Nimble RareX pursues fertiliser market in Cummins Range update

RareX could materially reduce start-up costs for its Cummins Range with a new processing method to extract its phosphate resource
REE has paused rare earths engineering due to subdued market pricing, but could leverage strong local and international demand for high-quality fertilisers before the magnet metals market recovers
MoUs with fertiliser customers in place

Special Report: A fleet footed RareX has rejigged its production plans ahead of a pre-feasibility study on its flagship Cummins Range development, leveraging the unique metallurgical properties of the large rare earths and phosphate project to pursue a cut-price start-up option.

In a sign of the nimble feet needed to navigate a tougher resources market, RareX (ASX:REE) has identified a potentially cheaper pathway to set up as a phosphate rock supplier to the fertiliser industry while it waits for the recovery in magnet rare earths prices.

A refined PFS on the Cummins Range site in the Kimberley is due in September this year, which will leverage the clean nature of its apatite material to propose a metallurgical pathway to process and extract phosphate using a fraction of the infrastructure conceived in a 2023 scoping study.

That put a $45m price tag on a DSO phosphate pit before a $304m stage 2 investment to produce a 550,000tpa phosphate and rare mineral concentrate.

REE has put rare earths metallurgy and engineering on hold, waiting for a recovery in prices of the future facing commodity, used in EV motors, renewables, electronics, tech and aviation among other applications.

Alternative phosphate technology is also in testing to investigate a potential reduction in start-up costs, with test results due in November.

“Whilst the prevailing and underlying commodity prices remain suppressed, causing us to pause rare earths engineering works, we are pleased that we’ve contemplated this project as a rare earths and phosphate project,” REE MD James Durrant said.

“The technology we are now testing for phosphate extraction has the potential to de-couple one product’s reliance from the others.”

Located 50km off the Tanami Road, 135km south-east of Halls Creek, Cummins Range contains 1.6Mt of rare earths and 24Mt of phosphate, making it one of Australia’s biggest deposits of the two important commodities.

Project work ongoing

While rare earths pricing over the past 12-18 months has forced a rethink, on which REE is not at all an orphan, REE says the outlook remains strong, with analysts projecting supply deficits from 2025 and price recovery expected as early as this year.

Lynas’ June quarter pricing of $46/kg is well below the $110/kg modelled by REE and other prospective miners. But history does show rare earths pricing can shoot up suddenly once it begins to move and customers get desperate for material.

RareX says it has received “positive feedback … pertaining to quality, consistency and volume which will feed into the engineering studies for rare earths once re-started.”

Phosphate prices have softened as well, but new markets continue to emerge, with lithium-iron-phosphate prices lifting in prominence in the Chinese EV and energy storage market.

But it already has MoUs with rock solid customers in Nitron, the world’s second largest fertiliser distributor and the Kimberley’s local fertiliser distributor OrdCo, which is heavily reliant on high cost imported synthetic fertilisers from the east coast.

RareX has also been engaging with offtake discussions in conjunction with laboratory-generated product samples to identify mineral concentrate product pathways across South-east Asia.

REE has also completed environmental baseline monitoring ahead of engaging with the WA EPA on approvals and is working through native title heritage agreement process after a change in management at the prescribed body corporate for the Jaru traditional owners.

Phosphate trials

Among the benefits of the multi-stage approach at Cummins Range is the fact is phosphate enrichment is strong in shallow areas of the deposit.

REE thinks a microbe assisted leaching process could be used to liberate the product over a more capital intense flotation approach.

“Therefore, a more targeted, microbe assisted, leaching of the phosphate with Australian and US partners, already engaged, could enable much lower start-up costs and significantly reduced logistics costs for mine gate products going to market,” REE said.

“Bench scale and comparative glasshouse trials indicate a clear economic benefit to farmers relying on large quantities of synthetic fertilisers.

“Specifically, initial tests of the bio-microbial phosphate product by our partners appear to compete very well in substitution of synthetic fertilisers in soils similar to those in the Ord River region, one of RareX’s natural initial customer bases.

“RareX is currently testing sample product from Cummins Range with our partners to ascertain its suitability as a feedstock for their process and to determine the quality of the resulting highly concentrated phosphate product.”

Test work will be completed on Ord River like soils and other in glass house trials which could lead to share field trials with the Ord River Co-op. That could be a stepping stone to building and expanding its phosphate customer base.

“Given Australia’s reliance on phosphate-based fertilisers internationally, developing this technology to pilot scale at Cummins Range and then into full production is anticipated to attract significant local and national support,” REE noted.

Initial processing and chemical testing is planned to take six weeks, with another potential six to eight weeks required for plant trials at glasshouse scale, with samples currently enroute for process by partners.

This article was developed in collaboration with RareX, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.