Explorer and developer of rare earths Tantalus Rare Earths (TRE) has entered into an agreement to sell 300 t/y of mixed rare-earth oxides to China-based rare earths company Shenghe Resources.
The ore will be provided by TRE’s project in northern Madagascar and will comprise about 30% of the company’s yearly output.
The initial duration of the contract is three years from the start of commercial production at the project, aimed for 2016, once an exploitation licence has been obtained.
“Securing Shenghe as the first high-profile customer for the TRE product is a major breakthrough for the company. “In the rare earths value chain, separation is one of the most important stages of production, and to secure an existing global leader in separation as partner and customer is a strong signal for the rare earths industry of the viability of our TRE project, in Madagascar,” says TRE CEO Thomas Hoyer.
Further, he adds that it demonstrates that there is strong demand in the market for the company’s planned product.
Meanwhile, Shenghe also has an option to extend the contract by an additional seven years by providing TRE with debt funding amounting to 30% of the planned total investment required to reach commercial production of rare earths at the project.
Shenghe must exercise its option before TRE receives its exploitation licence and provide funding before any investments into commercial production are made.
The mixed rare-earth oxides produced by TRE in Madagascar will be shipped to Shenghe’s plants in China for further processing, from where the material will be delivered to Shenghe’s Chinese and international customers.
The pricing of the mixed rare-earth oxides is linked to the content of various rare-earth oxides present in the TRE product as well as to independently quoted market prices of such oxides.
Rare-earth elements identified in the TRE ionic clay deposit include praseodymium, neodymium, terbium and dysprosium, all in high demand for fast-growing magnet applications.