TORONTO (miningweekly.com) – Montero Mining, which owns a rare earth project in Tanzania, is accelerating its development plans, and believes it can have a small mine up and running at its Wigu Hill project as early as 2012, CEO Tony Harwood said in an interview on Wednesday.
The Toronto-listed company had previously indicated it would achieve first output around 2015/16, but decided it would be better to get its foot in the rare-earths door earlier.
“The first out of the gate in terms of production is going to win it,” Harwood told Mining Weekly Online.
China produces around 97% of the world’s rare earths, used in a wide range of modern technologies, including hybrid cars, wind turbines and smart phones, and has been cutting back on export and production quotas, leading to a supply squeeze.
Companies including Australia’s Lynas Corp and Colorado-based Molycorp have been racing to get their rare earth mines into production to take advantage of the soaring prices that have resulted from the supply shortage.
Some market watchers, including Goldman Sachs, have said supplies would remain tight until around 2013, when Lynas and Molycorp ramp up their mines, which could lead to an oversupply and falling prices.
Montero aims to publish a maiden resource for its Wigu Hill project by early July, with both a prefeaseibility study and a feasibility study for a small operation due by the end of 2012, Harwood said.
Harwood said the first phase would be “more of a quarry than a massive operation”, producing “a few thousand tons a month” of rare earths concentrate.
At the same time, the company will carry out a feasibility study for a larger second phase, which would include the possibility of building a rare earths refinery, to produce the more valuable rare-earths oxides.
Montero was considering building the refinery in South Africa, but Korea, India and China were also potential locations.
Despite the fact that Goldman Sachs and other analysts have said the rare earths rally might come to an end by 2013, Harwood said there is still “massive demand in the marketplace” for the metals.
“We’re being contacted regularly by groups that want off-take, that want to participate in our project in terms of joint ventures, or participate in the company,” he commented.
These groups included end users from the automotive sector, and “quasi-government” companies from countries like China, Japan, Korea, as well as European nations.
Harwood said that the Wigu Hill orebody is similar to Molycorp’s Mountain Pass mine in California.