Shining a global light on rare earth minerals

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 01 Dec 2011   Posted by admin


MOVING from a development phase into an operational phase during a time of increased global interest in rare earth minerals, Australian company Lynas Corporation is playing a vital role in securing new supplies of the resource outside of the Chinese-controlled market. Lynas has invested in the planning, design, construction and operation of a concentration plant at the Mt Weld rare earth project in Australia, and the planning, design and construction of the Lynas Advanced Materials Processing Plant (LAMP) in Malaysia for the production and distribution of rare earth oxides (REO).
The company was established in 1983 as Yilgangi Gold NL, and took on the Lynas name in 1985. It listed on the ASX in 1986, and started the 21st century by selling off its gold division in order to focus on rare earths.
Rare earth minerals are used in the production of batteries and electronic devices, including mobile phones, computers, audio devices and high-definition televisions. They are also important for advanced electricity generation and control technologies, including those used in hybrid cars, and in the future could play an important role in the reduction of carbon emissions.
Lynas reported that its strategy was to create a reliable, fully-integrated source of rare earths – from mine through to market – and become the benchmark for the security of supply and environmental
standards in the global rare earths industry. This strategy has been built upon the potential of the Mt Weld project, 35 kilometres south of Laverton in WA, which is heralded by the company as the richest known deposit of rare earths in the world.
Lynas intends to produce 11,000 tonnes per annum of rare earths from its Phase 1 project at Mt Weld, increasing this to 22,000tpa during Phase 2. It is estimated that Mt Weld could supply about 8 per cent of the world market by 2012 and about 14 per cent by 2013, when Phase 2 is expected to commence.
The company has been developing the$100 million mine project for the last 10 years and expects it to have a life of 20 years.
The Mt Weld mine was officially opened by WA Premier Colin Barnett on August 4 this year, and it marked an important development in WA’s history of resources.
“As the first significant rare earth mine to be opened outside of China for many years, the Mt Weld project brings an important new capacity to Western Australia’s already diverse and globally
important resources sector,” Mr Barnett said in a statement.
“It will give WA a stake in some of the 21st century’s most exciting technological developments, and strengthen our economic links with Malaysia. “As well as directly employing up to 90 people at its full capacity, the mine is expected to contribute at least $17 million in annual royalty payments to the state,” he said. The REO from the Mt Weld project would be processed at a concentration plant 1.5km
from the mine before being transported by sea container to the east coast of Malaysia. It would then be moved by road and ship to the LAMP, which is within the Gebeng Industrial Estate in Kuantan, before being sold to the global market.
An initial mining campaign at the Mt Weld project was completed in June 2008. It mined 773,300t of ore with an average grade of 15.4 per cent REO; on budget and ahead of schedule. This ore was stockpiled on site and provided sufficient ore for more than two years of downstream processing operations.
The first crushed ore was fed to the ball mill of the concentration plane in May 2011. By late July, the concentration plant had achieved a final concentrate grade of 36 per cent REO and a recovery
rate of 68.7 per cent, on a month-to-date basis, compared to a target final concentrate grade of 36 per cent REO and a recovery rate of 45 per cent for this point in the planned ramp-up schedule. The first feed of concentrate at the LAMP is scheduled for the fourth quarter of 2011. Lynas, having received all required approvals to construct the LAMP, is in the process of applying for all pre-operation and operation approvals.
By June this year, the LAMP construction was about 60 per cent completed. The total number of equipment procurement packages stands at 146, with 144 packages awarded. The final packages, comprising fire hydrant hoses and office building furniture, was awarded during the September quarter. However, the project has not been without controversy. Both Australian and Malaysian politicians and members of the public protested against the transport and processing of Lynas’s rare earth ores.
Media reports stated that Fremantle Independent MP Adele Carles called for a cessation of the transportation of rare earth ores through Fremantle due to potential radioactivity, claiming that the rare earth ores could pose a risk to public health.
Lynas countered these reports by reminding media that the transportation of its rare earth ores had been approved by the Department of Environment and the Department of Health. Additionally, in response to community requests, the Malaysian International Trade and Industry minister appointed an independent panel of international experts to conduct a review of the health, safety and environmental aspects of the
LAMP. The panel comprised eminent representatives of the International Atomic Energy Agency (IAEA) and, after a visit to Kuantan, the IAEA submitted its completed report to the Malaysian Government on June 30.
The report confirmed that once completed, the LAMP is expected to be safe and fully compliant with international standards. “The pre-operational licence for the LAMP remains subject to regulatory approvals; however there is a conclusive path forward following the release of the IAEA independent report and the Malaysian Government’s clear announcement of implementing recommendations within the report,” a
Lynas report stated. Other points made by the report included that: many of the mineral concentrates processed in other countries under similar arrangements were considerably more radioactive than those to be processed in the Lynas project; sufficient information was available on the safety assessment method, models, scientific data and site-specific data for making an adequate evaluation of the potential short- and long-term radiological impacts on humans and the environment; the safety assessment process, as documented in the material made available to the review team, was found to be consistent with international standards and no instances of non-compliance with the standards were identified; the review team was not able to identify any non-compliance with internationalradiation safety standards; Malaysian laws and regulations regarding radiation safety were in good conformity with the IAEA standards and, in some cases, the Malaysian regulations were even more strict; the Lynas Radiation Protection Plan was found to be in accordance with the Atomic Energy Licensing Board (AELB) guidelines; and the rare earths concentrate, at a combined activity concentration of 6 becquerels* per gram was not subject to regulations and could be transported internationally as an ordinary non-hazardous material from a radiation safety point of view because, in accordance with international standards, they pose such a low radiation hazard during transport that there is no net benefit in regulating them. The report concluded that “workers and members of the public would be adequately protected such that there will be no discernable radiological health effects attributable to the operation of the facility”.
On the back of these controversies, Lynas posted a 33 per cent increase in its full-year loss.
The company reported a net loss for the year ended June 30 of $57 million, compared with a net loss of $43 million for the previous year. At the same time, the company’s shares fell $0.03, or 4.5 per cent, to $1.055.
The loss was flagged when Lynas received a query from the ASX noting a sharp slump in the company’s share price and heavy trading volumes of about 43 million shares. Lynas’s operating expenses shot up
87.5 per cent from $30.65 million to $57.46 million, a result it blamed on higher operating costs due to increased production. Lynas company secretary Andrew Arnold defended the company, issuing a written response to the ASX that it was not withholding any information that could explain the trading. “The company is not aware of any reason for the price change and increase in volume of securities,” he said.
On September 2, Lynas signed a new long-term supply agreement with BASF Corporation.
Under the agreement, Lynas will supply rare earths from the LAMP for BASF’s Fluid Catalytic Cracking business.
“Lynas is extremely pleased to sign a long-term contract with BASF Corporation, a very important customer in the rare earths industry,” Lynas executive chairman Nicholas Curtis said. “The contract is another example of how Lynas is able to stabilise the important rare earths supply chains for major industrial users.” Speaking of the company’s progress, Mr Curtis said: “This is significantly ahead of other new rare earths projects that have been announced outside China.”
“We will continue to develop long-term and close relationships with industrial partners who require rare earths. “We believe this contract again endorses the standards and quality to which the LAMP is being built in Malaysia.”
The contract will be for product supplied from both Phase 1 and the Phase 2 expansion of the LAMP. The latest agreement follows a July 2011 Letter of Intent with Siemens Drive Technologies Division in Germany to establish a joint venture company for the sustainable production of neodymium-based rare earth magnets. The JV would be led by Siemens, with the planned shareholding of the JV company to be 55 per cent Siemens and 45 per cent Lynas. Lynas intends to provide raw materials, predominantly a combined neodymium/praseodymium metal, through a long-term supply contract. The JV magnets will serve
Siemens’ production requirements for energy-efficient applications – mainly for wind turbine generators. Additionally, Lynas has a Strategic Alliance Agreement with Sojitz Corporation to secure additional rare earth products for the Japanese market by accelerating the expansion of the Lynas project. The agreement will result in a stable and long-term source of supply for the Japanese market by providing a framework for Lynas and Sojitz to agree to off-take, distribution and financing arrangements during 2011. The $325 million financing arrangement will also allow acceleration of Phase 2 of the Mt Weld and LAMP projects.

 

By Rachel Seeley


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