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Greenland slashes Kvanefjeld capex by 40%

Aspiring rare earth metals producer, Greenland Minerals, has taken a major step forward in developing its giant Kvanefjeld project in southern Greenland with the optimisation study shaving almost 40% off the capital cost to USD$505 million.

The capital cost reduction is partly due to the development of an optimised flotation circuit capable of producing rare earth mineral concentrates with grades of between 22% and 25% rare earth oxide, or “REO”, well above the 14% produced by the concentrator for the 2016 feasibility study.

Greenland Minerals also simplified the concentrate refining process, which now includes a single stage circuit and fewer solid-liquid separation steps.

Additionally, the higher concentrate grade and the simplification of the refinery circuit has resulted in a reduction of the scale of the refinery circuit and the size of its constituent processing equipment.

This work adds to the company’s previous engineering studies that reduced civil construction costs by 44% to USD$175 million.

Optimisation programmes have also increased rare earth production by about 8% to approximately 32,000 tonnes per annum of REO, about 6,000 tonnes of which would consist of the valuable magnet metals, neodymium, praseodymium, terbium and dysprosium.

Kvanefjeld will have an initial mine life of 37 years based on the 108 million tonne ore reserve estimate.

In May, Greenland Minerals reduced operating costs at the project by 40% to below USD$4 per kilogram of rare earth oxide after credits due to the improved metallurgical performance of its ores and other operational enhancements.

Managing Director John Mair said: “With the completion of an outstanding optimisation program, we have a project with a smaller footprint producing more rare earths at lower operating costs, which requires significantly less capital for development.”

“The 40% reduction in the capital cost estimate together with the increased projected output over an initial 37‐year mine life results in the lowest capital intensity amongst our peers.”

“The optimised capital costs, when considered with operating costs after credits of below USD$4/kg of rare earth oxide, creates a highly robust project and compelling development opportunity.”

The significant reduction in capital costs could make Kvanefjeld a more palatable project for potential financiers and is also likely to reduce the original five-year payback period for the operation.

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