Name and Location
Nolans rare earths project, Northern Territory, Australia.

Client
Arafura Resources.

Project Description
Nolans is one of the most advanced rare earths development projects globally. The Nolans Bore resource is rich in neodymium and praseodymium (NdPr) – the key rare earths used in high-strength permanent magnets.

The project has total mineral resources estimated at 47-million tonnes at 2.6% rare-earth oxides using a 1% cutoff grade.

The Nolans development report (NDR) describes in detail Arafura’s plans to develop its wholly owned project. It will entail a mine, a concentrator, a rare earths intermediate plant and related infrastructure, to be constructed and located at the Nolans site, in Australia’s Northern Territory. A rare earths separation plant will be built and located in an established chemicals industry precinct at an offshore location.

The proposed mining operation will use conventional openpit truck and excavator mining methods, supplemented by drilling and blasting for ore and waste.

Pit optimisation studies have generated schedules showing a mine life of 25 years, based on measured and indicated resources, and more than 40 years, based on total resources. Dilution is estimated at 11.4% (plus 0.1% mining loss) and 15.7% (plus 0.2% mining loss) respectively.

According to the NDR, geotechnical inputs, including pit slope parameters, have been developed for pit optimisations and pit design. A series of pit shells has been produced and the detailed pit design will be completed for the definitive feasibility study (DFS).

A strategic mining schedule for the measured and indicated optimisation scenario is based on a maximum overall mining rate of ten-million tonnes a year to produce an average of 900 000 t/y of plant feed. The life-of-mine optimisation scenario is based on a maximum overall mining rate of ten-million tonnes a year to produce an average of one-million tonnes of plant feed each year.

Meanwhile, the project’s post-beneficiation flowsheet has changed from a single complex, intended to be located at Whyalla, to a split configuration comprising a rare earths intermediate plant at the Nolans site and an offshore rare earths separation plant in an established chemicals precinct.

Sulphuric acid instead of hydrochloric acid will be used in the preleach circuit and the project no longer includes a chloralkali plant and hydrochloric acid recycle. It is no longer necessary to produce sodium hydroxide and hydrochloric acid on site, and the reduced quantities required will be imported to both processing complexes.

Beneficiation at the Nolans mine site will comprise crushing, grinding, magnetic separation and flotation to produce a blended concentrate.

The beneficiation flowsheet is defined with a high level of certainty and is ready to be progressed to DFS level.

Concentrate will be pumped through a slurry pipeline to a rare earths extraction plant at the Nolans processing site. Rare earths will be extracted from the concentrate through chemical processing to produce a high-quality rare-earth intermediate product. This flowsheet is well developed, with some parts requiring limited confirmatory work to provide more detail for the certainty of the process. Detailed process design criteria, and equipment selection and sizing have been undertaken.

Tailings, residue and radionuclide retention will be confined to the Nolans site.

Rare earths will be separated into the final rare-earth oxide products at the offshore rare earths separation plant using solvent extraction, followed by precipitation and calcination.

Arafura’s detailed research programme at Ansto, including minipiloting and rare earths separation trials, has delivered design parameters for upscaling to a production-scale installation and the corresponding mass balance and raw-material requirements.

Net Present Value/Internal Rate of Return
The project has an estimated net present value of A$2.045-billion after tax, with a 10% discount rate.

The project has an internal rate of return of 21.4% and an after-tax payback of capital in the fifth year of operation.

Value
Overall capital costs, including contingency, are estimated at A$1.41-billion.

Duration
The NDR envisages construction to start in mid-2016 and production in early 2019.

Latest Developments
Arafura has signed a memorandum of understanding (MoU) with South Korean chemical manufacturer OCI Company to establish a joint venture (JV) separation plant in South Korea.

The MoU follows a letter of intent signed in June last year. In the subsequent months, the two companies collaborated to examine the strategic benefits for the establishment of a JV separation plant.

The purpose of the MoU is to examine and negotiate proposals for OCI to supply reagents for the Nolans project, in the Northern Territory, and in particularly to the rare earths separation plant.

OCI will provide assistance for Arafura to access infrastructure and critical services for the operation of the separation plant, while the two parties will also collaborate on research and development.

Further, the JV will investigate the possibility of establishing a business model under which the parties will jointly fund the establishment of the separation plant and toll process of Nolan’s mixed rare-earth intermediate or carbonate product.

In addition, OCI is considering an equity investment in Arafura. “We are extremely pleased to have OCI as a potential JV partner in the Nolans rare earths separation plant. OCI’s expertise in chemical manufacturing coupled with the location of an existing plant in a chemical precinct, plus its inclusion in the Seamegneum Free Economic Zone, derisks a key aspect of the Nolans development,” Arafura MD Gavin Lockyer has said.

Arafura previously stated its intention to establish a rare earths separation plant within an established offshore chemical precinct, and has reported that it has identified and shortlisted a number of sites with suitable road, rail, port and related infrastructure.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Arafura Resources, tel +61 8 6210 7666, fax +61 8 9221 7966 or email media@arafuraresources.com.au.