Namibia Critical Metals advancing Lofdal rare earths project

Namibia Critical Metals Inc. [NMI-TSXV] has provided an update on progress at the Lofdal heavy rare earth project in northern Namibia, which is a joint venture with Japan Oil, Gas and Metals National Corp. (JOGMEC). The Lofdal joint venture is operating under a term 1 budget of $3-million, with the objectives of doubling the current resource size at Area 4 with a 7,700-metre drill program, testing two high-priority exploration targets with 1,500 metres of drilling, and carrying out further metallurgical testwork to optimize the processing flowsheet. Progress since stating the drill program in early March, 2020, is summarized as follows:

  • Drilling ahead of schedule with over 50% completed at Area 4, with results from the first nine holes now reported;
  • Drill results consistent with expected grades and thickness, as predicted from the resource model, targeting to double current resource size in this first drilling phase;
  • Drill rig will now move to exploration targets at Northern Splay and Dolomite Hill;
  • Metallurgical bulk test runs (2.7 tonnes) completed on X-ray transmission sorter, with analytical results pending. X-ray transmission sorter tests are under way, and the company is expecting to complete bulk test runs (4.4 tonnes) by mid-July.

Drill highlights of heavy-rare-earth-enriched zones include:

  • 22 metres at 0.29% total rare earth oxides (TREO) with 67.7% heavy rare earth enrichment (including three metres at 0.87% TREO with 89% heavy rare earth enrichment);
  • 15 metres at 0.32% TREO with 62.5% heavy rare earth enrichment (including three metres at 0.51% TREO with 79.3% heavy rare earth enrichment);
  • Six metres at 0.33% TREO with 89% heavy rare earth enrichment (including 2 metres at 0.52% TREO with 93.1% heavy rare earth enrichment).

 

Don Burton, President of Namibia Critical Metals, stated: “All holes drilled to date have intersected the main zone, as expected. As we await lab results from the remaining 13 holes from this phase of the Area 4 drilling, it is an opportune time to move the drill to our exploration targets, where we believe the potential exists to develop satellite deposits. The drill will then return to Area 4 to complete the resource drilling program. The metallurgical program is advancing well, with both XRF and XRT sorting tests providing very encouraging results. The objective with sorting is to achieve a two-to-three-times upgrade to the deposit grade, and we look forward to a comprehensive evaluation of both technologies upon completion of the bulk test runs, which will use about seven tonnes of representative sample collected from trenches at Area 4.

“These are challenging times for field operations, and we are extremely fortunate to have a dedicated team in Namibia that has actually exceeded the planned monthly production since start-up in March. Field operations continue with strict COVID-19 protocols in place.”

The Lofdal heavy rare earth project is located 450 km northwest of the capital city of Windhoek in the Kunene region of northwestern Namibia. The project area covers 314 km2 centred on the Lofdal carbonatite complex, which hosts a number of rare earth occurrences, including the Area 4 deposit. Mineralization at Area 4 is dominated by xenotime, which is highly enriched in heavy rare earth. Value drivers at Lofdal are dysprosium and terbium.

The current mineral resource at Area 4 has been drilled to depths of between 125 to 225 vertical metres and is estimated to be 2.88 million tonnes Indicated grading 0.32% TREO, yielding 9,230 tonnes of REO, of which 7,050 tonnes are estimated to be heavy rare earth oxides (HREO), and 3.28 million tonnes Inferred grading 0.27% TREO yielding 8,970 tonnes of REO, of which 6,700 tonnes are estimated to be HREO.

Drilling will now move from Area 4 to test exploration targets at the Northern Splay and Dolomite Hill targets. Northern Splay is located 10 km northeast of Area 4 on an extension of the Area 4 structure, and Dolomite Hill is situated 2.5 km north of Area 4 in a separate mineralized structure.

The primary objective of the Lofdal joint venture is to double the current resource size with an additional 7,700 metres of drilling. The company has completed 4,447 metres of drilling to date in 21 holes at Area 4. Drilling operations have continued uninterrupted since beginning in early March, 2020, and remain on schedule; however, slight delays in receiving laboratory results have been realized due to COVID-19 restrictions in Namibia and Canada. These restrictions have since eased, and a steady flow of analytical results is now expected to resume.

Results from the first nine holes have been received, and all holes have intersected mineralization in the main zone consistent with expected grades and thicknesses, as predicted from the resource model.

Namibia Critical Metals is operator for the Lofdal joint venture.

Rio Tinto producing rare metal scandium in Quebec

Rio Tinto [RIO:ASX] is currently working on the production of the rare metal scandium at its titanium dioxide operation in Quebec, Canada, and also trialling a scandium aluminum master alloy working with its aluminium business.

Scandium is on the US government’s critical minerals list, with various commercial uses including aerospace, energy as well as consumer products.

Rio Tinto researchers at Rio Tinto Fer et Titane Inc. (RTFT) have developed a new process to extract high purity scandium oxide from by-products generated in the production of titanium dioxide at the RTFT metallurgical operation in Sorel-Tracy, Quebec. The operation is now producing high quality scandium oxide that meets market specifications as part of an ongoing pilot project, as well as trialling the production of a scandium aluminium master alloy.

This breakthrough has the potential to enhance the scandium oxide market by delivering a secure supply source from this established operation, creating value from what was previously waste.

Scandium is a silvery-white, rare earth metallic element. The United States, Canada, Australia and the European Union have all listed it as a critical mineral.

Scandium oxide is used to improve the performance of solid oxide fuel cells, which are used as a power source for buildings, as well as in niche products such as lasers and lighting for stadiums or studios.

Scandium is also used to produce high-performance aluminum alloys. Small additions of scandium in aluminum alloys substantially increase strength, heat and corrosion resistance, and welding properties.

Since the 1980s, scandium-aluminium alloys have been used for structural purposes to provide weight, maneuverability and range advantages to military aircraft. Today, aluminium-scandium-magnesium alloy powder is even used in 3D printing.

Numerous applications have also been developed for sports equipment such as baseball bats, lacrosse sticks and bicycle frames. Kona Bikes estimates that scandium enables them to “shave weight from their aluminum frames by 10% to 15%.”

The Scandium Market

Security of supply issues and a high cost of production have limited the growth of demand for scandium for many years, with the current market estimated to represent 12-14 tonnes per annum, according to the Scandium Aluminium Europe (SCALE) Project.

Scandium is present in most rare-earth deposits and in bauxite residues, commonly known as red mud.

However, to date it has been extracted from ores in only a few mines worldwide, mostly concentrated in Asia (China, Japan, Kazakhstan, the Philippines) and Russia.

In January 2020, Canada and the United States finalized a Joint Action Plan on Critical Minerals Collaboration in order to secure supply chains for critical minerals – such as scandium – that are “needed for important manufacturing sectors, including communication technology, aerospace and defence, and clean technology.”

The RTFT metallurgical operation in Sorel-Tracy processes ilmenite ore to produce titanium dioxide feedstocks. Researchers in the RTFT Research & Development Centre have developed a new process to extract high purity scandium oxide from by-products generated in the production of titanium dioxide feedstocks.

Since the second half of 2019, a lab has been producing high quality scandium oxide that meets market specifications and the process is now being used at a larger scale in a pilot plant.

Rio Tinto is also trialling the production of small quantities of high-performance aluminium-scandium master alloy using the scandium oxide produced by RTFT with its world class aluminium business, also based in Quebec.

This disruptive process presents low production costs and requires minimal capital investment:

  • No direct mining costs
  • Recovery of scandium oxide directly from by-products from the existing metallurgical plant
  • Operating independently from existing assets with no impact on the main process flow

Rio Tinto is seeing strong interest in the market and is now assessing the potential to progress to industrial scale scandium oxide production. The potential timing, scale and investment in industrial production are being considered.

Jean-Sebastien Jacques, Rio Tinto CEO, commented, “This breakthrough on scandium is a great example of how we are looking at our operations across the world with fresh eyes to see how we can extract value from by-product streams. Finding a way to extract a new product not only delivers more value from our orebodies, it helps to reduce waste. It’s a key part of operating in a more responsible way and providing the essential materials our world needs for a sustainable future.

“Scandium, produced at economic scale, is a critical mineral that has the potential to provide unique solutions to materials science challenges and drive progress in manufacturing. This exciting breakthrough in processing technology leverages our existing mining operation to provide what can be a scalable, high-quality and low-cost source of scandium oxide to markets and manufacturers.”

Rio Tinto Fer et Titane operates an open cast ilmenite mine at Lac Tio near Havre-Saint-Pierre, on Quebec’s North Shore. The ore is then sent by boat to its metallurgical complex in Sorel-Tracy, Quebec, where high-quality titanium dioxide feedstock, pig iron, steel and metal powders are extracted. Together, the sites employ over 1,600 people.

Rio Tinto says it can extract strategic mineral from metal plant processing waste

Rio Tinto said on Wednesday it has developed a process to extract the rare earth scandium from its titanium dioxide production process and is studying ways to commercially produce the mineral. The move is the latest example of Rio taking a second look at the waste from its core mining business in an effort to reprocess it and produce so-called strategic minerals and rare earths, a grouping of 17 minerals used to make electronics. China is the world's largest producer and consumer of many of these minerals, including rare earths. That has prompted efforts by politicians and companies in Canada, the United States and elsewhere to try and produce their own supplies.

Defense Metals expands Rare Earths resources at Wicheeda

Defense Metals Corp. [DEFN-TSXV; DFMTF-OTCQB; 35D-FSE] has completed an updated mineral resource estimate (MRE) with respect to its 1,708-hectare (4,220-acre), 100%-optioned  Wicheeda rare earth element (REE) project, located approximately 80 km northeast of Prince George, central British Columbia.

The Wicheeda REE Property is accessible by all-weather gravel roads and is nearby to infrastructure, including power transmission lines, the CN railway and major highways.

Highlights:

• A 49% increase in overall tonnage of Updated Wicheeda REE Project MRE based on the results of 2019 diamond drilling of 13 holes totaling 2,005 metres;
• A 30% increase in overall average grade, in part though the incorporation of potentially economically significant praseodymium not previously estimated;
• Conversion of 4,890,000 tonnes to Indicated Resources1 previously defined as Inferred;
• Increased Inferred Resources by 730,000 tonnes in comparison to Defense Metals Initial Wicheeda MRE1; and
• Potential for expansion of the Wicheeda Deposit to the north and west in the down plunge direction.

The updated Wicheeda MRE comprises an Indicated Mineral Resource of 4,890,000 tonnes averaging 3.02% LREO (Light Rare Earth Elements), in addition to Inferred Mineral Resource of 12,100,000 tonnes averaging 2.52% LREE reported at a cut-off grade of 1.5% LREE (sum of cerium (Ce), lanthanum (La), neodymium (Nd), praseodymium (Pr), and samarium (Sm); in addition to niobium (Nb) percentages). The lower cut-off grade was established based on consideration of metal price and concentrate payable, metallurgical recovery, and operating cost assumptions and uncertainty. The resource, constrained by applying a conceptual Lerchs-Grossman (LG) pit shell, is provided in Table 1 below, which includes a review of the MRE at a range of cut-off grades.
Craig Taylor, President and CEO of Defense Metals, said: “With the release of our updated Mineral Resource Estimate Defence Metals has delivered on another significant milestone in advancing what management believes is one of the most compelling undeveloped rare earth element assets in North America. Our successful 2019 drill campaign has resulted in a significant expansion and increased level of confidence in the mineral resources of the Wicheeda REE Deposit, which remains open to the north and west.”

Resources are constrained by resource pit shell generated using the following inputs:

• Mining cost of C$3.50/tonne;
• Waste mining costs of C$3.25/tonne;
• Process Costs of C$40/tonne (includes $10/tonne for transporting from pit to mill);
• G&A Costs of C$7/tonne
• Process Recoveries: Ce = 85.7%; La = 85.7%; Nd = 85.7%; Pr = 85.7%; Nb = 57.0%; Sm = 85.7%
• Overall pit slope angles of 45ᵒ.

Canadians want to seize opportunity in Critical Minerals

Critical Minerals Essential to Healthcare, Defence and Clean Technology

The Mining Association of Canada (MAC) released a new national poll, which highlights public enthusiasm for Canada to grow market share as a preferred global supplier of critical minerals, based on abundance and leading environmental standards.

As demand for minerals and metals continues to grow, there is increasing focus on what are referred to as “critical minerals” – vital in the aerospace, defence, telecommunications, computing, and an array of clean technologies such as solar panels and electric car batteries. China has been a major supplier of these minerals but Canada has an opportunity to play a larger role in this marketplace, as customers look for products made to high environmental standards, such as Canada’s Towards Sustainable Mining program, developed by MAC.

“Canadians support growing our market share as a preferred global supplier of critical minerals, products and technologies that are essential to building a net-zero economy,” said the Honourable Seamus O’Regan, Canada’s Minister of Natural Resources. “As we work to emerge from the challenges and uncertainty brought on by COVID-19, Canada’s critical mineral resources will lead us to a more competitive and prosperous industry.”

Almost 90% of those surveyed for MAC by Abacus Data like the idea of Canada being a preferred source for critical minerals and would like to see government take a number of steps to support this approach.

  • 88% want to see Canada increase its role in producing critical minerals for world markets.
  • 86% want to encourage international investment into Canadian critical minerals and metals companies that are sustainability leaders.
  • 83% want to encourage Canadian production of critical minerals so Canada can compete with China.
  • 81% want to promote interest in Canadian critical minerals by drawing attention to Canada’s high standards of sustainability.

“Canada is a top five country in global production of 15 minerals and metals, including several critical minerals essential to new technologies such as cobalt, copper, precious metals, nickel, uranium. We have the potential to expand in lithium, magnesium and rare earths,” said Pierre Gratton, President and CEO of MAC. “More than a decade of Canadian leadership in responsible mining practices is giving us an additional edge, and we see more investors and customers examining how their suppliers approach environmental responsibility. The market is growing and Canada’s opportunity is clear.”

Recently, Canada and the US finalized a Joint Action Plan on Critical Minerals Collaboration which, among other things, will attract greater investment in Canadian mining projects and advance the mutual interest in securing supply chains for the critical minerals needed for important manufacturing sectors. This Action Plan, along with the government’s enhanced focus on the mining industry through the

Canadian Minerals and Metals Plan, show that there is understanding on the role Canada can play in responsibly sourcing the materials needed for the items used daily by people across the country and globally.

“Canadians may not all have a detailed knowledge about the mining sector, but they can clearly spot the chance to leverage our advantages in terms of abundant resources and the high standards of responsibility that our industry is known for. They know that winning a bigger share of this growing market means more well paying jobs and stronger communities,” concluded Gratton.

To access MAC’s polling data pertaining to critical minerals, please visit https://mining.ca/documents/abacus-polling-data-focused-on-critical-minerals/.

Dazzler resource increases by 50%

ASX-listed Northern Minerals has reported a 50% increase in the mineral resource estimate for the Dazzler rare earths deposit, at its Browns Range project, in Western Australia. The deposit is now estimated to host 214 000 t of ore, grading 2.33% total rare earth oxide for five-million kilograms of total rare earth oxide, using a cut of grade of 0.15%.

U.S. Rare Earth Policy, Too Little and 35 Years Too Late

By James Kennedy, ThREEConsulting.com

The Department of Energy and Department of Defense have taken their first steps toward establishing a domestic rare earth value chain.  Last year the U.S. Army announced a program to fund the development of rare earth value chain processing and technologies.  Early this year the Department of Energy announced a similar program that focuses on extracting rare earths from coal waste.

Award announcements were expected sometime late last month. Funding is anticipated to be tied to green field mining projects, reconstituted mining projects like MP Minerals or extracting little bits of rare earth from coal ash.

Unfortunately, most of the applications are directly tied to the same speculative mining ventures that have failed in the past or projects that could never convince investors to move their projects forward.

While the U.S. continues to place its salvation in speculative mining projects or challenging and costly chemical extraction processes, China’s monopoly has morphed into something much more robust and omnipresent.

China’s monopoly strategy over the last few decades can be broken down as follows:

  1. Mining: Basic Resource Production Monopoly
  2. Control Entire Value Chain: Integration / Domination Over Refining, Metals, Alloys & Magnets
  3. Manufacturing & IP Capture: Leverage, Control & Relocation of All REE End-User Tech
  4. Resource Exploitation: Supplication & Resource Redirection

The USGS graphic below tells much of the story

Note: All U.S. Rare Earth Mining Ended in 2002

Mining: Basic Resource Production Monopoly

As illustrated in the graph above, China fully exploited its global monopoly over rare earth resources by 2000, or 20 years ago.

Control Entire Value Chain: Integration / Domination Over Refining, Metals, Alloys & Magnets

China moved beyond resource production as it expanded its monopoly over the value chain.  China systematically gained global monopoly control over the production of oxides, metals, alloys, magnets and all other high value materials.

This process actually began as far back as 1985, or 35 years ago, when China made its ambitions clear when it announced the establishment of the Baotou Research Institute of Rare Earths.  The institute, at inception, was the largest rare earth research organization in the world.  China’s public commitment to rare earth research and development dwarfs the U.S. and the rest of the world combined.  Today China has the equivalent of five National Laboratories dedicated exclusively to rare earth research[i].  The U.S. failed to take notice.  The rest is history.

Manufacturing & IP Capture: Leverage, Control & Relocation of All REE End-User Tech

China began leveraging its control over access to these finished rare earth metals, alloys and magnets over 15 years ago.  It began with technology companies like Apple, who’s products could not be built without these materials.

Apple moved much of its manufacturing to China as early as 2004.  When Apple introduced its iPhone in January of 2007 it must have been surprised to learn that a company named Huawei had successfully knocked-off its new phone before the end of summer of that same year.  By 2016 the top 2 Chinese iPhone knockoff makers, Huawei and Oppo, outsell Apple worldwide. By 2017 Huawei alone outsells Apple worldwide. By 2018 Chinese iPhone knockoff companies begin suing Apple for technology infringement

Because China controls access to rare earths Apple and so many other companies had no alternative but to move their manufacturing to China. This is a common story for all rare earth dependent technologies.  The outcome is always the same, Chinese assimilation of foreign technology and a rapid expansion of Chinese knock-offs into global markets – eventually displacing the original technology leader.

Resource Exploitation: Supplication & Resource Redirection

China has learned that mining is a dirty, low margin and thankless business. China’s current monopolistic strategy is to retain control over all aspects of value adding and ‘outsource’ resource production to other countries, including the U.S.

Today China’s rare earth monopoly is centered on access to rare earth metals, alloys and magnets.  This is accomplished through generous subsidies to cover the production cost of all new rare earth metals, the precursor to alloys and magnets.  The resulting price distortions are so significant that Japan informed the U.S. government that it was suspending all new rare earth metal production in 2019.  No non-Chinese company in the world can match their prices for new rare earth metal.

Off queue, out of step and 20 years too late, U.S. policy still remains narrowly focused on ramping up resource production. Of course, this will play into China’s larger plan.   China will be in a position to manage price wars between these new U.S. rare earth mines, its domestic production and new low-cost producers in the region[ii]

Establishing new stand-alone rare earth mines in the U.S. will only make things worse.  China has demonstrated that it can easily manipulate its internal production upward, thus driving prices down.  Its best tool for this is its notorious ‘black market’ producers; an army of artisanal rare earth producers that can match or exceed China’s official production numbers[iii].

New U.S. rare earth mines would also need to compete against the many new Asian rare earth producers desperately queuing up to do business with China.  It is unlikely that any of the proposed U.S. mining projects would be competitive against China or the new Asian producers.

Worse yet, all of these new producers would find themselves fiercely battling amongst themselves over market share.  The end result will be a string of bankruptcies and the gift of low-cost resources being exported to China.  This is exactly what happened when Molycorp and Lynas both ramped up their production leading up to Molycorp’s bankruptcy in 2015.

None of these companies will be able to directly compete against China’s subsidies in the production of new rare earth metals, so for all practical purposes China’s monopoly over metals, alloys and magnets will remain intact and no domestic value chain will emerge.

Finding a sustainable solution:

To establish an uninterruptable value chain, you first need to establish an uninterruptable supply of resources.  As challenging as that may sound, the solution is right in front of you.

A glance back at the graphic above under the data series labeled “Other” is something referred to as the “Monazite-placer era”.  What is largely unknown is that these resources made up as much as half of all global rare earth production – and 100 percent of heavy rare earth production before the “Chinese era”.  More importantly, these REE resources were not directly mined.  They were the byproduct of some other commodity.  They were a freebie.

Unfortunately, the production of REEs from these sources ended due to a 1980 NRC / IAEA regulation that pushed rare earth production into China (not an IAEA member).  The regulations resulted in these resources being classified as “source material”, or nuclear fuel.  Why?  Because these resources commonly carried the companion element thorium and sometimes uranium.

Today these REE resources continue to be mined but are then discharged as waste to avoid the regulatory costs and liabilities associated with “source material”.  Most of these potential producers consider this material to be a liability.  If the “source material” issue can be resolved in favor of the potential producers the resources can be had at a significant discount to Chinese pricing.  If these savings were passed along to the end-users through a cooperative business model the U.S. could compensate for China’s subsidies in metal production.

Today the U.S. alone disposes of enough economically recoverable REEs as the byproduct of some other commodity to exceed U.S., EU, Japanese, Korean, Canadian, South American and Russian demand.

The only obstacle to utilizing these resources is establishing a mechanism to manage the thorium and uranium and developing an integrated value chain that can supply finished rare earth metals, alloys and magnets at prices equal to or even cheaper than China.  The proposed solution has been around for over a decade and can be found in its current form in Senate and House rare earth bills S. 2093 and H.R. 4410.  The proposal is also under consideration with the current Administration.

[i] The U.S. has a single National Lab, Ames, ‘focused’ on rare earths along with several other unrelated priorities.

[ii] Remember, China is the market and sets price.

China does not need outside producers.  China’s official REE capacity is approximately 200 percent of global demand.

By allowing other countries to become its resource supplier, China can preserve its resources and begin the process of cleaning up the ugly environmental legacy of its recent past.

[iii] According to a China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters report Chinas official production quota for 2016 was 105,000 tons per year but total rare earth production exceeded 250,000 tons per year, putting so-called black-market production at over 150,000 tons per year or at least 150% above official production.

________________________________

[1] The U.S. has a single National Lab, Ames, ‘focused’ on rare earths along with several other unrelated priorities.

[1] Remember, China is the market and sets price.

China does not need outside producers.  China’s official REE capacity is approximately 200 percent of global demand.

By allowing other countries to become its resource supplier, China can preserve its resources and begin the process of cleaning up the ugly environmental legacy of its recent past.

[1] According to a China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters report Chinas official production quota for 2016 was 105,000 tons per year but total rare earth production exceeded 250,000 tons per year, putting so-called black-market production at over 150,000 tons per year or at least 150% above official production.

Lynas gets three-year license extension

Rare earths miner Lynas has received a new three-year operating licence for its Malaysian operation, giving the company leave to operate until March 2023. The new operating licence is subject to a number of conditions, including Lynas beginning the process to develop a permanent disposal facility within the first year from the date of the licence approval, and the company submitting a work development plan for the construction of the PDF and report its development status as determined by the Malaysian Atomic Energy Licensing Board (AELB).

Lynas gets three-year licence extension

Rare earths miner Lynas has received a new three-year operating licence for its Malaysian operation, giving the company leave to operate until March 2023. The new operating licence is subject to a number of conditions, including Lynas beginning the process to develop a permanent disposal facility within the first year from the date of the licence approval, and the company submitting a work development plan for the construction of the PDF and report its development status as determined by the Malaysian Atomic Energy Licensing Board (AELB).

Canada Rare Earth studies location for South American refinery

TSX-V-listed Canada Rare Earth has narrowed its search for a location to base its refinery to six regions in South America. The Vancouver-headquartered company, which sources and sells rare earths, says it has launched a study to consider refinery permitting, logistics and government support, such as grants, tax deferrals and loans to help it determine the two best regions in which to situate a full spectrum refinery. Its refinery will be capable of producing a saleable rare earth concentrate, and the complete range of commercially traded rare earths, including neodymium, praseodymium and heavy elements.