{"id":1141620,"date":"2019-10-02T05:41:37","date_gmt":"2019-10-02T10:41:37","guid":{"rendered":"https:\/\/www.mining.com\/?p=1003409"},"modified":"2019-10-02T05:41:37","modified_gmt":"2019-10-02T10:41:37","slug":"precious-miner-hochschild-taps-into-rare-earths-with-chilean-acquisition","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1141620","title":{"rendered":"Precious miner Hochschild taps into rare earths with Chilean acquisition"},"content":{"rendered":"<p>Precious metals producer Hochschild Mining (LON: HOCH) has gone off script by <a href=\"http:\/\/www.hochschildmining.com\/en\/investors\/news\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">acquiring a rare earths deposit in Chile for $56 million in cash<\/a> as the market for those elements, used in electric vehicles (EVs), battery storage and wind turbines, continues to grow.<\/p>\n<div class='d-flex justify-content-center'>\n<div id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {googletag.display('div-gpt-ad-1561499308230-0');});<\/script><\/div>\n<\/div>\n<p>The Peru-based miner had invested $2.5<br \/>\nmillion in in the BioLantanidos project during 2018 and early 2019 in exchange<br \/>\nfor a 6.2% stake, with an option to increase ownership.<\/p>\n<p>The move gives Hochschild full<br \/>\nownership of the asset, which the company says contains \u201chigh concentrations\u201d<br \/>\nof the coveted elements.<\/p>\n<p>\u201cAlthough the amount invested<br \/>\nrepresents a small percentage of Hochschild&#8217;s current precious metal revenue<br \/>\nand market capitalisation, it provides significant optionality in a market<br \/>\nexpected to grow exponentially,\u201d the company said in the statement.&nbsp;<\/p>\n<p>Production of rare earths is<br \/>\ndominated by China, which accounts for almost 80% of global production. That<br \/>\nsituation may be about to change, as several countries are stepping up efforts to<br \/>\nchallenge Beijing\u2019s dominance in the market.<\/p>\n<p>Last week, the US State Department <a href=\"https:\/\/www.mining.com\/us-steps-up-efforts-to-limit-chinas-control-of-critical-minerals\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">expanded a government initiative<\/a> to promote the supply of rare earths and other minerals in resource rich countries.&nbsp;<\/p>\n<p>Washington has grown more concerned recently about its dependence on mineral imports after China suggested using them as leverage in the&nbsp;<a href=\"https:\/\/www.mining.com\/lynas-blames-us-china-trade-war-for-rare-earths-market-volatility\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">trade war<\/a>&nbsp;between the world\u2019s two largest economies.<\/p>\n<p>Xi Jinping\u2019s administration has used<br \/>\nthe country\u2019s rare earths dominance to make a political point in the past. It<br \/>\nblocked exports to Japan after a maritime dispute in 2010, though the<br \/>\nconsequent spike in prices triggered a race to secure supplies elsewhere.<\/p>\n<p>Australia is also working on curbing China\u2019s supremacy in the market by&nbsp;<a href=\"https:\/\/au.usembassy.gov\/white-house-statement-trump-turnbull-meeting-strengthens-alliance\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">committing to facilitate potential joint ventures<\/a>&nbsp;to improve rare earth processing capacity.<\/p>\n<p>Canberra identified last month&nbsp;<a href=\"https:\/\/www.austrade.gov.au\/ArticleDocuments\/5572\/Critical_Minerals_Projects_in_Australia.pdf.aspx.\"  rel=\"noreferrer noopener\">15 rare earth and critical mineral projects it aims to champion<\/a>&nbsp;as<br \/>\npart of a joint effort with the US.<\/p>\n<p>The announcement followed a move by<br \/>\nAustralia\u2019s Lynas Corp., (ASX: LYC), the world\u2019s largest rare earths miner<br \/>\noutside China. In July, the company signed a deal with its partner, Texas-based<br \/>\nBlue Line, to&nbsp;<a href=\"https:\/\/www.mining.com\/lynas-blames-us-china-trade-war-for-rare-earths-market-volatility\/\"  rel=\"noreferrer noopener\">build a heavy rare earths separation facility in the US<\/a>.<br \/>\nThe facility should begin operations by 2021.<\/p>\n<p>The US has also&nbsp;<a href=\"https:\/\/www.state.gov\/joint-statement-on-u-s-greenland-mou-and-hyperspectral-survey\/\"  rel=\"noreferrer noopener\">signed a memorandum of understanding<\/a>&nbsp;to assist<br \/>\nGreenland in the exploration and development of the island\u2019s resources \u2014 in<br \/>\nparticular,&nbsp;<a href=\"https:\/\/www.mining.com\/greenland-can-but-doesnt-want-to-be-globes-new-top-rare-earth-producer-46188\/\"  rel=\"noreferrer noopener\">its rare earth minerals<\/a>.<\/p>\n<h2><strong>Similar to China\u2019s RREE<\/strong><\/h2>\n<p>Hochschild&nbsp;said the BioLantanidos<br \/>\ndeposit was a clay resource, similar to those in China, with the rare earths,<br \/>\nmostly Terbium, Dysprosium, Praseodymium and Neodymium, occurring at between 20<br \/>\nto 30 meters depth. <\/p>\n<p>Due to the easy access to the<br \/>\nelements, the firm will not need to use explosives or build a tailings dam, it<br \/>\nsaid. Once mined the clay will be washed to desorb the rare earth elements,<br \/>\nwithout using \u201cpotentially harmful chemicals\u201d and then returned to the pits.<\/p>\n<p>The company did not provide an<br \/>\nestimate of the capital spending, but noted the mine \u2014 located about 500 km<br \/>\nsouth of&nbsp;Chile\u2019s capital Santiago \u2014 would become \u201cone of the lowest<br \/>\ncost rare earth producers\u201d.&nbsp;<\/p>\n<p>The investment only represents 5%<br \/>\nof Hochschild&#8217;s market capitalization, but after the precious metals miner\u2019s<br \/>\nprofits were dented by recent weak silver prices, diversifying into the growing<br \/>\nrare earths market&nbsp;seems like a smart move.<\/p>\n<p>Hochschild\u2019s chief executive, Ignacio<br \/>\nBustamante, said the acquisition came after an \u201cextensive long-term project\u201d to<br \/>\nfind commodities with \u201cvery strong growth characteristics\u201d.<\/p>\n<p>The firm \u201cremains focused on<br \/>\nprecious metals\u201d, said Bustmante, but is excited to enter \u201ca key industry with<br \/>\nexpected exponential growth and in a low risk jurisdiction\u201d which \u201ccould see<br \/>\nthe Company become a relevant player in the global rare earth market\u201d.<\/p>\n<p>Over the next 18 months Hochschild will<br \/>\nrevise a feasibility study completed by BioLantanidos, the Chilean<br \/>\ncompany that held the majority stake in the namesake asset, as well as appoint<br \/>\na dedicated management team to oversee the project.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The company consolidated its earlier investment in the asset, gaining full ownership, after being hit by weak silver prices in its half-year results.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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