Rare earths have become an emerging part of the Australian mining scene as these ingredients for a greener future have increased in demand. Australian Strategic Materials and Hastings Technology Metals reveal their prospects in this space. Vanessa Zhou writes.
The first few months of 2021 have reinforced that the race to fulfil a future surge in demand for rare earths is gathering momentum.
Even though Australia holds one of the largest resources of rare earth elements globally, it was only in 2019 that the federal government heightened its interest in the commodity.
The government declared rare earths as a critical mineral, explicitly giving its support to all mining companies that plan to delve into or advance operations in this space.
As the Australian rare earth mining sector matures, Lynas Corporation may no longer be the only company to capture a share of the global rare earths market outside of China.
However, rare earths mining presents a unique set of challenges, given it is a relatively young commodity to explore and mine in the country.
UBS mining equity analyst Daniel Morgan says mining companies don’t have a large institutional knowledge base in Australia to draw on to develop their rare earths projects.
“The technical capability to draw on to design and build separation facilities is not as available. It took Lynas about five years to ramp up its Kuantan plant (in Malaysia) to achieve reasonable recoveries,” Morgan tells Australian Mining.
“Much of the rare earths supply chain, including separation facilities and magnet making, takes place in China.”
Aspiring rare earths producer Australian Strategic Materials (ASM) shares this belief, with managing director David Woodall saying that nearly all companies in Australia are producing lower value products, such as carbonates and concentrates.
These products need to be further processed into metals if they are to become ingredients for electric vehicles (EVs) or wind turbines.
“The metal is the product that the manufacturing end users require,” Woodall says.
“If they need neodymium (Nd) powders for neodymium magnets that are going into EVs and wind turbines, we can provide that.
“We are going to produce oxides from the Dubbo project in New South Wales and convert all of those oxides into metals, which is different from any other critical material producers in Australia.”
ASM is set to produce zirconium, praseodymium (Pr), neodymium, niobium and hafnium materials sourced from the Dubbo project in the form of chemicals, powders and metals.
According to Woodall, companies that only produce carbonates, concentrates and oxides will only fetch a fraction of the price of those materials in metal form.
Oxide producers, for example, will be discounted by 25-35 per cent against the benchmark prices in China for their products.
People who are looking into the rare earths market don’t understand this very well, Woodall says.
“It makes a significant difference and is very important because companies that only produce carbonates, concentrates and oxides will only get the discounted prices,” he continues.
ASM operates differently as it plans to build a plant to convert the mined products into metals in South Korea. This is part of the company’s strategy to be a rare earth metals supplier.
Woodall says the facility is targeted for completion in mid-2022 and will potentially be followed by the construction of more metal plants in Australia, Europe and North America.
This comes off the back of ASM’s success with its pilot plant in South Korea, where the company has proven the commerciality of its process with the support of a government grant.
The expertise came from linking with a Korean university professor who knew how to metallise the critical materials.
“Our process ends up being more efficient, uses less energy and importantly doesn’t use a lot of the products that are detrimental to the environment such that the standard processes use,” Woodall says.
“And since we can now convert all of the materials into metal, we don’t talk to third parties or send them to China or Japan for conversion.
“We can talk directly to end users in Europe, Australia, Korea or North America as we have the ability to produce high purity metals that the emerging manufacturing technologies need.”
Woodall believes this is one of the biggest challenges that lies in the rare earths space.
The market consolidation in China (a producer of nearly 90 per cent of rare earth metals and powders) and Japan (around 6 per cent) makes it difficult for Australian producers to compete.
This is where ASM sees its opportunity to build metal plants in Australia and beyond. Others still see abundant prospects to seize the forecast growth of renewable power regardless.
The Office of the Chief Economist predicts that wind and solar generation, which uses rare earths, cobalt and manganese, will account for 35 per cent of generation capacity in 2028.
Sales of EVs are also forecast to increase by at least 25 per cent a year by 2029.
Companies such as Hastings Technology Metals are confident in their rare earths offering to global markets.
Its strength lies in the high NdPr:TREO (total rare earth oxides) ratio of 40-50 per cent at the Yangibana rare earths project in Western Australia.
The project stands in stark contrast to the orebodies in the rest of Australia (including at Lynas’ Mt Weld operation in Western Australia), South America and China, where they hover around a ratio of 20 per cent.
This gives Hastings 75-175 per cent higher value ore products than any rare earth project already in production.
It also puts Hastings in a comfortable position when competing in the supply of the most relevant critical materials needed in EVs, wind turbines and robotics.
“When we first drilled the ground in Yangibana and the results came through in mid-2014, we discovered a high NdPr:TREO ratio,” Hastings chairman Charles Lew says.
Lew knew that developing the process flow was not going to be simple given the lack of available expertise in rare earths processing in Australia.
But it was the quality of the orebody that turned heads and captured the interest of two ex-Lynas employees.
Robin Zhang, former Lynas senior project manager of development, is now part of Hastings’ management team as process engineering manager.
A similar move was made by ex-Lynas chief operating officer Jean Claude Steinmetz, who has become a non-executive director at Hastings.
“(Steinmetz) was amazed at the 40 per cent NdPr:TREO ratio orebody at Yangibana and said he didn’t think any orebody was quite as spectacular as the (number that the Yangibana orebody offers),” Lew says.
“He and (Zhang) assisted in developing the process flow and introducing our orebody to customers around the world, whether they were in Japan, China or Europe.
“Through those early days of developing the process flowsheet and travelling internationally, I can see where the opportunity lies for Hastings and where our market will be in the future.”
Hastings is targeting Germany as its primary market, with a contract due to be finalised with German-originated thyssenkrupp for about half of the company’s production volume (i.e. 7500 tonnes of mixed rare earth carbonate (MREC)) at Yangibana.
Hastings also signed an agreement with German automotive supplier Schaeffler Technologies for 5000 tonnes of Yangibana MREC over a 10-year period.
With construction scheduled to start at Yangibana in the second quarter of this year, Hastings secured commitments to raise more than $100 million in February.
Lew says the company is well-positioned to supply a meaningful volume of rare earths in the market, with a view to commence production by the end of 2023.
Hastings and ASM will be among the Australian miners that are supporting the global aspiration to transition into electrification and renewable power generation.
This will place the Australian mining sector at the centre of the global push towards a sustainable future.
This story also appears in the April issue of Australian Mining.