PERTH (miningweekly.com) – The valuation of the Nolans rare earth project, in the Northern Territory, has increased as prices continued to rise, project owner Arafura Resources reported on Friday.

MD and CEO Steve Ward told shareholders that at the current prices, Arafura would receive $1,5-billion each year from rare-earth sales alone, before other products were considered.

“The era of low-priced rare earths is behind us and the future prospects are very encouraging,” Ward said.

Industry analysts have attributed the price increase to a combination of the decrease in export quotas during the first half of 2011 as announced by the Chinese Ministry of Commerce, as well as the increased demand, especially for cerium and lanthanum.

Consequently, the Nolans rare earths mix average valuation currently stood at around $75,23/kg, based on the current Metal Pages China free-on-board prices for rare earth oxides.

“The recent further reductions in export quotas announced by China reinforce the importance of new supply sources. Arafura is one of the very few projects which is sufficiently advanced to come into production in the short to medium term and be available to supply users worldwide,” said Ward.

China currently supplies around 95% of the world’s need for strategic metals, which are critical to high-tech industries, including electric vehicles, rechargeable batteries and energy efficient lights.

Ward said that as rare earths only constituted a small portion of the cost of finished products, the impact of higher prices on the final article was not significant. However, more price hikes were likely if China continued to restrict export in the interest of preserving resources for domestic use.

“Supplies will remain tight even when new projects are factored in,” said Ward.

“We have begun 2011, with a clear determination to drive forward our Nolans project towards securing project finance by the end of 2011 and to start production in the second half of 2013,” he added.

The Nolans project hosts an estimated 850 000 t of rare-earth oxides, 3,9-million tons of phosphate pentoxide, and a further 13,3-million pounds of uranium.

Mineral concentrate from the project would be processed at the Whyalla rare-earths complex, in South Australia, which will comprise a series of chemical plants and a processing plant, where chemicals such as hydrochloric acid and sulphuric acid would leach out the rare earths, phosphate and uranium, for ultimate recovery and sale.

Arafura was planning to produce around 20 000 t/y of rare-earth oxides and 80 000 t/y of phosphoric acid at the Whyalla complex, starting in 2013.

 

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