VHM chief executive officer Ron Douglas on how the company plans to bring its flagship project online to meet growing rare earths demand.
According to the International Energy Agency’s ‘Global Critical Minerals Outlook 2024’, demand for magnet rare earths nearly doubled between 2015 and 2023.
The same report found that demand for rare earths has the potential to double again by 2050 due to the increased adoption of clean energy solutions such as battery storage and solar farms.
As the global energy transition sees the world shift away from fossil fuels and embrace future-facing commodities, Australia is keen to play a part in providing the rare earths needed to meet the growing demand.
China has long held the title as the world’s largest rare earths producer, followed by countries such as Brazil, Vietnam and Russia.
Australia currently makes up four per cent of the world’s rare earths resources and five per cent of the world’s total rare earths production, stemming solely from Lynas Rare Earths’ Mt Weld operation in WA.
A company keen to supply rare earths is VHM, an Australian-based miner that started trading on the ASX in January 2023 through a $30 million initial public offering (IPO).
VHM’s flagship asset is the Goschen rare earths and mineral sands project in the Loddon Mallee region of Victoria, which is on track to achieve first production in the coming years.
VHM closed 2024 on a high by securing its environment effects statement (EES) from the Victorian Government, marking the first time a greenfield mineral sands mine has been greenlit since 2008.
“It was quite a significant event,” VHM chief executive officer Ron Douglas told Australian Mining.
“Concurrently, the Victorian Government released its critical minerals roadmap, sending a clear message to the market that Victoria is back in the mining business.”
Victoria’s critical minerals roadmap highlights the state’s vast mineral reserves and opportunities for growth, with an eye to developing critical mineral processing and battery production industries in the future.
The roadmap also includes the creation of critical minerals priority development zones, providing certainty for players like VHM and local communities in mining locations.
“The city of Melbourne was built off the back of gold mining,” Douglas said. “It was the gold rush at Bendigo and Ballarat that actually (made) Melbourne the richest capital in the world (in the 1880s).
“Victoria then drifted away from mining, but now the state is heading back into it.
“The Murray–Darling Basin holds sands rich with rare earths mineralisation, which can be leveraged to create a new rare earth industry in Victoria.”
Rare earths are listed on the Australian critical minerals list. This basket of minerals includes neodymium, praseodymium, dysprosium and terbium – magnet rare earths with a key role to play in a clean energy future.
In VHM’s case, these rare earths are contained in Goschen’s deposits within minerals such as monazite and xenotime.
“If you go back through the millennia of time, inland seas eroded the granite structures where our orebody is, depositing our mineralisation – both the rare earths and the heavy minerals – into a sand setting as the seas retreated,” Douglas said.
“Our mining is essentially just digging up sand, taking the rocks out, and using gravity spirals to separate the heavy minerals. The rare earths are then separated from that product.
“Many of our competitors are in hard-rock environments, meaning they have to drill, blast, mine, crush and grind ore before they even get to our starting point.”
VHM plans to develop Goschen through a staged approach.
Stage one (years 1–3 of production) will deliver 1.5 million tonnes per annum (Mtpa) of throughput for 4300 tonnes per annum (tpa) of rare earth mineral concentrate (REMC) production and 69,000tpa of zircon-titania heavy mineral concentrate (HMC).
With construction commencing in the fourth quarter of 2025, stage-one production is set to commence in the fourth quarter of 2026. This process will cost $160 million to get up and running.
The combined production of REMC and HMC will then help fund stage-two construction, which is set to commence after the first three years of operations.
This will cost an additional $85–90 million and support 5Mtpa of throughput for 9000tpa of REMC production and 134,000tpa of HMC production. Stage two will support an additional 19 years of mine life.
Douglas said this phased approach, which was developed with Yellow Iron Fleet, de-risks and simplifies Goschen.
“Our benefit is we can, from the cash flow, self-finance to the approved 5Mtpa project,” Douglas said.
With an EES already secured, a Goschen mining licence is next on the agenda. VHM is advancing financing discussions in parallel, which will involve a combination of debt and equity.
“Debt will come from commercial banks,” Douglas said. “The Federal Government is supporting critical minerals development, so we are in discussions with government agencies to see how they can participate.
“We are also seeing how our offtake partners can contribute, with the potential to secure debt and equity.”
Goschen’s Major Project Status was recently extended for three years by the Federal Government, signalling the asset’s importance to meeting the growing rare earths demand.
“We have two revenue streams: heavy minerals and rare earths,” Douglas said.
“Heavy minerals such as zircon and titanium are the building blocks of urbanisation, while rare earths will be critical inputs for renewable technologies.
“We reached an all-time rare earths price high in 2022, and if you look at the last few months, the commodity is ticking up. As long as the market grows, rare earths are a worthwhile investment.”
VHM has established a dual commodity stream to bolster its bottom line in the years to come. With regulatory approvals moving at pace, the company’s Goschen project is becoming a key cog in Australia’s critical minerals aspirations.
This feature will appear in the April 2025 issue of Australian Mining.