Aspiring rare earth metals producer Greenland Minerals has outlined some major wins at its massive Kvanefjeld project in southern Greenland this week, including an impressive 8% increase in rare earth recoveries to 94%, compared to the 2016 Feasibility Study, or “FS”, metrics.
The metallurgical test work was undertaken by leading rare earth company and major Greenland shareholder, Shenghe Resources.
Early last year, the company revealed the development of an enhanced leaching method to simplify the refinery circuit for the complex project, that has since led to a substantial reduction in CAPEX and OPEX cost estimates for Kvanefjeld.
The increased metallurgical recoveries are critical to the project’s ultimate development and management said there were improvements across the light and lucrative heavy rare element suite of elements, including the key battery metals dysprosium and neodymium.
The increased recoveries will allow for the production of 32,000 tonnes per annum of rare earth oxide, or “REO”, materials from the project, at the forecast FS processing rate of 3 million tonnes per annum.
According to Greenland, these new results now place Kvanefjeld as the lowest-cost, undeveloped ASX-listed rare earth project.
The project is underpinned by the world’s largest code-compliant mineral resource of 1.01 billion tonnes containing 11.14 million tonnes of REO, which incorporates an ore reserve of 108 million tonnes for 1.54 million tonnes of total REO, enough to sustain the operation for 37 years.
Importantly, the new work will lead to an increase of USD$31m per annum in revenue from the project, based on the current basket prices estimated to be USD$13.23 per kilogram of REO.
Using Greenland’s forecast for rare earth element prices, the basket price increases to USD$19.55 per kilogram of REO, driven by the increased demand outlook for magnet metals due to the transition to electric vehicles and the expansion of green-energy initiatives like wind power, whose massive turbines require these commodities.
The improved metallurgical recoveries flow through to OPEX cost reductions, which Greenland has now estimated to be USD$8.50 per kilogram of REO inclusive of by-product credits, which represents an attractive margin for the project at current and particularly forecast prices.
Overall the company outlined that with the improved metallurgical performance of its ores and other operational enhancements it has achieved over the last three years, OPEX costs are now 40% down on those estimated in the original FS for Kvanefjeld.
Greenland Managing Director Dr John Mair said: “Recoveries and operating costs have now been finalised for the optimised Kvanefjeld Feasibility Study, and the results are exceptional. The low operating costs reflect the large output and simple, highly-efficient processing that are key project advantages.”
“Substantial improvements to flotation performance result in a higher-grade, lower volume mineral concentrate, reducing the scale of the refinery circuit. This is complemented by further simplifications to the circuit, reduced reagent consumption, and improved rare earth recoveries.”
“The improvements are the result of customised metallurgical program led by our major shareholder Shenghe Resources and have the project on track to be a high output, low cost producer of rare earths, over an initial 37-year mine life. We anticipate updates on the optimised capital costs in the coming weeks.”
“The case continues to strengthen for Kvanefjeld to be developed as a major supplier of magnet metals – critical to the electrification of transport systems, wind energy, and green technologies.”
In March, the company also said it had completed engineering studies that reduce civil construction costs by 44% to USD$175m at the project.
This represents a substantial cost reduction for Kvanefjeld, which had been estimated to have total CAPEX costs of about USD$832m in the company’s original FS.
In parallel with the ongoing technical studies, Greenland is also advancing its environmental and social impact assessment for the project with the relevant Government and local authorities in Greenland.
The company continues to build a compelling case for the development of Kvanefjeld, which is likely to be a game changer for the company and its potential customers in North America and Europe, who will become less reliant on China for the strategic materials the project possesses.
With the US-China trade war now in full swing, a number of stars may be aligning for Greenland to become a significant contributor to the world’s growing demand for rare earth products.
By Matt Birney
