RareX goes shopping for offtake partners for its Cummins Range phosphate

After confirming the phosphate at Cummins Range is suitable as direct shipping ore (DSO), RareX has parcelled up samples looking for buyers, targeting Australian and SE Asian markets.

Phosphate fertilisers are widely used across the globe, and at least one source has forecast that the market could grow at a compound annual growth rate of 5% between 2022 and 2028 to reach a value of US$90.25bn.

It is also seeing increasing use in the battery sector due to the growing popularity of lithium iron phosphate (LFP) batteries.

Interest garnered from potential offtake partners will give RareX (ASX:REE) a better idea of the market and grade requirements in order to optimise its Stage 1 and Stage 2 plans for the project, located in WA’s Kimberley region.

The feedback, RareX says, is a key step that supports the project development strategy, which includes mining of higher-grade materials for sale as direct application fertiliser during Stage 1 DSO operation before transitioning into a Stage 2 beneficiation operation that will upgrade lower-grade material to produce phosphate concentrates that could be fed to phosphoric production plants or be used as direct application fertiliser.

“Product grade, bioavailability and contained deleterious, or potentially toxic, elements are key functions within pricing mechanisms,” the company said.

“RareX will undertake tests to better understand the sample characteristics, which in combination with market feedbacks, will assist RareX in optimising product specifications design and value-in-use.”

The explorer recently changed tack from pure REE to a hybrid phosphate-REE development and direct shipping ore (DSO) model, essentially paying for REE development with cash flow from the phosphate sales.

Cummins Range: a significant phosphate REE project

Cummins Range has Indicated and Inferred Resources of 519 million tonnes (Mt) grading @ 0.32% total rare earth oxides (TREO) and 4.6% phosphate for contained resources of 1.6Mt TREO and 24Mt of phosphate.

A big value-add is the contained magnet REEs neodymium and praseodymium (NdPr) which make up a significant 22% of the TREO content.

RareX CEO James Durrant reckons switching into a phosphate-REE development was just what the doctor ordered.

“We’re excited to be at the stage where we can now talk meaningfully with future buyers about our future product and the volume profile we can deliver,” Durrant said.

“Stage 1 of our project is selling direct shipping ore, direct application fertilisers before transitioning to Stage 2, which sees the installation of beneficiation to upgrade the lower-grade materials for a product suitable for the phosphoric acid market.

“The feedback from potential customers will help us define the transition timeframes from Stage 1 to Stage 2 and so we look forward to receiving feedback across our product grade blend spectrum.”

A diamond drill programme has been underway, and an RC programme is pending. Both these are infill drilling led, focused on upgrading the shallow high-grade phosphate DSO resource in further support of Stage 1 production.

A scoping study for the Stage 1 DSO mining operation is also scheduled for delivery in July 2023, with a fast-tracked Definitive Feasibility Study (DFS) due at the end of this year.

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.