Northern Minerals has set a $592 million price tag on developing its Browns Range heavy rare earths project, as it seeks to challenge China’s grip on the critical mineral.
Northern Minerals has set a $592 million price tag on developing its Browns Range heavy rare earths project, as it seeks to challenge China’s grip on the critical mineral.
The developer handed down its long-awaited definitive feasibility study for its Browns Range project on WA’s border with the Northern Territory to produce heavy rare earths, with the first batch destined for Iluka Resources’ under-development Eneabba refinery.
Northern Minerals has envisioned an open-pit mine to transition to underground mining, with first production slated for 2028 - when Northern Minerals is betting on a supply deficit of the material controlled by China.
Northern Minerals is projecting capital costs at $592 million, of which it told the market that $77.5 million was contingency. It has previously indicated a $620 million project cost, up from $500 million, with a final investment call overdue.
China has the stranglehold on both production and processing of rare earths, including heavy rare earth elements like Dysprosium (Dy) and Terbium (Tb), which are key ingredients in high-performance magnets in electric vehicles and advanced military systems.
Northern Minerals told the market Browns Range was seeking to "loosen this global stranglehold over these critical transition elements", and forecasted that the project would produce 8 per the current global supply of Dy and Tb.
Browns Range’s ore reserve estimate is 5.18 million tonnes at 0.88 per cent total rare earth oxides (TREO), being a total 45,800 tonnes of TREO. It’s outlined an 11-year life of mine to produce 17,500 tonnes per annum of concentrate at 25 per cent or 4,350tpa of total rare earth oxides.
The developer said dysprosium and terbium accounted for about 70 per cent of Browns Range’s total rare earths basket value.
“The project is one of the most advanced pure-play heavy rare earth elements projects of scale outside of China and the only one in Australia, with first production targeted from 2028 to meet a forecast global shortfall in dysprosium/terbium supply,” Northern Minerals said.
The Perth company hasn’t received any funds from federal government coffers, unlike fellow developers Arafura Rare Earths and Iluka Resources, the latter of which is backed by $1.65 billion of taxpayer dollars.
The market was told Northern Minerals' project finance discussions were ongoing with export credit agencies in Australia, the US and Europe.
The developer has already locked down a long-term deal with Iluka Resources to supply the first 30,500 tonnes of rare earths concentrate to the under-development Eneabba rare earths refinery, north of Perth.
Northern Minerals managing director Shane Hartwig said delivery of the study reaffirmed the strategic potential of Browns Range as a globally significant, near-term source of critical heavy rare earths.
“The DFS outlines a commercially viable, technically robust project with significant upside potential, conditional on ongoing work programs and the strong forecast HREE prices being realised,” he told the market.
“With the Iluka offtake deal, supportive governments in Australia and overseas and key approvals received, we are well positioned to move with confidence to the next stage of Browns Range’s development.”
In June, Federal Treasurer Jim Chalmers escalated the dispute over Northern Minerals' shares, taking legal action against one of the company's foreign investors. The dispute stemmed from Mr Chalmers' orders directing five foreign investors with Chinese connections to dispose their shares in the developer.
It all comes against the backdrop of a Western push to shore up alternative supply chains of rare earths outside of China’s control.
The US-China trade war dried up the flow of the material and exposed the fragility of the current supply chains, prompting the US and Australian governments to intervene in a bid to secure supply.
The Australian government is consulting on its critical mineral stockpile pledge, for which Federal Resources Minister Madeleine King hasn't ruled out setting a price floor and taking equity stakes in developers, which would follow in the footsteps of the US.
The US Department of Defence invested $US400 million in MP Materials - one of the only two producers outside of China - in a milestone move to secure its supply of rare earths. It set a price floor well above current subdued prices for rare earths.
The only other producer is WA’s Lynas Rare Earths, which refines its Mt Weld concentrate in Malaysia, and is trying to get a second plant off the ground in Texas.
