Power of partnerships rare earth strategy
Vital shows bigger is not always better when it comes to REEs Metal Tech News – February 24, 2021
Last updated 2/24/2021 at 7:24am
Instead of the economies-of-scale strategy typically used to get a viable rare earths project into production, Australia-based Vital Metals Ltd. has taken a power-of-partnerships approach to rapidly begin supplying global markets with rare earth oxides from its Nechalacho project in Canada's Northwest Territories.
Under this partnership strategy, Vital has contracted a local First Nations to do the mining. It will apply its own expertise to upgrade the ore to a REE concentrate that will be further processed into rare earth oxides by a company in Norway.
With this strategy, Vital is taking Nechalacho from concept to production in just two years – a timeline that is unheard of for a mining project in Canada.
This is good news for the companies that require praseodymium and neodymium to make the powerful magnets that go into electric vehicles, wind turbines, high-fidelity speakers, computer hard drives, and numerous other high-tech and industrial products.
Currently more than 75% of the world's separated rare earth oxides are produced in China.
The Vital secret to rapidly bringing Canadian rare earth oxides to the marketplace is the selection of a project that can be upgraded to a high-grade product with simple ore-sorting technology. Without the need for a complex ore processing facility, the coming Nechalacho Mine is something akin to a gravel quarry – simply mine and crush near surface rock and sort out the best material to be transported.
"We are developing Nechalacho using the most sustainable methods possible which includes the use of local labor so that we can support the communities surrounding our project," said Vital Metals Managing Director Geoff Atkins.
Ore sorting tests using x-ray transmission (XRT) technology upgraded Nechalacho material with an average grade of 10.5% rare earth oxides to a rough concentrate averaging 36% REO, while retaining about 70% of the available rare earths.
This upgraded intermediary product will be upgraded at Vital's rare earth extraction plant in Saskatoon, Saskatchewan before being shipped to the Norway-based REEtec to separate first high purity rare earths out of the concentrates later this year.
First Nations miners
At the front end of Vital's power-of-partnerships rare earths production strategy is a mining and earthworks contract with Det'on Cho Nahanni Construction Ltd., a Northwest Territories-based company 51% owned by Det'on Cho Corporation, which is in turn owned by the Yellowknives Dene First Nation.
"The signing of our mining contract in Yellowknife is an important step forward for Vital as we move toward production at Nechalacho, and we are pleased to be working with Det'on Cho Nahanni Construction Ltd, which is owned by local First Nations people," said Atkins.
After mobilizing to Nechalacho via an ice road by the end of March, Det'on Cho Nahanni Construction will begin the early earthworks such as site clearing, road building, and retention pond construction.
"The Yellowknives Dene First Nation is pleased to be the first Indigenous group in Canada to be responsible for mineral extraction on their traditional territory," said Yellowknives Dene First Nations Chief Ernest Betsina. "When indigenous people conduct the mining operations, they are better able to control the process, resulting in better safeguarding of the environment."
Under the direction of Cheetah Resource Corp., Vital's Canada-based subsidiary, Det'on Cho Nahanni Construction will mine near surface rare earth ore from a small open pit at North T, a near surface deposit at Nechalacho that hosts 105,000 metric tons of resources averaging 8.9% (9,345 metric tons) total rare earth oxides. The ore mined from North T will be stockpiled for processing with a sorting plant operated by Cheetah.
It is expected that Det'on Cho Nahanni Construction will be able to stockpile enough ore this summer to feed Vital's ore sorting plant through 2023.
Vital anticipates that the First Nation-owned construction company will be needed for a second mining campaign to replenish stockpiles in 2024.
"Meaningful participation in the extraction of critical minerals for the green economy provides employment and procurement benefits for our members and businesses," said Chief Betsina. "We look forward to increasing our participation as the Nechalacho rare earth project grows in the years to come."
To further upgrade this ore to a product that is ready for separation into the individual rare earths needed for a wide array of high-tech and commercial products, Vital has signed agreements with Saskatchewan Research Council for the construction and operation of a rare earths extraction plant in Saskatoon that will produce a mixed rare earth carbonate product.
Last August, the Saskatchewan government announced a C$31 million investment in a Saskatchewan Research Council-operated rare earth processing facility that will help to establish a rare earth supply chain in Saskatchewan and form a model for future commercialization of REE resources in Canada.
"Saskatchewan's new rare earth processing facility will be a catalyst to stimulate the resource sector in Saskatchewan and across Canada, providing the early-stage supply chain needed to generate cash-flow, investment and industrial growth of the sector," said Saskatchewan Premier Scott Moe.
Further details about this rare earth facility can be read at Saskatchewan REE separation plant coming in the September 2, 2020 edition of Metal Tech News.
Cheetah's rare earth carbonate production plant is being developed adjacent to Saskatchewan Research Council's REE processing facility in an industrial park in Saskatoon, the largest city in Saskatchewan.
"Being the only rare earth project in Canada with near term production capability, co-located with Canada's only separation facility, provides Vital the opportunity to be a cornerstone of the North America critical minerals strategy," Atkins said upon signing a term sheet agreement with Saskatchewan Research Council last September.
The final phase of Vital's power-of-partnerships strategy of bringing Canadian rare earth oxides to the market is an agreement with Norway-based REEtec to separate the mixed rare earth carbonate product produced in Saskatchewan into rare earth oxides.
"The signing of this agreement will enable REEtec and Vital to work together to supply separated rare earth oxides, which are competitive to products produced anywhere else in the world into the electric vehicle and wind turbine markets," said Atkins.
Under a rare earth offtake and profit-sharing agreement signed Feb. 2, Vital will provide REEtec 1,000 metric tons of rare earth oxides per year, not counting the cerium.
The magnet rare earths praseodymium and neodymium are expected to account for roughly 447 metric tons of the annual rare earth oxides covered under the preliminary offtake agreement. When it comes to volume, this would make up roughly 45% of the rare earth oxides mined by Vital and separated by REEtec. When it comes to value, however, these two rare earths account for US$37 million, or roughly 87% of the expected value at current REE prices.
"Through this agreement with Vital Metals, REEtec is taking further steps to secure access to rare earth feedstock and thereby strengthening our ability to offer competitively priced magnetic materials to our customers," said REEtec CEO Sigve Sporstøl.
REEtec says the energy demand for its new and potentially game-changing rare earths separation technology is very low, and the Norwegian company is able to recover and reuse virtually all of the chemicals used, which makes the process highly efficient and environmentally sound.
"In the same way that Vital is focusing on the development of a low environmental impact mining operation at Nechalacho in Canada's Northwest Territories, it is also a pleasure to be able to join with a likeminded company to develop a source of rare earths to support our customers in the diversification of their supply chains," Atkins said.
This diversification of the rare earth supply chains dominated by China has become increasingly important to government leaders in the United States, Japan, Australia, and the European Union.
Vital intends to grow the scale of its operations at Nechalacho and the offtake and profit-sharing agreement with REEtec provides the companies with the option to increase this offtake volume up to 5,000 metric tons of rare earth oxides per year, minus the cerium.
"We believe the step-by-step growth approach of Vital is complementary to our own," said Sporstøl. "We look forward to growing our businesses together while providing our partners further down the value chain with a more diversified source for their much-needed magnetic materials."