London-listed Pensana achieved considerable progress for the six months ended December 31, 2021, as the company looks to establish an independent and sustainable magnet metal rare earth production facility at Saltend, in the UK, to meet demand from the electric vehicle and offshore wind sectors, chairperson Paul Atherley says.

He says both the Saltend project and the Longonjo rare earth mine project, in Angola, have been brought to front-end engineering design (FEED) status, with financing and offtake discussions being well advanced.

The interim period saw the initiation of geotechnical drilling and trenching at both the Saltend and Longonjo sites ahead of main construction activity.

Moreover, Pensana appointed experienced natural resources financier Steven Sharpe as a nonexecutive director of the company.

PROJECT DELIVERY

A comprehensive value engineering and optimisation programme is well advanced and is expected to be reported next month and is expected to result in a further reduction in capital costs.

Working alongside Wood Group’s Perth, Reading and Johannesburg offices, Paradigm Project Management (PPM), a specialist Africa-centric project management and engineering company, and Professional Cost Consultants (PCC), with offices in South Africa and the UK, the estimated capital expenditure has been reduced from $525-million to $494-million (Saltend: $195-million and Longonjo: $299-million).

Worldwide supply chain constraints and inflationary pressures brought about by Covid-19 and the recent Ukraine-Russia conflict, which could have impacted both the Saltend and Longonjo projects, have been largely mitigated by these detailed optimisation and value engineering processes, Pensana says.

Specific workstreams, involving capital and operational cost savings, currently under way include spent acid regeneration to maximise the recycling efficiency of the sulphuric acid plant, integrated with off-gas from the calcining of concentrate at Longonjo.

Moreover, Pensana is piloting a more cost-effective flotation concentrate calcining process offered as a vendor alternative post-FEED, which it says will enable a significantly shorter lead time for fabrication and ease of installation at Longonjo.

There is also the optimisation of Saltend’s civil and earthworks for load-bearing structures undertaken alongside the completion of detailed geotechnical investigation.

Lastly, there is piloting of process simplification opportunities discovered in the precipitation circuit at Longonjo.

POST PERIOD-END

FEED for both Saltend and Longonjo have been completed and value engineering is ongoing.

Pensana received approaches from major European and US electric vehicle and wind turbine original-equipment manufacturers to secure magnet metal supply.

A memorandum of understanding was executed with a key Asian trading house for 50% of Saltend’s production.

Pensana highlights that financing is well advanced, including potential support from the UK government’s UK Export Finance and the Automotive Transformation Fund.

There was also the successful institutional equity placing of £10-million with UK fund manager M&G.

Pensana also highlights increasing engagement with UK and US generalist institutional investors following M&G’s 5% direct investment.