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 adjusted from 20 000 t to 14 000 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
Comprehensive work programmes aimed at commercialising the Nolans rare earths project have identified several improvements to the existing project structure that will deliver a more competitive and efficient project, with greater capacity to withstand cyclical downturns in rare earth prices.

These studies, targeting preferred phosphate-rich material types in the project's resource, will deliver an optimal plant feed and throughput that will result in an adjustment to the planned yearly rare earths output to 14 000 t of total rare earth oxides over the more than 20-year operational life of the project.

Identified improvements also include the planned yearly output of 110 000 t of a merchant-grade phosphoric acid product, which will be sold to the fertiliser industry.

In addition, the expected capital expansion that was initially required in the seventh year of operation has been deferred to well beyond the project’s initial financing period, following investigations into the mining schedule.

“We have been steadily rationalising the business, which has included significant reductions in overheads, along with an internal review of results from our comprehensive pilot and tests programmes,” Arafura MD Gavin Lockyer has noted.

He adds that the project improvements have achieved important reductions in funding and processing risks in a capital-constrained environment.

“Combined with our recent submission of the Nolans environmental impact statement, we continue to make solid progress towards commercialisation,” he concludes.

After implementing the improvements, the way forward for Arafura will be to start with the scope and tender for the next phase of engineering design, for final feasibility of the project, and to escalate discussions with potential investors, customers and financiers to align feasibility with expectations.

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.