Arafura explains how to cut a billion dollars in operating cost from an REE project
May 17, 2013 – Chris Tonkin, CEO of Arafura Resources (‘Arafura’, ASX: ARU) in an interview with Tracy Weslosky, Publisher of ProEdgeWire, reveals some very important news “especially for shareholders” about the Nolans Rare Earths Project in central Australia. Chris wastes no time in noting that Arafura “is making some fairly major changes to the company and the Project…The headlines is that we’re proposing to cut up to a billion dollars off our costs”.
A rather intrigued Tracy naturally asks “how do you propose to do that?’ Chris is all too pleased to oblige noting that “it’s actually going to be a lot easier than you think”. Quite simply after talking to the governments of South Australian and the Northern Territory, Arafura has decided “to move the planned intermediate processing plant in Whyalla, South Australia to the Northern Territory, much closer to the site of the mine.” Chris notes that the move alone “cuts somewhere between 150 to 200 million dollars off capital costs….Once, we make the move, we still have to decided what to do with the separation plant but we’re likely to move that as well…probably to a location where there is access to hydrochloric acid, which means we don’t have to build a chlor-alkali plant, which takes another 300 million or so off the project’s cost”.
Chris also said that through an additional processing method selection, a further half a billion dollars in costs will be cut off. Apart from the dramatic cost cutting strategy, Chris stressed that Arafura is working closely with its Chinese partner East China Mineral Exploration and Development Bureau (ECE), which “has introduced us to Chinese rare earth experts who we are working with on a project optimization and review process on capital and operating costs and that’s actually no counted in our billion dollars [savings] believe it or not…”Arafura is set on its course to production and to becoming one of the main REE products suppliers in the world including significant quantities of heavy rare earths. All of these factors help validate the advanced stage of the Nolans Project and bring it one step closer toward commercialization.
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