Slide 1: Economics of Rare Earth Projects
For personal use only Economics of Rare Earth Projects Ian Chalmers Technical Director Alister MacDonald General Manager - Marketing
Slide 2: Why rare earths?
Why rare earths? Oil is the blood; steel is the body; but rare earth elements are the vitamins of a For personal use only modern society (anon?) Rare earth elements can be regarded as the "vitamins" required for the shift from a carbon based economy to the new 21st century electron economy (many ref
Slide 3: Rare Earth Applications
Rare Earth Applications For personal use only Source: IMCOA © 2017 Alkane Resources Ltd 3
Slide 4: Rare Earth Demand Drivers
Rare Earth Demand Drivers REE Demand 2016 by Application For personal use only • US$3-5B Global market Other Catalysts 8% • 159,500t Annual consumption 2016 18% • 6-8% Annual growth estimates Ceramics 5% • 85-90% REE produced by China Glass 6% Phosphors • Permanent magnets dominate 5% consumption an
Slide 5: Rare earth permanent magnets (REPM)
Rare earth permanent magnets (REPM) 1. Luxury electric vehicle contains ~4.5 kg of REPM • 2.0 kg for traction motor; 2.5 kg for other motors (windows, seats etc) For personal use only • Contains 31% rare earth Pr/Nd alloys, or 1.4 kg • 1 million EVs require ~1,400 tpa of PrNd alloy • Annual growth +
Slide 6: China: Critical Supply Issues to 2025
China: Critical Supply Issues to 2025 For personal use only 1. China Manufacturing 2025 is targeting 70-80% domestic supply by 2025 for key high value markets • Critical supply risk for rare earths and zirconium chemicals as China supplies 90+ % of world supply • 50% of rare earths supply is non-quo
Slide 7: Military Applications – strategic importance
Military Applications – strategic importance For personal use only Source: Critical Rare Earths, National security, and US China Interactions. David L An.2016 7 © 2017 Alkane Resources Ltd
Slide 8: Where are the rare earths?
Where are the rare earths? Deposits and mineralogy For personal use only The major deposits – alkaline intrusive complexes and rarely volcanic sequences. All have variable mineralogy and uranium and thorium content. Others in secondary surficial environments (ionic clays); or deep sea muds; fly ash.
Slide 9: How do we get there? Deposit to product output
How do we get there? Deposit to product output For personal use only Area selection Exploration Resource Process • Geological • Mapping • Definition Development • Previous work • Drilling • Geo-metallurgy • Metallurgy • Feasibility Pilot Plant Environment Offtake Financing • Prove flow sheet • Impac
Slide 10: Capital Costs
Capital Costs Most current rare earth production facilities include upfront mineral beneficiation followed by For personal use only “cracking” and dissolution of the minerals; then separation by solvent extraction and refining of the individual rare earths. There are several other extraction and r
Slide 11: Price Sustainability – the neodymium example
Price Sustainability – the neodymium example For personal use only The “2011 boom”, initiated by a geo-political event and exacerbated by rampant speculation (mostly traders) Calls for rare earth substitutions, thrifting and some amazing “discoveries”. The sustainability window (?) US$60-110/kg NdPr
Slide 12: Economics
“Economics” Indicative valuations based upon industry generalisation with a +/- 15-20% accuracy For personal use only Current Price Range Source Source Source Source Source Source Recovery % Operating economics for six RE Product Units US$/kg FOB China Basnasite ppm Monazite ppm Xenotime ppm Apatite
Slide 13: Summary of Economic Drivers for REs
Summary of Economic Drivers for REs ✔ Quality of the resource – grade, recovery, metal distribution For personal use only ✔ Location and access to infrastructure ✔ %willofdrive “magnet metals” Nd, Pd, Dy, Tb and Sm in production that revenue ✔ Volume and quality of off-take agreements ✔ Operating co
Slide 14: Financing
Financing ECONOMICS For personal use only Rare earth (and rare metal) projects involve complex processing options to produce marketable products. To generate reasonable financial returns, these projects require stable and sustainable product prices, and economies of scale which usually relate to l
Slide 15: Strategic Issues
Strategic Issues China’s dominance of the markets for rare earths, and for some specific rare metals, will For personal use only continue with the clear public statements by the Chinese Government of the intention to maintain and expand China’s advanced manufacturing capabilities. Source: Karl Geral
Slide 16: Strategic Issues – Financing Perspective
Strategic Issues – Financing Perspective Geopolitical and sovereign risk. Recent actions by African and South American For personal use only governments demonstrate that this risk remains very high. What countries are “safe”? Supply chain visibility. The large issue of product from illegal mining/pr
Slide 17: Alkane Resources Ltd Thank You
Alkane Resources Ltd Thank You For personal use only Multi commodity mining company Focussed in the Central West New South Wales Two major projects through subsidiaries Australian Strategic Materials Ltd (ASM) • Dubbo Project - technology metals Production of Zr, Hf, Nb and REEs Tomingley Gold Opera
Slide 18: Acknowledgements
Acknowledgements For personal use only This presentation contains certain forward looking statements and forecasts, including possible or assumed reserves and resources, production levels and rates, costs, prices, future performance or potential growth of Alkane Resources Ltd, industry growth or oth
Slide 19: Dubbo Project Resources & Reserves
Dubbo Project Resources & Reserves Dubbo Project – Mineral Resources For personal use only Resource Category Tonnes ZrO2 HfO2 Nb2O5 Ta2O5 Y2O3 TREO* (Mt) (%) (%) (%) (%) (%) (%) Measured 42.81 1.89 0.04 0.45 0.03 0.14 0.74 Inferred 32.37 1.90 0.04 0.44 0.03 0.14 0.74 Total 75.18 1.89 0.04 0.44 0.03