Peak Resources: Preparing for peak NdPr performance
With expectations of securing the licence in the near-term future, the company is committed to proving that the wait has been worth it.
Not only is Ngualla one of the world’s largest undeveloped neodymium (Nd) & praseodymium (Pr) rare earth projects, the plan is to extract maximum value from the ore body through a separation refinery in the UK, CEO ROCKY SMITH tells LAURA CORNISH.
It comes as no surprise that Peak Resources is still waiting for its SML – Tanzania has undergone major changes to its mining regulations which has unfortunately seen new project developments in the country come to a grinding halt.
“It has been a frustrating process but we are now, for the first time since 2017, seeing the country look at evaluating some of its regulatory changes to revitalise the mining sector – the country recognises the potential of its natural resources and wants to harness the opportunities for economic upliftment that can be gained from both the mining and oil and gas sectors.
“The reality however is that Tanzania has become one of the most difficult jurisdictions to do business in in Africa, making companies’ ability to secure finance non-existent and these circumstances simply had to change,” Smith starts.
Despite the difficulties experienced over the last few years, Smith is still optimistic and this is largely thanks to the quality of the Ngualla ore body, the team he has currently negotiating with the government and his confidence that after three years, the award of its SML is imminent.
“Our understanding is that our SML is sitting with cabinet, which is the last step in securing it.
With an SML in place, Peak Resources will look to secure funding to build Ngualla, and an associated downstream beneficiation facility. Smith anticipates this cash raising process to take about 12 months.
“Despite the delay we have a solid funding plan and we are in advanced discussions with respect to securing offtake agreements with companies in Japan, the EU and China, which we will be able to finalise once we receive the SML.”
The beauty of Ngualla
With 40 years of experience in the mining sector, and more specifically nearly four years in the position of MD for Molycorp’s Mountain Pass rare earths operation in California, Smith understands the industry.
The Ngualla deposit, he says, is bigger than the well renowned Mountain Pass and contains significantly high volumes of Nd and Pr – essential components for magnets used in electric vehicles.
The deposit contains a JORC-compliant mineral resource of 214.4 Mt at 2.15% REO (rare earth oxide) and a JORC-compliant ore reserve of 18.5 Mt at 4.80% REO or 1.02% NdPr.
“At the volumes we are targeting initially our project already has a 26-year lifespan and utilises just 9% of the total resource,” confirms Smith.
After mining the weathered cap the company can in future tap into the large un-weathered Bastnaesite zone which offers high grade REO material and potentially another 60 to 70 years of operating lifespan.
Situated in southern Tanzania, 147 km from the city of Mbeya on the edge of the East African Rift Valley or 1 000 km from Dar es Salaam, Ngualla requires additional investment spend in supporting infrastructure – including a power plant (8 MW of HFO and 2 MW of solar power), camp, water wells and the upgrading of 45 km of road to site which is very popular with the Tanzanian government that views the mine as a way of boosting the local economy in the mainly subsistence farming area.
Downstream beneficiation a differentiating factor
The capital spend for the construction of Ngualla – a total of around US$200 million – includes the delivery of a mine and processing plant to produce an REO concentrate that will be shipped to the company’s planned downstream separation refinery in the UK.
In May 2018 the company was granted planning permission to build a $165 million refinery at the Wilton manufacturing site in the Tees Valley, in north-west England.
“This is a great location with a lot of chemical and industrial manufacturing DNA. It is also large enough to accommodate our future expansion plans,” Smith reveals.
The Wilton site is located within 3 km of the deepwater Teesport, from which Peak Resources plans to ship the mineral concentrate from the mine in Tanzania. It is the fifth-largest in the UK by volume, with an annual cargo of 40 Mt.
The Teesside rare earth separation plant positions Peak Resources in a unique position above its peers, who generally within the junior space are not looking to separate their material. In separating its REOs the company will profit from the increased product value upside and free itself from the Chinese dominance on processing rare earth concentrates.
The separation plant is estimated to produce 3 000 tpa of NdPr oxide product from around 32 000 tpa of concentrate, as well as 3 500 tpa of cerium carbonate, 6 000 tpa of lanthanum carbonate and 625 tpa of mid and heavy rare earth carbonate. And this is just the beginning of Smith’s vision.
“Our plan is to double NdPr production to around 6 000 tpa, incorporate a magnet recycling circuit and build a heavy separation plant as well should be secure enough toll treating arrangements for these metals,” Smith outlines.
“Worldwide countries are understanding the issues with sourcing too much of any critical item from China, I believe Teesside could become a new centre of excellence for rare earth separation, producing rare earths for less than China can,” he concludes.