Significant drop in CAPEX for Greenland at Kvanefjeld
ASX listed rare earth element developer Greenland Minerals has flagged a substantial reduction in the capital costs for civil earth works at its huge Kvanefjeld rare earth element project located on the southern tip of Greenland.
US-based Tetra Tech has refined and optimised the process plant and site infrastructure ground footprint at the proposed mine, significantly reducing the volume of material disturbance by 80% from the 2016 feasibility study estimate.
The heavily revised civil work design closely matches the natural topographical land contours at the proposed project site, which has also led to a decrease in fill volumes by over 60% and will also notably reduce overall CAPEX costs.
Tetra Tech was part of a specialised engineering team that conducted site visits to the Kvanefjeld project in September, as part of a broader optimisation study program.
According to Greenland, Tetra Tech’s updated design has been passed to the Nuna Logistics group out of Canada for detailed costings and those results are expected by late November.
Greenland Minerals Managing Director John Mair said: “With an overall goal of reducing capital costs, addressing the civil engineering strategy and civil earth works is an important part of the Kvanefjeld optimisation program.”
“The multi‐disciplinary team of engineering groups that spent time on‐site in September are establishing the optimal ways of maximising the advantages of the project setting to minimise civil works and associated capital costs.”
“Work by Tetra Tech is complete with major reductions to the amount of civil earth works required for site preparation. The Tetra Tech study is now with Nuna Logistics who are preparing the civil cost estimation, with outcomes expected in six weeks.”
In April 2016, Greenland reported that CAPEX costs for the Kvanefjeld project amounted to USD$832m, so a material decrease in civil construction costs is likely to have a noticeable effect on the payback period for the operation.
The high margin project has an initial mine life of 37 years and is expected to spit out USD$376m per annum once fully operational and will be an important global supplier of key heavy rare earth magnet metals like dysprosium.
The company has also made large strides in the metallurgical processing optimisation studies for its Kvanefjeld ore stream over the last 2 years or so, underwritten by guidance from major shareholder and global rare earth element expert Shenghe Resources, based in China.
This work is aimed at lowering the operating costs of processing from the multi-commodity ore stream that will be produced from the mine, including rare earths, uranium and zinc.
Additionally, Greenland has utilised the expertise of US-based PND Engineers, who are specialists in cold climate port design facilities and tasked with designing the off-shore port infrastructure for Kvanefjeld.
China Communications Construction Co Ltd were also present during the technical September meetings and have a wealth of experience in the development of on-shore port facilities.
Things are now moving quickly for Greenland, who submitted their Environment Impact Assessment and Social Impact Assessment documents for the Kvanefjeld project to the appropriate authorities earlier this year.
The company is now awaiting the approval of the exploitation – or mining license application for the project that currently resides with the relevant Greenland Government regulatory bodies.
Greenland Minerals (GGG)
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