Rare earths developer Arafura Resources wins environmental green light
Special report: Rare earths developer Arafura has just passed all environmental conditions for its Nolans Project in the Northern Territory.
The latest approval by the Australian Government marks a key milestone towards a final investment decision for the Neodymium-Praseodymium (NdPr) project – which was already given the green light from the Territory’s environmental regulator earlier this year.
Neodymium-praseodymium is used to make magnets needed in the automotive industry for electric components such as seats, mirrors, wipers, steering and braking, as well as the actual motor.
Demand for neodymium-praseodymium oxide is expected to grow at 8 per cent each year to 2025 from the current global consumption of 33,340 tonnes.
Arafura’s cornerstone asset is the Nolans Bore NdPr deposit, one of the largest and most intensively explored deposits of its kind in the world.
Arafura (ASX:ARU) says it holds the potential to become a long-term, secure supplier of NdPr and the latest stamp of approval sets it on the right track.
The deposit contains JORC-compliant resources of 56 million tonnes at an average grade of 2.6% total rare earth oxides (TREO) that extends to at least 215 metres below the surface.
JORC compliance refers to the mining industry’s code for reporting exploration results, mineral resources and ore reserves, managed by the Australasian Joint Ore Reserves Committee.
Two-thirds of the contained rare earths are in the high confidence “Measured” and “Indicated” resources, more than enough to support at least 20 years of mining and processing operations.
Mineral resources are categorised in order of increasing geological confidence as inferred, indicated or measured.
Managing Director Gavin Lockyer told the market the federal tick of approval was key to progress future sales and funding partnerships.
“With Territory and Federal approvals in hand, Arafura is better placed to engage in meaningful discussions with potential strategic partners and other parties that may have an interest in assisting with funding the development of the Nolans project,” he said.
“Along with completing engineering studies, progressing project funding options will be a priority for the Company during 2018.”
Moving forward, Arafura has committed to incorporating approval conditions relating to biodiversity, groundwater and radiation into their final Mining Management Plan which will then go to the Territory Government’s department of Primary Industry and Resources for mining authorisation.
All this on the backdrop of a strengthening market – its target NdPr oxide has increased by 32 per cent since January 2017 on the closure of unsustainable and polluting Chinese operations, and the prospect of tightening supply and surging demand for the magnet metals.
Speaking with Stockhead last month, Mr Lockyer said a crackdown on Chinese producers would provide an opportunity for burgeoning developers like Arafura:
“China’s rare earth magnet production has been growing by about 10 per cent per annum since 2014 and at the same time its own internal consumption has been increasing.
“Our view is that by early 2020s, China will be a net importer of NdPr. It will be a pretty significant step change because it’s always been the world’s major supplier.”
The latest news follows the appointment of engineering firm Hatch as definitive feasibility study (DFS) manager in March this year.
Hatch is a globally recognised tier one engineering consultancy that has significant technical expertise in mineral processing, hydrometallurgy, detailed design and DFS development for rare earth projects and specialty minerals companies.
It has recently completed several similar engagements with clients comparable to Arafura.
This special report is brought to you by Arafura Resources.
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