TORONTO (miningweekly.com) – Midtier precious metals producer Iamgold Corporation on Thursday said it had a 466.8-million ton rare-earth element resource at a deposit just north of its Niobec mine in Quebec.

The resource, hosted in carbonatite rock, has a grade of 1.65% total rare-earth oxides, with light rare earths making up over 95% of that.

Toronto-based Iamgold said last year it was considering listing the Niobec niobium mine in Toronto or Hong Kong, after selling a minority stake to a strategic partner.

The company is also mulling a near-$1-billion expansion at the mine to triple output.

While the focus has been on niobium, added to steel to strengthen it, Iamgold decided to drill up a resource at the rare earths deposit after demand and prices for the group of elements used to make a wide range of technologies – from iPads to electric vehicles – shot up between 2009 and 2011.

Since the middle of last year, prices for most rare earths have eased substantially, with Technology Metals Research founding principal Jack Lifton this week predicting further falls.

China is both the biggest producer and consumer of rare earths, and the country’s move to curb exports by some 40% in 2010 was the major force behind the surge in prices.

Colorado-based Molycorp is refurbishing and expanding the Mountain Pass rare earths mine in California, set to start production by the end of the year, and Lynas Corp is building the Mount Weld mine in Australia, also set to start output later in 2012 after the Malaysian government gave it conditional approval to produce from the processing plant it is building there.

Both companies will produce a majority of light rare earths, mainly cerium and lanthanum, leading experts such as Lifton and Industrial Minerals Company of Australia director Dudley Kingsnorth to forecast a surplus of these types.

Iamgold CEO Steve Letwin, meanwhile, said a scoping study would determine the market for the company’s rare earths deposit, which was “constantly evolving and expanding”.

“We will explore alternative strategies for developing this resource, such as joint venture partnerships and strategic alliances, which will not impact our gold business,” he said in a statement.

Analysts at UBS calculated the rare earths resource at Niobec could be worth $270-million, based on a 50% discount to the implied valuation of other rare mineral companies.
 

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