Northern rare earth potential
July 26, 2012
China controls 97% of the world’s rare earth reserves. Three rare earth prospects in the far north are moving towards development.
Rare earth elements consist of 17 elements in the periodic table, specifically the fifteen lanthanides plus scandium and yttrium. Scandium and yttrium are considered rare earth elements since they tend to occur in the same ore deposits as the lanthanides and exhibit similar chemical properties. Rare earth elements are heavier than iron.
According to China’s draft rare-earth development plan, annual rare-earth production may be limited to between 130,000 and 140,000 [metric tons] during the period from 2009 to 2015. In September 2011 China announced the halt in production of three of its eight major rare earth mines, responsible for almost 40% of China’s total rare earth production. Rare earth elements are not exchange-traded in the same way that precious (for instance, gold and silver) or non-ferrous metals (such as nickel, tin, copper, and aluminium) are. Instead they are sold on the private market, which makes their prices difficult to monitor and track.
The most promising three northern rare earth projects are:
- Hoidas Lake, Saskatchewan has one of the highest proportions of neodymium (Nd) (at 22%) present in any known rare earth deposit. This makes it strategically important to the permanent magnet industry as demand for permanent magnets increases dramatically. Hoidas Lake lies 50 kilometers northeast of Uranium City, Saskatchewan. With the shipment of a large sample to the Guangzhou Research Institute of Non-ferrous Metals laboratory in Guangzhou, China, the last phase of metallurgical test work is in progress. With results expected in 2012, the Hoidas Lake project could proceed through the preliminary feasibility and feasibility stages with the goal of being in production in 2015/2016. The proponent is Great West Minerals Group (ticker GWG on the TSX)
- The Nechalacho rare earth project is located at Thor Lake, Northwest Territories. The proponent is Avalon Rare Metals (ticker AVL on the TSX and NYSE AMEX). The project and is recognized internationally for its exceptional wealth of heavy rare earth elements. As of May 2012, over $57 million and 85,240 metres of drilling has been completed in exploring and developing the property. With the resource estimation update released in July 2012, estimated Measured Mineral Resources in the Basal Zone are 8.90 million tonnes, grading 1.64% TREO and 21.7% HREO/TREO, using the base case $260/tonne NMR cut-off. Avalon plans to begin mining in 2016 with full mining and processing scheduled for 2,000 tonnes per day (tpd) of ore resulting in an annual production of approximately 10,000 tonnes of TREO, 18,000 tonnes ZrO2, 1,700 tonnes Nb2O5, and 100 tonnes Ta2O5.
- The Kvanefjeld multi-element project in southern Greenland has grown rapidly to become one of the largest deposits of rare earth metals in the world. Yet the value of a rare earth element resource is not just dependant on the overall grade and tonnage of the resource.The proponent is an Australian junior exploration company Greenland Minerals and Energy Limited (GMEL; ASX: GGG). The company recently released a pre-feasibility study (PFS) for the Kvanefjeld rare earth element (REE) project. According to the PFS, Kvanefjeld will be a multi-commodity project with annual production of 2.6 million lbs U308, 4,200 tonnes of heavy rare earth hydroxide, 10,400 tonnes of mixed rare earth carbonate and 26,200 tonnes of light rare earth carbonate. The CAPEX for developing a mine would be over $1.5 B. This project is still years away from development.
Commentary
It is noteworthy that the metallurgical test work for the Hoidas Lake project is taking place in China. The Nechalacho project is moving to development in the next 4 years. The Kvanefjeld project would have a much longer development time horizon.
Sources
- a)Graphic from http://www.getbuckyballs.com/rare-earth-metals-magnet-balls/
- b)http://en.wikipedia.org/wiki/Rare_earth_element
- c)http://www.gwmg.ca/html/projects/exploration/hoidas-lake/index.cfm
- d)http://avalonraremetals.com/projects/thor_lake/thor_lake_intro/
- e)http://www.ggg.gl/rare-earth-elements/rare-earth-elements-at-kvanefjeld/ and http://www.ggg.gl/docs/ASX-announcements/Open-Briefing-PFS-Outcomes-and-Outlook-1-June-2012.pdf