Name and Location
Dubbo zirconia project (DZP), New South Wales, Australia.

Client
Alkane Resources.

Project Description
The DZP is a development project based on one of the world’s largest in-ground resources of rare metals and rare earths.

A variety of rare-earth and metal concentrates will be produced, including zirconium, niobium, hafnium, tantalum, yttrium, europium, dysprosium and neodymium.

The DZP is expected to mine 19.5-million tonnes of ore over 20 years, producing 75 000 t/y of concentrate.

The project includes:
• a small opencut mine;
• processing and refining facilities, a plant and equipment, including a 90-m-high stack;
• chemical storage areas, including a tank farm;
• waste encapsulation cells;
• water and gas supply pipelines;
• road upgrades; and
• the potential reopening of the adjoining railway line.

While the project is proposed to operate for 20 years at the proposed extraction rate, the ore deposit will not be exhausted over this period. Consequently, there is potential for additional mining in future.

Net Present Value/Internal Rate of Return
Not stated.

Value
The economics of the Dubbo zirconia project were adjusted following the completion of the front-end engineering design (Feed) in August 2015. The Feed resulted in a capital expenditure adjustment, from the A$1-billion estimated in the 2013 definitive feasibility study to A$1.3-billion, based on a higher Australian/US dollar exchange rate.

Duration
Not stated.

Latest Developments
Alkane Resources has signed a letter of intent (LOI) with material company Vietnam Rare Earth JSC (VTRE) to toll process rare-earth concentrate from the Dubbo zirconia project into individual rare-earth products.

Subject to the completion of a due diligence, VTRE will toll process rare-earth concentrate from the Dubbo project to produce separated rare-earth oxides to agreed customer specifications.

Alkane has said that up to 6 664 t/y of separated rare earths could be produced from the Dubbo project. Initially, however, only 2 000 t/y of the key, high-value rare earths will be shipped to VTRE for processing, with lanthanum, cerium and yttrium to be recovered from Dubbo.

The yttrium oxide will be sold directly from the Dubbo project, while the separated lanthanum and cerium will be stored until the market improves.

The toll agreement is expected to run until the end of 2027, with Alkane holding an option to extend the agreement.

The agreement with VTRE gives Alkane the opportunity to participate in downstream integrated rare earths processing without the cost of building, commissioning and operating an on-site facility.

VTRE will also toll process separated rare-earth oxides into value-added products, including rare-earth metal alloys to meet customer specifications.

Alkane and VTRE will also form a joint marketing company to promote and develop current and new applications for VTRE’s products. The marketing company will leverage Alkane’s existing international business development processes and support VTRE to expand its exposure to non-Asian markets.

Alkane has said that the joint marketing company will also enable it to undertake value-added product development and start servicing customers before production starts at Dubbo.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Alkane Resources, tel +61 8 9227 5677, fax +61 8 9227 8178 or email info@alkane.com.au.