Tasman another step closer to easing Europe’s REE vulnerability
Europe — and Germany in particular — can start to plan for a nearby source of rare earths, and HREE especially. This is one of the implications of the milestone reached this week at Tasman Metals (TSX.V:TSM, Frankfurt:T61, NYSE-MKT:TAS).
As reported here, Tasman has now been granted its mining lease for the Norra Karr heavy rare earth project in Sweden. This gives the company full mineral rights for an initial 25 years (although Norra Karr has an estimated mine life of at least 40 years); the rights can be renewed in 10-year increments if the mine is in operation. Moreover, it is worth noting that Tasman had to meet environmental demands and also get local community engagement, neither being a minimal feat these days. The project is, for a REE deposit, described as being unusually low in radioactive metals with less than 15 parts per million of either uranium or thorium.
The important aspect is that the deposit is dominated by the heavy rare earths.
Tasman’s is a two-pronged rare earths story. One, Norra Karr is the fourth largest HREE project in the world. When in operation, it is expected to produce annually 300 tonnes of dysprosium and 2,000 tonnes of yttrium. Second, it has a ready and waiting market in Europe, especially in Germany.
To fully appreciate the importance of the second prong, you need to put it in the context of the sensitivity felt in Europe (and, again, particularly in Germany) to their dependence for rare earths on non-European mines.
The Europeans are very conscious of their vulnerability when it comes to critical metals, hence the now well-known list of such metals of which the European Commission has called for establishing secure supplies. Back in 2010 Germany’s Economics Minister Rainer Bruederle sounded the alarm about Germany’s vulnerability in rare earths. He spent time telling a conference of industrial and financial leaders about the stranglehold China had on REE supplies, a speech that attracted wide publicity at the time.
Get our daily investorintel update
Back then, Der Spiegel magazine reported that Germany’s industrial leaders claimed that China was using its raw materials advantage to position itself politically. The Germans felt that they were being pressured by Beijing to relocate their plants to China in order to gain access to rare earths.
Last month ProEdgeWire reported Germany’s Environment Minister, Peter Altmaier, saying he wants to see the country harvesting metals including rare earths from recycled electronics as Europe’s biggest economy seeks to become less dependent on imports from China and other nations. Germany has a target to double the efficiency with which it uses resources by 2020 from 1994 levels, he said.
But, of course, there is a limit to how much REE you can recover by recycling. A close-by and secure source of mined REE is vital. Norra Karr in Sweden fits that description.
Mark Saxon, Tasman President and CEO, says the project will be able to supply much of the European demand for REE for at least 40 years. “We believe the supply security it shall provide will have a far-reaching effect,” he added.
Norra Karr is one of two European deposits in the European Union to comply with the Canadian NI 43-101 reporting standard. The other, Olserum, is also owned by Tasman. It is located 100km east of Norra Karr and is 33% heavy rare earths.
Norra Karr is located in southern Sweden, about 300km south of Stockholm, and is one of the few HREE projects than can be accessed by standard vehicles (rather than four-wheel drive ones only). There is electricity and water available, and a nearby railway line.
Expected capital costs are around $300 million, significantly less than most other rare earth projects. Production is being targeted for 2016.
The deposit was discovered in 1906. It was explored in the 1940s for nepheline, used in glass and ceramics, and in the 1970s for zircon and hafnium.
InvestorIntel is a trusted source of reliable information at the forefront of emerging markets that brings investment opportunities to discerning investors.