Name and Location
Nolans rare earths project, Northern Territory, Australia.

Client
Arafura Resources.

Project Description
Nolans is one of the most advanced rare earths development projects globally. The Nolans Bore resource is rich in neodymium and praseodymium (NdPr) – the key rare earths used in high-strength permanent magnets.

The project has total mineral resources estimated at 47-million tonnes at 2.6% rare-earth oxides using a 1% cutoff grade.

The ‘Nolans Development Report’ (NDR), which was released in September 2014, details Arafura’s plans to develop its wholly owned project.
It will entail a mine, concentrator and rare earths intermediate plant, as well as related infrastructure, to be constructed and located at the Nolans site.

The proposed mining operation will use conventional openpit truck and excavator mining methods, supplemented by drilling and blasting for ore and waste.

Pit optimisation studies have generated schedules showing a mine life of 25 years, based on measured and indicated resources, and of more than 40 years, based on total resources. Dilution is estimated at 11.4% (plus 0.1% mining loss) and 15.7% (plus 0.2% mining loss) respectively.

According to the NDR, geotechnical inputs, including pit slope parameters, have been developed for pit optimisations and pit design. A series of pit shells has been produced and the detailed pit design will be completed for the definitive feasibility study (DFS).

A strategic mining schedule for the measured and indicated optimisation scenario is based on a maximum overall mining rate of ten-million tonnes a year to produce an average of 900 000 t/y of plant feed. The life-of-mine optimisation scenario is based on a maximum overall mining rate of ten-million tonnes a year to produce an average of one-million tonnes of plant feed each year.

Meanwhile, the project’s post-beneficiation flowsheet has changed from a single complex, intended to be located at Whyalla, to a split configuration comprising a rare earths intermediate plant at the Nolans site and an offshore rare earths separation plant in an established chemicals precinct.

Sulphuric acid instead of hydrochloric acid will be used in the preleach circuit and the project no longer includes a chloralkali plant and hydrochloric acid recycle. It is no longer necessary to produce sodium hydroxide and hydrochloric acid on site, and the reduced quantities required will be imported to both processing complexes.

Beneficiation at the Nolans mine site will comprise crushing, grinding, magnetic separation and flotation to produce a blended concentrate.

The beneficiation flowsheet is defined with a high level of certainty and is ready to be progressed to DFS level.

Concentrate will be pumped through a slurry pipeline to a rare earths extraction plant at the Nolans processing site. Rare earths will be extracted from the concentrate through chemical processing to produce a high-quality rare earths intermediate product. This flowsheet is well developed, with some parts requiring limited confirmatory work to provide more detail for the certainty of the process. Detailed process design criteria, and equipment selection and sizing have been undertaken.

Tailings, residue and radionuclide retention will be confined to the Nolans site.

Rare earths will be separated into the final rare-earth oxide products at the offshore rare earths separation plant using solvent extraction, followed by precipitation and calcination.

Arafura’s detailed research programme at Ansto, including minipiloting and rare earths separation trials, has delivered design parameters for upscaling to a production-scale installation and the corresponding mass balance and raw-material requirements.

Yearly production has been estimated at 20 000 t of rare-earth oxide equivalent.

Net Present Value/Internal Rate of Return
The project has an estimated net present value of A$2.045-billion after tax, with a 10% discount rate.

The project has an internal rate of return of 21.4% and an after-tax payback of capital in the fifth year of operation.

Value
Overall capital costs, including contingency, are estimated at A$1.43-billion.

Duration
The NDR envisages construction to start in mid-2016 and production in early 2019.

Latest Developments
Arafura has submitted the environmental-impact statement (EIS) for its Nolans rare earths project to the Northern Territory Environment Protection Authority (NTEPA), a significant project milestone for the company.

The EIS, which will be available for public comment from early next week, represents the culmination of a detailed body of work that initially got under way at the Nolans site in 2006.

The EIS has been prepared by global environment and resource consulting group GHD and addresses the full range of environmental, economic and social issues relating to the project.

The EIS, which includes a comprehensive risk assessment and various studies, has found that, in the long term, the impact of the operation on the quality of available groundwater for pastoral or domestic use is negligible.

The radiation doses from naturally occurring radioactive elements in the deposit to which Arafura’s workers or people living closest to the operation are exposed to have also been found to be negligible.

Further, biodiversity studies have found no evidence that the project will impact significantly on the identified vulnerable animals in the region.

With this in mind, Arafura is confident that all identified project impacts and risks can be mitigated through careful management.

The company aims to complete the environmental approvals process, as well as the native title and groundwater extraction approvals process, by year-end.

Meanwhile, Arafura has reduced the operating costs for its Nolans project by 15%.

Operating costs have been lowered to A$12.36/kg, which MD Gavin Lockyer has said entrenches Nolans in the lowest quartile of the cost curve.

Further improvements in the operating costs should assist the company in advancing and financing Nolans when the broader rare earths market improves.

The 15% saving in operating costs comes after capital review studies suggested the resizing of equipment, laboratory-scale testwork identified process improvement efficiencies and studies, as part of the Nolans EIS, confirmed that the estimated workforce would be smaller than previously expected.

Arafura has reported that work is under way to further enhance the Nolans project. One focus area is to review the impact of a reduced mining rate on rare-earth oxide production. The company has reviewed the mining schedule to optimise the mining rate to provide upfront capital savings and defer capital expansions to well after any initial project finance period.

Arafura is also investigating whether the project could benefit from the production of commercial quality by-products, such as phosphates, which currently report to waste streams.

“If a merchantable phosphate product can be realised rather than ending up as waste, this will have a number of advantages, including enhanced project returns and a reduced environmental impact at Nolans,” Lockyer has commented.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Arafura Resources, tel +61 8 6210 7666, fax +61 8 9221 7966 or email media@arafuraresources.com.au.