Special Report: Arafura Resources is set to unveil the fourth phase of its rare earths pilot program later this month, proving its method in a key rare earths extraction stage – acid bake.

It’s the process that positions the company at the forefront of a small number of rare earth developers in the ever-lucrative market for magnet metals Neodymium-Praseodymium (NdPr).

Instead of baking the feed NdPr-rich concentrate to several hundred degrees in rotary kilns, it uses paddle dryers operating at a more modest 250 degrees that rotate the toothpaste-like material and release the valuable NdPr from the ore.

The trick has been getting a synthetic material to act in the same way as the target material from its Nolans NdPr project, so as to effectively evaluate the performance of the equipment and the ease of movement of material through it.

Arafura (ASX:ARU) has been highly methodical in its approach.  

“This is the most challenging part of the plant in a technical and materials handling sense. We have been taking extra care to make sure it will run as smooth as possible,” Arafura’s Managing Director Gavin Lockyer told Stockhead.

This phase follows three highly successful earlier phases of piloting that resulted in industry-leading NdPr recoveries. The process had taken longer than expeected – due in part to supplier constraints – but  achieving the finer details had been paramount, Mr Lockyer said.

“There is no point cutting corners on piloting only to have the full-scale plant haemorrhage money on operation. We are working with a unique process and need to make sure every detail is spot on.”

That has meant commissioning additional test work for its synthetic test material – developed in conjunction with SGS Australia and WA’s Curtin University. That was last month given the tick of approval from piloting partners at Bossong Engineering.

The former explorer says the anticipation of this phase is akin to the moments just before drilling an exploration hole, and the excitement of ‘what if’.

“We have already proven the chemistry works very well – the trick in the bake process is not whether it will work but rather upscaling it to industrial levels and ensuring the materials handling aspects are well understood,” he said.

“From here, phases 5, 6 and 7 of our pilot program hold few concerns for us.”

Looking ahead

To put it in perspective, about 2 tonnes of NdPr-rich residue material will be consumed in the fourth phase, of which only a fraction will go through to the subsequent purification and refining stages to make a few tens of kilograms of final NdPr oxide product for evaluation by customers.

It speaks to the quality of the Nolans material, of which overseas magnet manufacturers are keen to get their hands on.

The company is progressing future sales (or “off-take”) negotiations with companies in China, Japan and across Europe – which it hopes to finalise this year.

“We know we can make the product to the specifications that the magnet companies need – we just need to show we can make it at scale,” Mr Lockyer said.

NdPr is used in the manufacture of high-strength permanent magnets that are used in the automotive industry for electric components such as seats, mirrors, wipers, steering and braking, as well as in the traction motors of hybrid and electric vehicles.

NdPr prices are rebounding, but it hasn’t been because of the electric vehicle uprising – at least not yet.

Since mid-last year prices have gained ground because of China’s push to consolidate its industry, including stamping out illegal polluting and unsustainable production.

The Asian powerhouse has generally controlled the production of NdPr but recently analysts predicted that it will become a net importer.

Arafura has been working on the Northern Territory based project for the past 10 years – its first rare earth separation work completed back in 2011 and 2012.

But Mr Lockyer told Stockhead now was the time.

“In effect, what we have done for the previous eight years, while key to laying a solid foundation for the company, is less important than the progress we’ve made in the past 12 to 18 months.

“The market is finally awakening to the NdPr story and we’re well positioned to start production right when the supply crunch sets in around the early-2020s.”

 

This special report is brought to you by Arafura Resources.
This advice has been prepared without taking into account your objectives, financial situation or needs. You should, therefore, consider the appropriateness of the advice, in light of your own objectives, financial situation or needs, before acting on the advice. If this advice relates to the acquisition, or possible acquisition, of a particular financial product, the recipient should obtain a Product Disclosure Statement (PDS) relating to the product and consider the PDS before making any decision about whether to acquire the product.

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