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Great Western to build SA rare earths separation plant with Chinese partner
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25th July 2011
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TORONTO (miningweekly.com) – Rare earths junior Great Western Minerals on Monday said it had signed a heads of terms agreement with China’s Ganzhou Qiandong Rare Earth Group (GQD) to build a rare earths separation plant in South Africa, where it also hopes to build a mine.

Under the agreement, the two companies will form a joint venture, of which Great Western will own 75%, with the agreement to be formalised in August.

The new joint company, called Great Western GQD Rare Earth Materials, will design, build and operate the new separation plant, that will produce individual rare-earth oxides from ore out of Great Western’s Steenkampskraal mine, which it aims to build some 350 km north of Cape Town.

The joint venture might also get feedstock from other sources in the region, Great Western said in a statement.

“GQD's experience in the rare earth industry will ensure our new facility will be at the cutting edge of solvent extraction processing,” Great Western CEO Jim Engdahl said, adding that construction on the new plant will start in early 2012.

“This agreement is a major step in our plans to deliver separated rare-earth oxides and metals to the world market by the beginning of 2013,” he said.

In May, Engdahl told Mining Weekly Online that Great Western was in talks with titanium dioxide producers in South Africa that produce monazite as a by-product, about reprocessing their tailings and extracting rare earths from them.

He noted that if these negotiations proved fruitful, it could more than double his company’s planned rare earth production.

The separation plant is expected to cost around C$30-million, similar to what the Steenkampskraal mine’s refurbishment bill may be.

‘OLD FRIENDS’

TSX-V-listed Great Western already had a relationship established with GQD, which has supplied metals and oxides to Great Western’s UK subsidiary – Less Common Metals (LCM) – for over 15 years.

GDQ chairperson Gong Bin said the rare earths industry had gone through significant changes over the past two years.

“We at GQD welcome this opportunity to work with Great Western and our old friends at LCM in establishing a new integrated rare earths producer that is able to supply ever-increasing world demand,” he said.

China has a virtual monopoly on global rare earths production, and has been significantly cutting export quotas and local production in an effort to protect its resources and clean up the industry’s environmental track record.

Non-Chinese companies, including Great Western, America’s Molycorp and Australia-based Lynas, have been racing to develop their mines to take advantage of a supply shortage and the resulting price spikes.

Toronto-listed peer Frontier Rare Earths, which earlier this month inked a partnership agreement with Korea Resources Corp., also aims to build a rare earths separation plant in South Africa, where it owns the shuttered Zandkopsdrift mine.
 

Edited by: Liezel Hill

 

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