TORONTO (miningweekly.com) – Great Western Minerals could more than double production at its South Africa rare earths project if it strikes a deal to extract the valuable elements from waste that companies including Exxaro Resources and Richards Bay Minerals generate from their titanium operations.

Great Western CEO Jim Engdahl said that his company was in talks with miners that produce monazite as a by-product to reprocess it, which could create an opportunity for both sides.

Monazite hosts both rare earths and radioactive thorium, and Great Western earlier this month won a licence to store radioactive materials at its Steenkampskraal mine in the Western Cape.

“The problem that the other mines have is that they do not have a licence to store and process thorium,” Engdahl told Mining Weekly Online.

“We have an opportunity to deal with a problem that other mines have, and turn that into an opportunity for them as well as us.”

Speaking in a phone interview, he said that TSX-listed Great Western was talking to “several” companies in this regard, declining to name them.

Exxaro Resources and Richards Bay Minerals, a joint venture that mining giants Rio Tinto and BHP Billiton own, are the biggest companies that produce monazite as a by-product from their titanium operations in South Africa.

Exxaro sands and base metals GM Trevor Arran said the company was looking strategically at its monazite production, but hadn't reached a decision on what to do with it yet.

"There have been a number of approaches (similar to that from Great Western) from other interested parties to acquire our monazite," he told Mining Weekly Online.

Approached for comment, Rio Tinto Africa spokesperson Jean Chawapiwa said: "We don't comment on market rumour and speculation.”

The by-product could be significant to Great Western.

“It could add many, many years to the life of the project, and increase production by at least two times,” Engdahl said.

Great Western aims to start producing at Steenkampskraal in the first quarter of 2013, and in April unveiled plans to double output to 5 000 t/y.

SEPARATION PLANT

By July, the company hopes to conclude negotiations with a technology partner to build a rare-earth separation plant at Steenkampskraal, said Engdahl.

Great Western was talking to three potential candidates, two of which were Chinese companies, he added, declining to provide further details.

The plant is expected to cost around C$30-million, similar to what the mine’s refurbishment bill may be.

Prices for rare earth elements have rocketed over the past few months as China, which accounts for about 97% of the world’s supply, has imposed export and production restrictions in a bid to improve the industry’s environmental track record.

This is while demand from applications including hybrid vehicles, flat screen televisions and wind turbines keeps rising.

CONSOLIDATION

Attracted by the high-price environment, a slew of new companies have brought projects to the market over the past two years, hoping to cash in on the supply imbalance.

Engdahl said that some of these “one-project” companies that have no access to rare earth processing facilities but own attractive deposits might get bought out by bigger firms that do, as well as end users of rare earths.

“There will be [consolidation], but the other thing that will happen is a lot of these juniors that think they will be in production when they’re targeting will have some major surprises as they try and reach those target dates.”