PERTH (miningweekly.com) – Mineral sands hopeful Arafura Resources is hoping to save up to A$1-billion on the projected costs of its Nolans project, in the Northern Territory, through a range of cost saving initiatives.

During the December quarter, the company announced that it would undertake a project review and optimisation programme for the project, to identify where synergies could be achieved with strategic partner East China Mineral Exploration and Development Bureau (ECE).

Arafura said on Monday that the programme under way in China complemented the company’s trade-off study, which evaluated various process options and plant configurations to improve the project economics.

Results from the trade-off study were currently being evaluated, but preliminary findings indicated that significant cost savings could be achieved by simplifying the project’s transport and logistics component.

Arafura could also realise indicative savings of around A$160-million in capital costs and A$1.60/kg of rare-earth oxide in operating costs by relocating intermediate chemical processing from Whyalla, in South Australia close to the Nolans bore mine site, in the Northern Territory.

In support of this initiative, exploratory drilling south of the Nolans bore mine had identified an extensive aquifer system that Arafura believed could supply the Nolans bore mine and concentrator, as well as the intermediate plant, with process and potable water for the life of operations.

ASX-listed Arafura said it had held discussions with both the South Australian and Northern Territory governments and was confident that the proposed plant relocation and resultant cost savings would be achievable.

In addition to the relocation of the intermediate chemical processing plant, the trade study had also highlighted various process initiatives and further potential plant relocations to benefit the project.

From these initiatives, Arafura was targeting a total capital cost reduction of between A$500-million and A$1-billion for the Nolans project, as well as significant reductions in operating costs.

Further material reductions in capital and operating costs were also expected over the coming weeks as key unit processes and circuits in the base-case flow sheet were optimised and synergies with established Chinese rare-earth beneficiation, hydrometallurgical and separation technologies were identified.

Meanwhile, Arafura also reported on Monday that it could significantly reduce and potentially eliminate the necessity for a A$30-million funding requirement to complete the bankable feasibility study on the Nolans project.

This was following recent discussions with ECE and the expected cost reductions stemming from the optimisation programme being undertaken in China.

Arafura noted that it had existing cash reserves of some A$36-million and was confident that with the support of ECE and the much lower project cost, the company could advance the development of Nolans toward financing and commercialisation amid the challenging market environment.