Australia preparing to meet the world’s demand for rare earths
Australia, depending on how you see it, is the world’s largest island or the world’s smallest continent, with a population density of only 3 persons per square kilometre. Australia is a heavily urbanized country with only 10% of the population living outside of urban areas. So apart from a few large cities the country is basically empty apart from the Kangaroos, a few Koalas and lots and lots of mine sites.
Australia ranks very high for mineral resources: It has the world’s largest resources of gold, iron ore, lead, nickel, rutile, uranium, zinc and zircon. The second largest resources of bauxite, cobalt, copper, ilmenite, niobium, silver, tantalum and thorium. Resources of black coal, brown coal, magnesite, tungsten, lithium, manganese ore, rare earths, and vanadium are ranked in the top five in the world.
Rare earth neodymium (Nd) and praseodymium (Pr) forecast to be in deficit from 2019/20
Rare earths are a collection of seventeen chemical elements, and despite what the name says they are relatively plentiful in the earth’s crust. Because of their unique magnetic, luminescent, and electro chemical properties, these elements when alloyed with other materials help make many technologies perform with reduced weight, reduced emissions and energy consumption; or give them greater efficiency, performance, speed, durability and thermal stability. Two key rare earths used to make the most powerful magnets used in EVs are neodymium (Nd) and praseodymium (Pr).
Given the projected deficit for rare earths from ~2019/20 onward, Australia is very likely to be the source of new supply to meet growing demand for rare earths.
NdPr oxide demand versus supply projection to 2025
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Two Australian companies that are set to be big players in the high demand rare earth sector in the very near future are Alkane Resources Ltd. (ASX: ALK | OTCQX: ANLKY) and Arafura Resources Ltd. (ASX: ARU).
Alkane Resources Ltd.
The Dubbo project has the potential to deliver rare earths from the Central West of NSW to international markets. The Project is a large in-ground resource. Many future industries (such as clean energy, electric vehicles, artificial intelligence, and modern health care) rely on zirconium, hafnium, niobium and/or rare earths as essential components. It is the most advanced poly-metallic project of its kind outside of China, making it a potential strategic and independent supply of critical minerals for a range of sustainable technologies and future industries. It has a potential mine life of 70+ years. The Dubbo Project is owned by Australian Strategic Materials Limited (ASM), a wholly owned subsidiary of Alkane.
Alkane’s 100% owned Tomingley mine, produces up to 70,000 ounces of gold per year, the proceeds of which provide a revenue stream for Alkane to fund the Dubbo project corporate and exploration expenditures.
Arafura Resources Ltd.
Arafura’s 100%-owned Nolans project is located 135km north of Alice Springs town in the Northern Territory, Australia. It plans in the next few years to become a long-term secure supplier of neodymium and praseodymium (NdPr). Nolans could supply up to 10% of the worlds demand of neodymium and praseodymium when in full production, planned for 2020/21. World demand is outstripping supply and a shortfall of rare earth magnets is predicted by 2020.
The project’s cornerstone asset is the Nolans rare earths-phosphate deposit, one of the largest and most intensively explored deposits of its kind in the world. The deposit contains a compliant Mineral Resource of 56 million tonnes at an average grade of 2.6% total rare earth oxides (TREO) that extends to 215 meters below the surface. Arafura is focused on producing a high purity NdPr oxide product for use by advanced magnet and magnet alloy customers as its flagship product.
It may seem that Australia has an abundance of almost everything, except people. What the country is though is arguably the planets most prolific mining country, leading the list of many of the globes essential mining resources.
Matthew Bohlsen holds a Graduate Diploma in Applied Finance and Investment (similar to CFA), and a Graduate Diploma in Financial Planning. He has 30 years ... <Read more about Matthew Bohlsen>