TORONTO (miningweekly.com) – Vancouver-based Tasman Metals on Wednesday published the results of a scoping study at its Norra Karr rare earths project in southern Sweden, sketching out a mine that would cost $290-million to build, and have a $1.46-billion net present value.
The project would pay for itself after 2.6-years, not including taxes, the TSX-V-listed company said.
“The preliminary economic assessment (PEA) clearly demonstrates the strong economics of this highly strategic project, with the majority of the projected cash flow sourced from the production of the critical heavy rare-earth elements, dysprosium, terbium and yttrium,” Tasman CEO Mark Saxon said in a statement.
The company is one of the many juniors in the rare earths space hoping to help wean the world off its heavy dependence on China for the group of 17 elements used in a wide range of technologies, from lighter flints to guided missiles and smart phones. The country accounted for over 95% of global supplies in 2011.
One of the key determinants of which juniors will be left standing after the first significant batch of non-Chinese supplies enters the market next year, will be which can produce a more valuable product.
This can be judged in two ways: the value of the individual rare earths each company will produce – some are skewed toward light rare earths such as cerium and lanthanum, of which analysts predict a glut over the next three years.
The other criterion is how far down the processing chain the miners can go. The importance of this factor became clear after Molycorp, the leading contender to become the first non-Chinese rare earths producer later this year, announced it would buy processing company Neo Material Technologies for $1.3-billion earlier this month.
Tasman’s PEA scores on the metals mix side – the Norra Karr deposit has a large portion of the more valuable heavy rare earths.
However, the study only anticipates the production of a mixed rare-earth concentrate, at around 6 800 t yearly. The individual metals are difficult and expensive to produce, but fetch a higher price.
The company conceded such, saying the PEA applied a 38% discount to the final separated oxide selling prices.
It is by no means a given that Tasman will stop at the mixed concentrate stage.
“For separation, Tasman is exploring multiple options, which include outsourcing, partnerships, and new technologies,” the company said.
Australia's Lynas Corp is also set to start producing rare earths later this year.