Greenland Minerals seeks to push the start button ― and Australia wants to play uranium catch-up
Greenland is seemingly on the road to uranium-producer status (and rare earths production that could equal that of Mt Weld), while Australians ponder their failure to take full advantage of their uranium riches.
Following our Friday report on the move by Greenland’s parliament to remove the zero-tolerance policy on extraction of rare earths, Greenland Minerals & Energy (ASX:GGG) issued a statement saying the policy change means it can move into acquiring a mining permit.
Its Kvanefjeld project has been a long time in the making. The presence of uranium in that part of Greenland was discovered in the 1950s and through the 1960s, 1970s and 1980s Danish research institutes investigated the mineralisation; back then Denmark was looking to get into development of nuclear power but when that position was abandoned in 1983,work stopped at Kvanefjeld. In 1988 the zero-tolerance policy was introduced. A statement by GGG points out that it was the transition in 2009 of Greenland moving from “home rule” to “self rule” that opened up the prospect of mining; thenceforth, Greenland assumed full authority over its mineral and hydrocarbon rights.
Coincidentally, a day before the news arrived from Greenland of this new policy, Sydney-based brokers Blue Ocean Equities put out a report anticipating the new law passing.
On the rare earths front, Blue Ocean sees Kvanefjeld in production by 2017 at an annual rate of 23,000 tonnes a year of total rare earth oxides; as the report notes, that would put it in the same level as Lynas Corp’s Mt Weld (23,000 tonnes a year) and not too far behind Mountain Pass (37,000 tonnes).
Just to bring readers up to date, the REE distribution is thus: lanthanum 26.42%, cerium 44.11%, praseodymium 4.31%, neodymium 13.18%, samarium 1.4%, europium 0.12%, gadolinium 0.99%, terbium 0.14%, dysprosium 0.99%, holmium 0.16%, erbium 0.46%, thulium 0.04%, ytterbium 0.33%, lutetium 0.03% and yttrium 7.33%.
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It is worth noting that the project also contains zinc with plans to sell 5300 tonnes of concentrate a year. Just this week several analysts upgraded their outlook for zinc. The galvanising metal closed Friday at $1955/tonne but analysts are calling for $2400/tonne in 2015 and one says by 2016 zinc will be at $3500/tonne.
Blue Ocean sets out GGG’s task: “The main challenges for GGG will be obtaining a mining licence, funding, generating confidence among investors in the REE and uranium markets”. Each of those is a substantial hurdle in itself.
Kvanefjeld, according to GGG, is the largest known rare earths deposit outside China. It is also the fifth largest uranium deposit in the world. Interestingly, the third largest is Häggån in Sweden, owned by another Australian company Aura Energy (ASX:AEE). The largest, of course, is Olympic Dam in South Australia.
Which leads us into a report from the Australian Uranium Association, Making Australia Number One.
It begins: “Australia has the world’s largest endowment of uranium but has never quite made to be the world’s number one uranium producer. It is time we aimed for that”.
Here are the rankings of what are termed “reasonable assured resources” in terms of world share:
Russia and Canada, 9% each
Brazil, Namibia, South Africa, 5% each
Ukraine and Uzbekistan, 2% each,
Mongolia and Jordan, 1% each.
The report notes that Australia in 2008 got to within 600 tonnes of Canada’s production, but since then has been overtaken by Kazakhstan as No. 2. Kazakhstan has now overtaken Canada to take the lead and is increasing production by around 10% a year ― and has declared it wants to produce 30% of the world’s uranium; the central Asian state has formed links with uranium users in Russia, Japan and China, as well as taking a significant stake in Westinghouse and also getting into joint ventures with French and Canadian companies.
Says the report of the way in which Australia has lost ground in this game: it is time that policies were put in place to take advantage of the country’s huge resources.
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