Positive outlook for Australia’s rare earths industry

20th June 2014 By: Carina Borralho

The rare earths industry has a long-term future owing to varied and advanced applications of the commodities, particularly in green products and new tech-nologies, says Australian mining and exploration company Alkane.

Alkane MD Ian Chalmers notes that, while there are several rare earths prospects in Africa, the Canada-based Great Western Minerals Group’s Steenkampskraal rare earths development, in South Africa’s Northern Cape, is the most advanced.

“In the rare earths sector, the biggest oppor-tunity lies in the manufacture of magnets, which are used in several personal electronic applications, such as mobile phones and DVD players, as well as in major industrial applications, such as automobiles and wind turbines,” says Chalmers.
Other growth areas for rare earths include the manufacture of rechargeable batteries, which uses nickel-rare earth metal hydride, and catalysts for the oil industry used in the refining process.

Chalmers tells Mining Weekly that the rare earths industry is in a state of consolidation after the rapid spike in prices in 2011 and the subsequent collapse of prices in 2013. Prices have now stabilised and are expected to remain so in the long term.

Alkane predicts that China will remain the world’s primary rare earths supplier but adds that it is becoming more environmentally conscious and closing down mines that are not conforming to the country’s new regulations. This may decrease the global rare earths supply.

China is also beneficiating more of its own rare earths supply to produce value-added products, which will impact on the rest of the world supply.

Projects in Progress
Alkane is currently working on the Dubbo Zirconia project, in Australia, which is one of the country’s most valuable rare metal and rare earths projects.

The 2013 definitive feasibility study (DFS) determined a net present value of A$1.2-billion for the mine’s 20-year life.

Located 20 km south of Dubbo – a city in the Orana region of New South Wales – the Dubbo Zirconia project has been described as a world-class resource, containing zirconium, hafnium, niobium, tantalum, yttrium and rare-earth elements. According to the DFS, the expected life-of-mine (LoM) is several decades longer than the 20-year LoM estimated for the feasibility study.

Production from the Dubbo Zirconia project is estimated to meet 8% of the world’s demand for zirconium products, 3% of niobium demand, 2% of light rare-earth element demand and 8% of heavy rare-earth element demand.

Alkane is aiming to start production on the Dubbo Zirconia project in 2016. The project will create between 300 and 400 jobs during the construction period and 230 permanent jobs in mining operations and mineral processing once the project is under way.

The Dubbo Zirconia project is currently progressing through the New South Wales government approvals process. The environmental-impact statement was submitted in June 2013 and was submitted to the New South Wales Department of Planning and Infrastructure for public comment. Alkane is currently awaiting project approval from the New South Wales Department of Planning and Infrastructure, which is expected to be awarded by the end of September.

Until recently, 95% of the global rare earths supply has come from China, resulting in unavailability and pricing unpredictability.

“The changing market of the rare earths sector, and the general understanding that all rare earths are equal and that suppliers outside China are highly sought after, are challenges currently being faced by the industry,” says Chalmers.

This is complicated by the fact that China is increasingly moving towards keeping the bulk of their rare earths supply for use in-country.

“The market is reaching saturation point with regard to some of the large-volume supplies of light rare-earth minerals, as well as lanthanum and cerium. “However, demand for neodymium and praseodymium is picking up, and there is still a growing need for less common heavy rare earths and other rare metals, which Alkane has an abundance of,” Chalmers points out.

Alkane’s strategy is to secure 100% of its projected rare-earth elements output through memoranda of understanding and offtake agreements. For instance, the company signed a memor-andum of understanding and negotiated an offtake agreement with Japan’s largest chemical company, Shin-Etsu, in July 2012, which entails producing a suite of separated heavy and light rare earths using the rare-earth concentrates from the Dubbo Zirconia project.

“Further, Alkane is one of the only companies in the rare earths sector with a long-term operating demonstration pilot plant that has been able to deliver commercial product samples to potential end-users,” highlights Chalmers.

Alkane has a polymetallic supply of rare earths. These include light and heavy zirconium, niobium and rare earths.

Chalmers notes that Alkane has chosen to produce in low enough quantities so as not to impact on the price of the commodity. The company has also established strategic partnerships for each of its product streams.

“Alkane is a strategic and alter- native supplier to China,” he adds.
Trends and Technology
In terms of processing, Alkane uses a flow-down method to significantly improve recoveries and is currently looking at new separation technologies, such as pulsed columns for solvent extraction.

Chalmers notes that China is currently the world leader when it comes to rare earths separation technology. He adds that, in New South Wales, separation skills need to be developed and advanced technology needs to be adopted, as the Dubbo Zirconia project will be the first rare earths processing facility in Australia.