Name of the Project
Kvanefjeld rare earths project.

Location
Kvanefjeld, in southern Greenland.

Project Owner/s
ASX-listed Greenland Minerals. Shenghe Resources has acquired a 12.5% interest in the company.

Project Description
The Kvanefjeld project is underpinned by the world’s biggest code-compliant rare earths resource.

The outcomes of a feasibility study in 2016 demonstrated the potential of the project to be developed as a large-scale, low-cost producer of rare earths. The feasibility study envisaged the production of 30 000 t/y rare-earth oxide (REO) at a processing rate of three-million tonnes a year.

An optimised feasibility study was completed in May 2019, showing recovery improvements across the light and heavy rare-earth elements.

The increased recoveries will result in the production of 32 000 t/y REO at three-million tonnes a year, adopted in the 2016 feasibility study.

The improved rare earth recoveries have increased the projected output of commercially important rare earths to 4 260 t/y for neodymium oxide, 1 420 t/y for praseodymium oxide and 270 t/y for dysprosium oxide.

Average by-product output includes 451 t/y of uranium oxide, 6 060 t/y of zinc concentrate and 12 417 t/y of fluorspar. The increase in rare-earth recoveries is primarily owing to the design of a single-leach stage, which results in fewer solid/liquid separation stages. Each separation stage results in minor rare earth losses. Kvanefjeld is well positioned to be a significant contributor to global rare earth supply for an initial 37-year period, based on a 108-million-tonne ore reserve.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The 2016 feasibility study estimated the project’s net present value at $1.59-billion, at a 10% discount rate. The internal rate of return is 43.4%, with a payback of five years.

Capital Expenditure
The projected capital cost for the Kvanefjeld rare earths project has been reduced by an estimated 40%, from $832-million to $505-million. This reduction resulted from optimisation studies covering all elements of the project, from the flowsheet to civil construction.

Planned Start/End Date
Not stated.

Latest Developments
Greenland Minerals has requested arbitration in its dispute with the governments of Greenland and the Kingdom of Denmark over the future of its Kvanefjeld rare earths project.

The Greenland government banned uranium mining in November 2021, impacting on the development of the project.

Greenland Minerals had previously noted that while the uranium was not of great economic significance to the Kvanefjeld project, the revenues generated by the uranium and other by-products would serve to reduce the rare earth production costs.

The primary objective of the arbitration is to protect its investments in the project and obtain the exploitation licence required for the project to proceed. As a result, the company’s subsidiary, Greenland Minerals A/S (GMAS) is maintaining its application for an exploitation licence and, in the arbitration, GMAS is seeking an independent legal ruling on whether the uranium ban applies to GMAS's exploration licence.

GMAS believes that the uranium ban will not apply to the Kvanefjeld project, as legislation attached to the ban states that it will not apply to existing licences, and the explanatory note to Act No 20 emphasises that it does not apply if its application will result in an expropriation.

The government of Greenland maintains that the Act applies to Greenland Minerals, and its exploitation licence will not be granted. In these discussions, government has also made it clear that it does not consider to be under any obligation to compensate the company.

“Greenland Minerals has spent more than ten years and has invested over A$130-million in the Kvanefjeld project. The company followed every government regulation and request throughout the process. The project has been through a rigorous environmental assessment and it remains one of the largest undeveloped rare earth assets in the world, and a key future source of the technology metals that will be required for the clean energy transition,” MD Daniel Mamadou has said.

“We are starting the arbitration process to get confirmation on whether Act No 20 actually does apply to us and blocks our exploitation licence application. Should this be the case, we claim damages in compensation for expropriation. As the board of Greenland Minerals, our duty is to protect our shareholders’ interests: the position taken by the government of Greenland leaves us with no other alternative than to enforce the company’s right to an exploitation licence.”

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
GMEL, tel +61 8 9382 or fax +61 8 9382 2788.