TORONTO (miningweekly.com) – With two separate rare earths elements (REE) projects being moved up along the value curve towards production in South Africa, the country is poised to become a significant contributor to a market that is struggling to diversify from a China-dominant supply.

TSX-V-listed Great Western Minerals Group (GWMG) on Thursday published a feasibility study on its Steenkampskraal REE project, located in South Africa’s Northern Cape province.

The feasibility study indicated a C$274-million after-tax net present value and a 50% after-tax internal rate of return for the project.

The study outlined plans for developing a sophisticated underground mine and REE processing plant based on what it believes to be one of the highest-grade REE deposits globally.

GWMG, which has ambitions to become a fully integrated REE supplier and which already operates a REE alloys business based in the UK, said that the feasibility study demonstrated the economic viability of the project and confirmed that the Steenkampskraal project was a sound development foundation for GWMG's integrated business model.

The study envisioned a 13-year mine life, generating total revenues of about C$1.7-billion, from production of about 5 000 t/y of total rare earth oxides (REO), including yttrium oxide. However, lanthanum and cerium would not be produced as saleable products unless market conditions become more favourable.

The operation would produce saleable REO at an average yearly rate of 1 512 t.

The capital cost had been pegged at C$118.8-million, with post-commercial production capital expenditures of C$51.5-million.

GWMG believes that it can produce saleable REO at cash operating expenditures of C$38.67/kg.


The feasibility study undertook an economic analysis of the forecast price for each saleable REO, resulting in a unit price of $76.69/kg. 


The project currently has Canadian National Instrument 43-101-compliant proven reserves of 12 800 t of total REO and probable reserves of 56 600 t of contained total REO.

"The completion of the feasibility study is a major accomplishment for our company as we execute our mine-to-metal strategy. Importantly, it validates the potential of this project and that it is technically feasible, financially robust and environmentally sound.

“The Steenkampskraal project has many favourable attributes including its mining-friendly jurisdiction, well established local infrastructure, high-grade REE orebody, continued exploration potential and low capital requirements,” GWMG president and CEO Marc LeVier said.

He noted that with the positive outcome of the study, the company’s focus now turned to securing the necessary funding to develop the project and to get to production.

NORTHERN CAPE RIVAL

Meanwhile, TSX-listed Frontier Rare Earths, which is developing the Zandkopsdrift REE project in South Africa’s Northern Cape, on Thursday said that it had completed further studies required to improve the project’s proposed flow sheet, as proposed in a prefeasibility study (PFS) slated for release later this year.

The company said that this testwork was successful in confirming a number of the proposed engineering design and process improvements. As a result, a number of changes have been made to the PFS flow sheets, which were expected to have a significant positive impact on the current capital and operating cost estimates for the PFS.

The remaining engineering design work for the PFS is scheduled to start this quarter and is expected to be complete, together with the results of the PFS, in the fourth quarter.

Frontier also said that the recently completed metallurgical testwork had identified an opportunity to produce potentially significant quantities of manganese sulphate as a by-product at Zandkopsdrift.

Testwork on waste streams produced by the impurity pre-leach circuit, of which manganese is one of the principal constituents, had indicated that a simple, low-cost, evaporation and crystallisation process could produce a manganese sulphate product.

Manganese sulphate is used as a micronutrient in animal feed and in fertiliser and is also used as a chemical intermediate. Its high solubility in water makes it particularly desirable for the animal feed and fertiliser applications.

The testwork completed to date had resulted in manganese sulphate that met the specifications for animal feed and fertiliser applications and further testwork is currently being undertaken by HPD Systems, a division of Veolia Water Solutions & Technologies.

Based on the results of this testwork, which is not expected to delay completion of the PFS, the PFS may also include provision for producing and selling a manganese sulphate by-product that could potentially generate significant additional revenue streams for the Zandkopsdrift project.

The project comprises mining and processing activities to produce a mixed rare earth product, a seawater desalination plant to be located 35 km from the mine and a REE separation plant to be located at the deep-water port of Saldanha Bay, in the Western Cape province, about 300 km from the deposit.

The Zandkopsdrift B zone had demonstrated the biggest total rare earth oxides grade and the highest grade of high-value heavy REO of significantly advanced rare-earth deposits outside of China.

Zandkopsdrift would have a target total production capacity of 20 000 t/y of separated rare earth oxides, and is expected to become one of the largest producers of high-demand critical rare earth oxides such as dysprosium, terbium, europium, neodymium and yttrium in separated, high-purity form.

Frontier in December struck an accord with Korean government-owned mining and natural resource investment company Korea Resources Corporation, which had acquired a 10% interest in Frontier's Zandkopsdrift project, along with an offtake right and obligation for 10% of the production.

The C$23.8-million deal was believed to make the company the only junior company in the rare earths sector to have signed and completed a definitive agreement with a significant strategic partner with offtake capability.

The company is fully funded through to completing its PFS and a definitive feasibility study.