Special Report: Arafura has picked veteran project management consultancy KBR to help deliver its 100 per cent-owned Nolans neodymium-praseodymium (NdPr) project.

KBR is a global tier one consultancy with a wealth of knowledge and experience across many complex projects in mineral processing, hydrometallurgy and oil and gas. It recently completed a similar role for OZ Minerals’ (ASX:OZL) Carrapateena copper project in South Australia.

Now Arafura Resources (ASX:ARU) will draw on the same expertise by appointing KBR as the project management consultant to the integrated project management team for the Nolans project in the Northern Territory.

This will build on the existing project knowledge and supplement it with KBR’s proven project delivery solutions and systems.

KBR has also partnered with Wave International, which will bring its minerals processing experience – including rare earths – to the table while undertaking engineering design of selected non-process infrastructure.

“The appointment of KBR to the integrated project team for the delivery of Nolans is a major milestone for the company,” managing director Gavin Lockyer said.

“KBR brings a proven track record, systems and global experience to the project which will enhance our existing capabilities.

“Through their partnership with Wave, which has assisted the Arafura team with the definitive feasibility study and execution readiness activities to date, there will be a continuity of knowledge and momentum, moving into the project delivery activities.”

Nolans currently boasts an economic reserve of 19.2 million tonnes at 3 per cent total rare earths (TREO), enough to keep the mine ticking for an initial 23 years. NdPr makes up a significant 26.4 per cent of the total rare earths content.

NdPr is used for the manufacture of rare earth permanent magnets, particularly neodymium iron boron (NdFeB) magnets that are finding increased use in electric cars, wind turbines and other high-tech devices.

In February 2019, Arafura released the DFS for Nolans, a 90-minute drive north of Alice Springs, that pegged it as a very low-cost producer at just $US25.94 ($36.85) per kilogram of its cornerstone NdPr oxide product.

The project is expected to produce 4,357 tonnes of NdPr oxide per annum and has robust economics with a net present value (NPV) of $729m and internal rate of return (IRR) of 17.43 per cent.

IRR and NPV are used to estimate the profitability of a potential operation. The higher the number, the more profitable it is.

The Nolans project is highly leveraged to the NdPr price, with every $US5 per kg increase in NdPr oxide price adding another $130m to the NPV.

NOW READ:
Australia reckons it can become an ‘international powerhouse’ in critical minerals
Australia and the US aren’t messing around, they’re getting even more serious about critical minerals

 

This story was developed in collaboration with Arafura Resources, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.