Name of the Project
Makuutu rare earths project.

Location
Uganda, 120 km east of Kampala.

Project Owner/s
Ionic Rare Earths (IonicRE). The company currently owns 51% of Makuutu; however, it will increase its stake to 60% on the completion of the feasibility study before October 2022 and has a pre-emptive right over the remaining 40% stake.

Project Description
Makuutu is an ionic adsorption clay (IAC) deposit. IAC deposits contain rare-earth elements (REE) ionically bonded to the clay rather than existing as primary minerals in the ore.

A base case scoping study has demonstrated the potential for Makuutu to become a sustainable, long-life operation, supplying critical rare-earth oxide (REO) and heavy rare-earth oxide (HREO) to global markets and generating strong financial returns while delivering significant social and economic benefits for the local communities.

The study proposes openpit mining over an initial 11-year mine life, with the IAC run-of-mine (RoM) fed into a modular heap-leach plant, where the REO is recovered from the IAC mineralisation using salt desorption to produce a mixed rare earth carbonate product.

The first module will process 2.50-million tonnes a year of RoM and produce about 800 t/y REO equivalent product.

Additional modules will be added in years 2, 4, 6 and 9 to increase the plant throughput up to 12.50-million tonnes by Year 10.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at an 8% discount rate, of $321-million and an internal rate of return of 38%, with a payback of about five years.

Capital Expenditure
Total capital expenditure (capex) is estimated at $301-million.

Preproduction capex, including contingency, is estimated at $89-million for Module 1, including the mining fleet.

The Module 2 expansion in Year 2 is estimated at $40-million.

The expansion from Module 2 to 5, estimated at about $172-million, will be funded from project cash flow.

Planned Start/End Date
Production is expected in 2024.

Latest Developments
IonicRE expects the potential for growth in scandium demand to be immense, and is positioning its Makuutu rare earths project to cater to this demand.

Since announcing that it will produce scandium as a co-product in January, Ionic has increased the contained scandium oxide resource at its project from 2 300 t to 9 450 t.

A scoping study by the company has found that it can produce between 20 t/y and 25 t/y of scandium oxide in the first year of production, ramping up to between 90 t/y and 100 t/y by Year 10.

“The low capital expenditure development at Makuutu is a clear differentiator to other potential scandium sources, and provides Ionic with a tremendous advantage to help build and establish a key foothold in what the company expects will be metal of high demand once initial supply can be demonstrated,” Ionic has stated.

Ionic has explained that the adoption of scandium oxide will depend heavily on its price point.

As the market expands, the scandium oxide price is forecast to decrease, which is expected to facilitate the use of aluminium-scandium in an increasing number of applications, further increasing the potential of the market.

As a result, Ionic has adopted a long-term scandium oxide pricing basis, decreasing from about $1 500/kg to initial pricing of about $1 000/kg, and long-term pricing for the peak Makuutu scandium oxide production of about $700/kg.

On August 9, Ionic announced plans to evaluate the economics associated with the development of a standalone rare earth separation refinery for the processing of the critical and heavy rare-earth-dominant mixed rare-earth carbonate from Makuutu.

The refinery will also separate and refine scandium to a purity exceeding 99% and is aligned with supply directly for aluminium-scandium master alloy manufacturing.

The company continues discussions with global groups interested in development of aluminium-scandium alloys and is exploring opportunities for collaboration in this sector.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
IonicRE, tel +61 8 9481 2555.