• Scoping Study highlights Stage 1 as a low-cost path to de-risk Cummins Range rare earth and phosphate development
  • Stage 1 Capex estimated at $45m with overall project post-tax NPV and IRR of $333m and 27%
  • Unique Cummins Range resource gives RareX investors exposure to two global megatrends: food security and the clean energy revolution


A simple, low-cost direct shipping ore (DSO) phosphate project would cornerstone the expansion Cummins Range into a long-term, high-value, and low-risk rare earths operation in WA’s Kimberley.

The enhanced scoping study – the first proper look at the economics of building a project – envisaged a three-stage, 18 year project development strategy for Cummins Range, Australia’s largest undeveloped rare earths project and a significant source of phosphate.

The 519Mt Cummins Range resource is centred around two dykes: the larger one to the south hosts most of the higher-grade rare earths, while the northern dyke is more phosphate dominated.

The first three years of production, called Stage 1, involves a simple mining and crushing operation to produce a phosphate DSO that can be used as direct application fertiliser, RareX says.

This requires low capex of $45m to deliver robust economics from the production of about 300,000tpa of ore grading 23% P2O5.

Importantly RareX have announced very high bioavailability of the phosphate in their rocks – meaning more phosphate is available to the plants than is typical; up to five times industry standard ‘high’.

RareX says that this highly advantageous property, coupled with the lack of chemical treatment and its location in the Kimberley supporting the traditional owners, could really bolster the product’s value-in-use. Stage 1 could be a stand-alone project in its own right but RareX have optimised to the full 3 stage project which deploys 3 stages of capital.

Stage 1 is a key de-risking step into the development of Cummins Range as a significant REE and phosphate project, the company says.

“This staged development approach has the benefits of initiating early cashflows, building confidence with the regulators on environmental and heritage management, furthering community relationships and social performance, providing greater mineral resource definition, allowing bulk samples for metallurgy and piloting, and establishing a functioning supply chain; all of which substantially de-risk Stage 2 which transitions the project into a rare-earth critical mineral mine,” it says.

The $304m capex Stage 2 beneficiation operation would produce 550,000tpa of higher value phosphate-rare earth mineral concentrate, containing about 169,000t of P2O5 and 12,000t of total rare earth oxides (TREO).

Stage 3 will see a $63m upgrade to the Stage 2 plant in year 13 to produce a concentrate from the un-weathered, fresh rock. This stage should deliver further improvement and optionality in post beneficiation upgrades due to mineralogy factors.

Across all three stages, for the mid-case, RareX envisages EBITDA of $1.45bn, NPV8 of $549m and IRR of 39% (pre tax). Post tax values are $333m and 27% respectively. This is respectful in its own right, but given it only takes a $45m injection and considering all royalties, native title contributions, mine closure and contingency have been considered, as well as moderate pricing assumptions, this is a very good outcome for RareX.


‘Exceeds expectations’

RareX chief executive officer James Durrant said the Scoping Study exceeded the company’s expectations and validated the company’s evolved project development pathway.

“The staged approach, enabled by clean rock phosphate for direct application, as Stage 1, positive flotation and leach performance of monazite-apatite from the regolith as Stage 2, and the upside of coarse monazite in the fresh rock for Stage 3, positively differentiates us from more conventional rare earth developments which typically have less favourable geology and more complex infrastructure requirements,” he says.

“The products have high value-in-use potential and we’re working to find the right buyers for Stage 1 and Stage 2, across Australia and SE Asia, having recently appointed two offtake consultants.

“This follows the recent board appointment of Danny Goeman, ex FMG global head of marketing, sales and shipping, and ex Danakali Limited where he and I worked on securing a binding take or pay fertiliser offtake deal during the study phase.

“The low upfront capital and simple Stage 1 makes this fundable and deliverable by RareX, and we’ve materially progressed the pre-requisites for regulatory approval for Stage 1 giving us the best chance of becoming an operator in the next couple of years.”

RareX has an MOU with OrdCo for the advancement of product definition and potential offtake and distribution, and is being supported by independent consultants for the placement of products within Australia, New Zealand and offshore in South East Asia.

DSO product samples have been prepared in support of Stage 1 marketing efforts and mineral concentrate product samples are being prepared in support of Stage 2 offtake negotiations.

Durrant added that the company’s geologists were also extending target generation on site to a similar anomaly to Cummins Range, which could integrate into its development plans. Anything more identified would add to the already impressive resource which sits currently containing 1.6 million tonnes of TREO and 24 million tonnes of contained phosphate.



Cummins Range: tapping into two global megatrends

The unique Cummins Range resource gives RareX investors exposure to two global megatrends: food security and the clean energy revolution.

Phosphate fertilisers are added to farmers’ fields in huge quantities and have an important role to play in boosting food supply as the global population looks to surge past the 8 billion mark by 2024.

Following a period when prices of phosphate fertiliser increased rapidly, prices are now expected to fall modestly in 2023 and 2024.

However, demand is likely to remain high. In fact, CRU estimates demand could climb from about 200Mt in 2021 to almost 300Mt by 2045.

Phosphate is also seeing increasing use in the battery sector due to the growing popularity of lithium iron phosphate (LFP) batteries that trade some energy density for safety, lower cost and longer life spans.

Meanwhile, high value neodymium and praseodymium represent the bulk the total rare earths value at Cummins Range.

Adamas Intelligence forecasts that due to demand from the electric vehicle and wind power sectors the value of NdPr oxide consumed will increase eleven-fold by 2035.

Prices are forecast to rise from current levels of US$67,000 per tonne to US$100,000 per tonne by 2025, increasing steadily to over US$200,000 per tonne by 2035.


Upcoming milestones

Durrant noted that over the next 6-9 months, the company will focus on finding the right offtake partners, advancing the Stage 1 plan to a Definitive Feasibility Study and Stage 2 to a Pre-Feasibility Study.

The company will also complete submissions for mining approvals.

Durrant will provide more information during a 10-15 minute webinar on 1st September 2023 on the outcomes of the Scoping Study and address any questions from investors. RareX requests that questions be submitted on their investor hub.




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.