass
experience in Malaysia, Neatby stressed the importance of
working with local communities in both Louisiana and Thor Lake
in order to reduce the amount of local concern.
This is a big factor of what
we do at Avalon. Communication with the locals is of high
importance, he said.
Avalon is in discussions with end
customers in Asia, Europe and North America and plans to work
with companies in the LED lighting and consumer electronics
industries, as well as those developing magnet materials for
motors, wind turbines and EVs.
In Quebec, Canada, Matamec
Explorations Inc. continued drilling its Kipawa deposit this
year. Its HREE Kipawa deposit contains dysprosium, terbium and
yttrium, which are, like Avalon, being mined with EVs in
mind.
Matamec signed a joint-venture
agreement with Toyotsu Rare Earth Canada (TRECan), a subsidiary
of Toyota Motor Corp., in July this year in order to move ahead
with a NI 43-101 preliminary resource estimate and, later, a
feasibility study.
This is the first time any RE
company has agreed to receive funds from an end user to
accelerate and complete a feasibility study.
TRECan provided C$8.5m ($8.6m) 25%
and C$7.5m ($7.6m) 24% for the NI 43-101 and has also signed an
off-take agreement to buy 100% of the rare earths concentrate.
Matamec will remain the operator of the Kipawa deposit.
The company begun the feasibility
study in May this year and plans to publish the results in the
second quarter 2013, with projected production in 2015-16.
Toyota Motor Corp. will use the rare earths to manufacture its
range of hybrid and electric vehicles.
Tanzania
In East Africa, Montero Mining
& Exploration has been working to secure a strategic or
off-take partner to move to the next stage of development at
its Twiga Zone, Wigu Hill project in Tanzania. The company is
now ready to take the project to pre-feasibility and
feasibility study stage.
Monteros focus is the
development of our Wigu Hill RE deposit in Tanzania. We have
recently announced an increase in our ownership to 80% of the
projects. We have also been working very hard on the minerals
processing, metallurgy and hydrometallurgy as we believe this
will a driver to creating value and secure a strategic and
off-take partners to secure future sales of rare earths,
Dr Tony Harwood, CEO, told IM.
The Wigu Hill rare earths project
is a light rare earths deposit and a large carbonite complex
with bastnaesite mineralisation. Initial grab samples yielded
results as high as 27.25% TREO. Montero released an initial NI
43-101 Inferred resource estimate of 3.3Mt at 2.6% LREO5
including 510K at 4.4% LREO5 on two of 10 possible drill
targets. Further exploration drilling to add to the current
resource is underway.
Montero also plans to move from
mine to metal by having a mining operation at the Wigu Hill
area producing a minerals concentrate that will be treated
further in a RE refinery to produce fine RE chemicals metals
and alloys for sale.
Montero has been targeting heavy
rare earths deposits to complement its light rare earths
deposit at Wigu Hill to enable rare earths refinery plans to
progress with the ability to process all the rare earths that
are required by the end market.
In South Africa, Great Western
Minerals Group Ltd. (GWMG) is moving ahead with a project to
re-commission the abandoned Steenkampskraal mine in the Western
Cape owned by Steenkampskraal Monazite Mine Ltd.
In June 2011, GWMG appointed SRK
Engineers and Scientists of Johannesburg to complete a
feasibility study on the project and, in August, agreed to
purchase all of the materials produced by the mine for a
10-year period.
The mine, which has shown up both
heavy rare earths and light rare earths from a monazite, was
put on hold until recently due to the stranglehold China had on
the rare earths industry.
Europe
GWMG also planned to increase rare
earths metals processing capacity at its UK-based subsidiary,
Less Common Metals Ltd (LCM) in 2012. A new furnace at its
Hooton Park operation, Birkenhead, UK is expected to increase
LCMs processing of specialty metal alloys that include RE
materials by approximately 50%. The new furnace was designed to
provide NdFeB alloys for sintered magnets. The company has been
focusing primarily on the battery alloy and hydrogen storage
markets.
LCM has long-term commitments to
major customers such as Aichi Steel, a partially owned
subsidiary of the Toyota Group of Companies, and Vacuumschmelze
of Germany to supply rare earths alloys. Both supply agreements
are based on the future supply of rare earths from the
Steenkampskraal mine.
Also in Europe, Tasman Metals
Norra Kerr project is also moving steadily ahead in Sweden. The
company president and CEO, Mark Saxon, told IM
that he expects to go into production in four to five
years time.
Although things have been
tough, there has been no change from the demand side, so no
change in the real market, the fundamental market, Saxon
said.
Tasman has lodged its mining lease
application and is therefore past the first steps to getting
the approvals we need to be able to open a mine.
Thats a key step for
us. We have done a lot of drilling and sampling work over the
summer and thats given us an expanded technical database
to be more confident in our resources in the ground,
Saxon added.
Seventy new holes were completed
this year and two existing drill holes were extended, for a
total of 12,453m of drilling.
This drilling formed part of an
extensive summer programme of geological, geotechnical and
environmental work directed at collecting data appropriate for
future land use decisions, mine planning and permit
applications.
Mineralisation is now known to
extend at least 100m below the in-pit resource considered for
the Norra Kerr PEA published in March 2012. With this
substantial increase in drilling data, the upcoming Pre
Feasibility Study (PFS) will include an updated NI 43-101
resource calculation.
Now all of our work is
focused on our extraction techniques on the metallurgy and how
were going to get the metals out of the rock and
thats really where all of the moneys going now is
in that process, Saxon said.
Tasmans wholly-owned Norra
Karr project is the only NI 43-101 compliant rare earths
resource in mainland Europe.
Looking ahead
Interview with Arafura CEO, Chris
Tonkin |
How is Arafura Resources
performing at the moment? |
Like all other rare
earth companies, Arafuras progress has been
disrupted by a fall in rare earths prices from the
heights of mid-2011, exacerbated by a loss in investor
confidence around the world, driven in part by the
European debt crisis and global economic outlook.
Having said the above, there is strong interest in our
Nolans Rare Earths project.
Arafuras
shareholders have shown their support through their
participation in an Australian dollar (A$) 8.2m ($8.4m)
share purchase plan earlier this year and a A$9.9m
($10.1m) equity raising from Arafuras major
shareholder will be finalised in mid-October.
|
Can you provide an
update on your latest projects? |
Weve made
substantial progress on advancing our wholly-owned
Nolans Rare Earths project over the past 12 months. We
completed a substantial upgrade in our JORC resources
at Nolans Bore in Australias Northern Territory,
so that Arafuras rare earths inventory now stands
at 1.22m tonnes of contained rare earths oxide, with
over 50% of the inventory hosted by higher confidence
resources that we expect to be able to convert to ore
reserves.
A key outcome of our
downstream processing development program has been to
produce four of our five final separated rare earths
oxide products for customer evaluation, and feedback
from these parties indicates success in complying with
their quality specifications. Weve signed
agreements for product off-take with two multinational
organisations in Germany and Korea, and most recently
we updated the market on the status of the Nolans
project via a comprehensive 50+ page report.
Finally, a financial
evaluation of the Nolans project by both Arafura and an
independent expert highlights what are potentially very
attractive returns based on what we regard as
relatively conservative pricing and capital/operating
cost assumptions.
|
What other
developments are in the future for Arafura
Resources?
|
The base case for the
Nolans project includes the operation of a chemical
processing complex and rare earths separation facility
at Whyalla in South Australia to produce rare earths
oxide products for export. It will be the only
operation of its kind in Australia, and while the
plants design will be optimised to process Nolans
Bore material, there are opportunities to consider
downstream processing of third party intermediate
feedstock from rare earths projects being advanced
elsewhere in Australia.
In addition, Arafura
maintains a modest exploration effort targeting rare
earths in the region around Nolans Bore. Our program
delivered some success in the latter part of 2011, when
we discovered wide intervals of rare earths
mineralisation in reconnaissance drilling north-west of
Nolans Bore. We have plans to investigate the extent of
this discovery and other early-stage prospects during
the 2013 field season.
|
Chinas dominance in the rare earths market is not likely
to change any time soon. However, at more than 55m tonnes the
rare earths found outside China are not to be dismissed. Rare
earths companies have been ramping up activities in recent
times to fill the necessary void, with many looking to begin
production within the next two to three years.
Mining industry expert Dudley
Kingsnorth forecasts global rare earths demand to be between
200,000 and 240,000 tonnes by 2020, of which demand outside
could be between 70,000 and 90,000 tpa. By this time,
Kingsnorth expects light rare earths he said during a
presentation at the Toronto Technology Metals Summit at the
beginning of 2012.
In terms of demand, this is not
likely to subside. Like many of earths minerals, rare
earths are of paramount importance to everyday life - becoming
increasing more so with the advent of new and green
technologies.
The use of rare earths in
magnets that allow electric motors and electrical generators
such as wind and hydro turbines to become more efficient in
energy generation [is driving demand outside China],
Monteros Harwood told IM.
The companies that use the
rare earths for these purposes have been provided irregular
supplies of rare earths from China and hence many are looking
for sources of primary rare from outside China, he
added.
Substitutes are out there, yet they
are expensive to develop and more often than not, substandard
when compared with the real thing.
This, again, is not thought to
affect the overall growth of the rare earths market outside
China.
While geopolitical dimension
may capture headlines, it is the ubiquity of rare earths that
ensures demand longevity - even as countries and companies
channel millions of dollars into research efforts to find
substitutes for rare earths, even greater amounts of R&D
dollars are being invested into new products and processes
involving rare earths, Lynas Corp. told
IM.
Yet, while demand remains strong,
there are factors slowing down this growth outside China, Lynas
explained.
The constrained availability
of certain rare earths, especially heavy rare earths,
manufacturing productivity improvements such as on-site
recycling and the price disconnect inside and outside China,
are all factors impacting the competitiveness of non-China
users, the company told IM.
The state of the global economy
will also have an impact on the global rare earths market, as
it does on many industries, yet the acceleration and increasing
application of the rare earths in new and existing technologies
will certainly keep the industrys head safely above water
for many years to come.
The market demand is going to
grow significantly and this has to be matched by supply outside
of China, which is using its own RE for internal demand,
Harwood concluded.
The author would like to thank Alkane Resources Ltd,
Arafura Resources Ltd, Avalon Rare Metals, Matamec Exploration
Inc., Montero Mining & Exploration, Lynas Corp., Rare
Element Resources Ltd and Tasman Metals Ltd for their help in
putting this article together.