Slide 1: Outlook for Zirconium and Rare Earth Materials until 2020
Outlook for Zirconium and Rare Earth Materials until 2020 Hong Kong November 2013 Alister MacDonald -Technical Ceramic Marketing Services Ian Chalmers – Alkane Resources Ltd
Slide 2: Rare Metals - Rare Earths
Rare Metals - Rare Earths Rare Metals – Rare Earths • China produces 90% of world downstream zirconium chemicals & 50% of fused zirconia • China currently produces 80-90% of world REE output • China is limiting the export of raw rare earths Rare metals materials • Brazil produces 90% of world niobiu
Slide 3: Zirconium industry
ALKANE . . RESOURCES LTD Zirconium industry GD 20st eacian Zirconia Lto APPLICATIONS FOR ZIRCONIUM MATERIALS Electronics -Dielectrics Ceramics —- f PF — Piezoelectrics -Ceramic colours e J & -Multi layer capacitors -Enamels & -Oxygen sensors” -Opacifiers Catalysts -Automotive — -Gasoline & diesel -I
Slide 4: Zirconium Industry
Zirconium Industry Zirconium Chemicals Output (2011 – 194,000t ZrO2 basis CAGR 5-10% ) Increasing prices Increasing purity • Global market US$3-4B • Mid 2013 consumer zircon inventories running down • Market expected to move back into under supply 2015 - 2016 • Prices starting to recover • 18% - 20%
Slide 5: Zirconium Demand to 2020
Zirconium Demand to 2020 Zirconium materials 2011 2012 2015f 2020f 2020f (100% ZrO2 basis) tpa tpa tpa tpa tpa Growth rate %/year 7% 5% 7% Baddeleyite 7,000 6,000 8,000 8,000 8,000 72,000 48,000 59,000 71,000 82,000 Fused unstabilised zirconia Fused stabilised zirconia 25,000 17,000 21,000 25,000 29
Slide 6: Zirconium Issues to 2020
Zirconium Issues to 2020 • Availability of premium zircon for fused zirconia - will require ~160-180,000t - low Al2O3 with minimal particle size < 45 micron - availability of zircon with <300 ppm U+Th • Consolidation of Chinese fused and zirconium chemical industry • Environmental and OH&S cost pres
Slide 7: Rare Earth Applications
ALISANE Rare Earth Applications PD avsreavan ZIRCONIA LTD (A suasiolaRy OF ALKANE RESOURCES LTO} APPLIGATIONS FOR RARE EARTH MATERIALS Electronics -Display phosphors (CRT, PDP. LCD) -Medical imaging . phosphors Ceramics Cata lysts -Lasers -Capacitors -Automotive catalytic converter -Fibre Optics ~Se
Slide 8: REE industry in 2013
REE industry in 2013 • Global Market ‘Value’: US$3-5 B (US$30-50/kg REO) • Estimated global demand in 2013: 110-125,000t REO • China dominant: • producing 80-100% REO (80-90% of global supply) • almost 100% of heavy rare earths • consuming 80-90,000t REO (60-70% global demand) • Japanese consumption
Slide 9: REE Industry
REE Industry REE DEMAND 2016 Other Catalysts • Total REE consumption 2012 115,000t 12% 15% with annual growth estimated at 5- Ceramics 10% to be 162,000t in 2016 6% • China produces about 90% of world Glass 6% supply and consumed about 65%, Phosphors with Japan 15% and the US 14% 8% • The REE indust
Slide 10: REE Industry in 2016
REE Industry in 2016 Forecast Supply and Demand for Selected Rare Earths in 2016 Demand @ Supply @ Rare Earth Oxide 150-170,000tpa REO 180-210,000 Cerium 50-70-000t REO 70-80,000t REO Neodymium 30-35,000t REO 25-30,000t REO Dysprosium 800-850t REO 1,000t REO Terbium 450-500t REO 250-300t REO Yttrium
Slide 11: REE Industry Supply/Demand
REE Industry Supply/Demand Source: IMCOA 11
Slide 12: REE Industry in 2020
REE Industry in 2020 • Demand in 2020: 200-240,000 tpa REO • Demand trends: • Greater availability of non- Chinese products • Greater total supply chain management • Higher consumption of HREEs if available • Supply in 2020: 240-280,000 tpa REO • Supply trends: • Limited scope for pure LREE projects
Slide 13: The Dubbo Zirconia Project
The Dubbo Zirconia Project • A very large* polymetallic resource of the metals zirconium (hafnium), niobium (tantalum), yttrium and rare earths • Important and strategic metal mix, including 25% heavy rare earth • Open pit life of at least 70 years • Demonstrated flow sheet with pilot plant and prod
Slide 14: Process Flow Sheet
Process Flow Sheet • Simple open cut mining operation • Crushing and grinding • Sulphuric acid, roast, leach whole of ore • Solvent extraction, separation & refining © 14
Slide 15: DZP Pilot Plant
DZP Pilot Plant Operating at ANSTO Since 2008 15
Slide 16: Product Output @ 1Mtpa
Product Output @ 1Mtpa 100% 5% 1,309t 90% 20% 4,665t 95% yttrium, dysprosium, 30% 80% terbium 28.5% of revenue 8% 1,967t 70% 60% 90% neodymium, 24% praseodymium 50% 21.6% of revenue 15,827t 40% 16% 67% 30% 20% 31% 10% 0% Production 23,768t Revenue A$450 - 500Mpa ZrO2 Nb metal LREO concentrate HREO c
Slide 17: DZP Road to Market
DZP Road to Market AZL MoU’s and Agreements to secure 100% of output Zirconium (Zr) • Leading chemical company to develop applications and markets in Asia for zirconia produced by DZP • European manufacturer/trading company to market DZP products in Europe and North America • Ceramic colours laborat
Slide 18: DZP Major Milestones
DZP Major Milestones Major Milestones 2013 2014 2015 2016 Environmental Impact Statement Project Approval Process Project Financing Program EPC / EPCM tender award Detailed design / Long lead orders CONSTRUCTION PRODUCTION © 18
Slide 19: Disclaimer
Disclaimer Disclaimer 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 other trend projecti
Slide 20: DZP Resource & Reserves
DZP Resource & Reserves Dubbo Zirconia Project – Mineral Resources Toongi Tonnage ZrO2 HfO2 Nb2O5 Ta2O5 Y2O3 REO Deposit (Mt) (%) (%) (%) (%) (%) (%) Measured 35.70 1.96 0.04 0.46 0.03 0.14 0.75 Inferred 37.50 1.96 0.04 0.46 0.03 0.14 0.75 Total 73.20 1.96 0.04 0.46 0.03 0.14 0.75 These Mineral Reso