PROJECT FOCUS
Zandkopsdrift’s
rare earths
John Chadwick recently visited one of the largest known rare earth resources outside
of China to be classified under international resource reporting standards
rontier Rare Earth’s primary asset is the
Zandkopsdrift project containing 950,000 t
TREO. The Zandkopsdrift B Zone has the
highest TREO grade and the highest grade of
high value HREOs of significant advanced
deposits (those with >200,000 t TREO) known
outside of China.
Frontier plans to commence production of
separated rare earths from Zandkopsdrift in
2015 at a rate of 20,000 t/y. There are probably
some 500 RE projects globally but in all
probability it’s only going to be about ten of
them that become mines. Zandkopsdrift should
be one of those successes. It has a number of
advantages that single it out:
■ It is large and high grade, but with low
radioactivity – thorium averaging 178 ppm
and uranium 47 ppm - (which will make
permitting simpler and reduces
environmental concerns)
■ It will be a simple to mine surface deposit
located near significant infrastructure
■ Monazite is the principal host mineral which
should simplify processing
■ It will produce and sell the individual
elements rather than an HREO concentrate
■ It is positioned to be the answer to South
Korea’s RE needs.
Last December Frontier Rare Earths signed a
definitive agreement with Korea Resources Corp
(KORES), the Korean Government-owned mining
and natural resource investment company, to
form a strategic partnership designed to
accelerate the development of Zandkopsdrift.
Kores also announced that its intention to form
a consortium comprised of a number of leading
Korean companies to join the Frontier joint
venture, including Samsung Group, Hyundai
Motors Group, GS Group, Daewoo Shipbuilding
F
TREO = total rare earth oxides and includes the
elements lanthanum to lutetium expressed as
trivalent oxides
HREO = heavy rare earth oxides; high value
HREOs are europium, terbium and dysprosium
& Marine Engineering Group (DSME), and AJU
Group.
The agreement involves an investment in both
Zandkopsdrift and Frontier and an offtake
arrangement that could commit up to 31% of
future production. Under the terms of the
agreement, the KORES Consortium will acquire
an initial 10% interest in Zandkopsdrift and with
such acquisition secure offtake rights for 10% of
rare earth production from Zandkopsdrift. The
agreement provides that the KORES Consortium
can also acquire a further 10% interest in
Zandkopsdrift and up to a 10% share ownership
of Frontier, which, if acquired, would give Kores
off-take rights for an additional 21% of rare
earth production from Zandkopsdrift.
“The signing of this definitive strategic
partnership agreement is a compelling
endorsement of Zandkopsdrift” said James
Kenny, President and CEO of Frontier Rare
Earths. “We are proud that the KORES together
with a consortium of leading Korean companies,
such as Hyundai Motors and Samsung, have
identified Zandkopsdrift as a key source of
future rare earth supply. The consortium
companies have combined annual sales of
approximately $300 billion, so their willingness
to partner with Frontier is a strong statement
about the economic potential of the
Zandkopsdrift project, and the capabilities of
our management team.”
Kenny added, “Korea has an international
reputation for worldclass manufacturing,
technological and financial capabilities. KORES
is at the forefront of Korean industry’s drive to
secure stable supplies of natural resources, of
which rare earths are considered to be one of
the most critical. Working together with our
Korean partners, we are confident that Frontier
will achieve its objective of becoming one of the
first new large-scale rare earth producers
outside of China.”
Shin-Jong Kim, President and CEO of KORES
said, “In order to support Korea’s high
technology, automotive and other industries, the
development of Zandkopsdrift will be a strategic
priority project for the KORES Consortium and a
critical element of KORES’ efforts to secure a
long term, stable source of rare earth supply for
Korean industry.”
Together with Frontier, the KORES Consortium
will also investigate other rare earth related
downstream businesses including rare earth
metals, rare earth alloys and rare earth
magnets.
Samsung is a multinational conglomerate
whose subsidiaries include Samsung Electronics
(the world’s largest information technology
company by revenue and the largest
manufacturer of smartphones ahead of Apple),
Samsung Heavy Industries (one of the world’s
largest shipbuilders) and Samsung Life
Insurance (the world’s 14th largest insurance
company). Hyundai is the world’s fourth largest
car manufacturer by volume. GS Group is a
Korean holding company focusing on oil refining
and retail. Daewoo Shipbuilding & Marine
Engineering Co. operates as a shipbuilder and
offshore contractor that builds various vessels,
offshore platforms, drilling rigs, floating oil
production units, submarines, and destroyers. It
is also active in the wind turbine sector. AJU
Group is a privately owned Korean business
which has business activities spanning energy,
resource development, construction materials,
finance, tourism and leisure and real estate
development.
The Zandkopsdrift project comprises an area
of approximately 60,000 ha in the Namaqualand
region of South Africa’s Northern Cape Province.
It is well situated some 450 km north of Cape
Town and 230 km north of the deep water port
of Saldanha Bay. Access to and infrastructure
surrounding Zandkopsdrift is generally
excellent.
Robust PEA
A Preliminary Economic Assessment (PEA) has
just been completed and a prefeasibility study is
under way, with completion expected by the end
of the year. Highlights of the PEA include:
■ NPV of $3.65 billion, after tax and royalties,
at an 11% discount rate
■ IRR of 52.5% , after tax and royalties, and
two-year payback from start of production
■ Average production of
20,000 t/y of
separated REO,
generating average
annual revenues of
$1.1 billion and an
estimated operating
margin of 78%
■ 20-year mine life,
supported by the
mining and processing
of 19.5 Mt of material
with an average in-situ
grade of 3.12% TREO
and average
metallurgical recovery
of 67%
■ Capital costs of $910
million for a 1 Mt/y
open-pit mining
operation and
concentration and rare
earth separation plant
facilities
■ Conventional
metallurgical process,
comprising
comminution, flotation, sulphuric acid
cracking and solvent extraction.
An REO ‘basket price’ of $58.23/kg has been
used for production, based on an average of
three-year China Free on Board average REO
prices and Roskill’s mid-point 2015 REO
forecasts applied to Zandkopsdrift’s in situ REO
relative distribution. The PEA estimated average
operating costs at $13.09/kg of separated REOs
There is potential for life of mine to be
extended beyond the initial 20 years, as the PEA
mine plan only exploits about 60% of the
current estimated TREO resource at
Zandkopsdrift.
“Frontier is now well-positioned to achieve
our objective of becoming one of the first
significant new producers of separated rare
earths outside China by 2015,” said Kenny. “The
results of our PEA demonstrate the economic
attractiveness of our project, and we have a
world-class partner in KORES. KORES intends to
invest in Zandkopsdrift, provide technical and
financial assistance, and secure off-take of up to
31% of Zandkopsdrift production.”
The PEA was carried out by Venmyn Rand,
one of South Africa’s leading independent
advisors specialising in the technical and
economic evaluation of mineral projects, with
contributions from a number of specialist
consultants, including MSA for resource
estimation, Sound Mining Solution (SMS) for
the optimised mine design and mine schedule,
SGS Minerals Services for metallurgical
flowsheet development, and SNC Lavalin for
PROJECT FOCUS
earth deposits being evaluated and developed
globally, most notably Lynas Corp's Mount Weld
deposit in Australia (IM, February 2012, p6) The
highest value HREOs, namely europium, terbium
and dysprosium, are contained at elevated
levels at Zandkopsdrift compared to several
other deposits being evaluated elsewhere.
Big resource
Zandkopsdrift contains some 22.92 Mt at an
average grade of 2.32% in the Indicated
resource category (532,000 t of TREO) and an
additional 20.81 Mt containing 415,000 t of
TREO in the Inferred resource category applying
a 1% TREO cutoff.
Significantly there are a series of higher grade
zones within the overall resource estimate that
are considered to be of sufficient size to be
Zandkopsdrift detailed mine layout
engineering design and capital and operating
cost estimates.
At the start of 2011 Frontier Rare Earths
initiated an extensive 15,000 m drilling program
and SGS Minerals Services started undertaking
metallurgical test work on material recovered in
order to develop a flowsheet for the recovery
and processing of REOs from Zandkopsdrift.
SNC-Lavallin was been appointed lead
engineering consultant for a preliminary
economic assessment.
The Zandkopsdrift deposit comprises a
carbonate-rich, magmatic rock deposit
containing significant rare earth element
bearing mineralisation within near surface,
deeply weathered phases that crop out. The
carbonatite is exposed as a well-defined,
outcropping hill, about 40 m above a
surrounding plain. Zandkopsdrift has been the
subject of a number of geological, mineralogical
and metallurgical investigations from the 1950s
onwards. Most of the work was carried out by
Anglo American in two phases over a six-year
Cutoff grade
(TREO)
Indicated Resource
Inferred Resource
1%
1%
period, including during the 1980s, when the
rare earth potential was investigated. All of the
available rare earth related data from Anglo’s
work, which included extensive drilling, bulk
sampling, metallurgical testing and related
analyses, as well as Anglo’s original cores, pulps
and other samples, were acquired by Frontier in
2008. These data and samples were validated
by independent geological consultants, MSA,
and significantly helped to fast track the project.
The Anglo data and that from work carried out
by the company allowed MSA to produce a CIM
compliant resource estimate and a NI 43-101
compliant independent technical report on
Zandkopsdrift.
The main rare earth bearing minerals of
monazite and crandallite and the mineralisation
styles at Zandkopsdrift are similar to other rare
Tonnes
(millions)
(TREO)
22.9
20.8
Average
grade
2.32%
1.99%
exploited as discrete units within the deposit.
The 2.5% cutoff zone is a discrete area referred
to as the Zandkopsdrift B-zone which contains
some 450,000 t of REO and is expected to be
the initial mining focus.
The average stripping ratio is 3:1, which
includes both material between the 1% TREO
cutoff and 2% TREO, and waste. The PEA
predicts mining dilution of 7.5% with production
due to start in the second half of 2015 and
taking one year to get to full production.
A high grade zone of mineralisation within the
overall Zandkopsdrift resource, referred to as
the Central Zone, was defined as the basis for a
mine design that would allow the production of
20,000 t/y over the 20-year LoM. The Central
Zone consists of the mineralisation above a
grade of 2.0% TREO, with an average grade of
Process plant layout and and acid cracking plant
metallurgical flowsheet
22 International Mining | APRIL 2012
Combined
TREO
('000 t)
532
415
PROJECT FOCUS
the Indicated Mineral Resources of 3.1% TREO
and an average grade of the Inferred Mineral
Resources of 2.9% TREO. The PEA mine design
focused only on exploiting the Central Zone, and
where other material grading between the cutoff grade of 1.0% TREO and 2.0% TREO is
removed during mining operations, it will be
stockpiled as potential future plant feed, which
could be used to extend the LoM beyond the
initial 20 years.
The mine design is for a conventional openpit layout with a single entry access ramp. As
the carbonatite to be mined is highly weathered,
excavation will consist of a mix of free digging,
ripping and conventional drill and blasting
methods. Mining will be undertaken by
excavator, with loading of material on ADTs and
haulage via the access ramp to the process
plant. Initial geotechnical studies indicate that
mining will progress from surface from the
southwest of the deposit using bench heights of
6 m, to a final pit depth of between 70 and 90 m
below surface.
The Zandkopsdrift process plant will have a
front-end physical upgrading section, which
includes a crushing and milling section and
beneficiation of a <15μm de-slimed fraction
through a flotation circuit. The flotation
concentrate is recombined with the de-slimed
fraction and fed to the acid leach section. The
acid leach section is supplied with concentrated
sulphuric acid produced on site, which is mixed
with the concentrate feed and baked in a rotary
kiln to decompose the rare earth minerals. The
roasted concentrate is water leached and the
REEs are precipitated as a 99% pure mixed rare
earth carbonate. Thorium, uranium, iron and
other contaminants are removed by
precipitation and disposed of to a lined tailings
disposal facility.
The mixed rare earth carbonate will be
transported by road to the Saldanha separation
plant where it will be dissolved in hydrochloric
24 International Mining | APRIL
Capital Expenditure
Construction Capital Expenditure
Mining & Concentrator Plant
Mining equipment, surface infrastructure and pre-production costs
Concentrator plant
Other infrastructure
Tailings disposal facility
District roads upgrade
Rehabilitation and closure
$ million
3
132
41
17
4
2
Desalination plant and pipeline
Total mine and concentrator plant Capex
13
$212 million
SALDANHA SEPARATION PLANT
Land and services
Separation plant
Other infrastructure
Evaporation ponds
Total separation plant Capex
3
498
108
2
$611 million
Total mine, concentrator plant and separation plant Capex
Sulphuric acid plant
Total construction Capex
$823 million
$88 million
$910 million
Start- up / indirect costs
First fills
Spares
Skills and local economic development programmes
Total start-up costs
acid into an aqueous solution. The resultant
solution will undergo a complex multi-stage SX
and stripping process to produce separated
saleable REOs at purities of between 99% and
99.999%.
There will be two SX modules, each with a
capacity of 10,000 t/y. Each module is divided
into 14 SX circuits to separate the mixed REE
chloride bearing solution into the desired
products. Each circuit consists of four process
steps, namely; loading, extraction, washing and
stripping and the number of stages for each
step for each of the extraction circuits varies
according to the feed
composition and required
product purities.
Five of the HREOs, namely
holmium, erbium, thulium,
ytterbium and lutetium, will
be co-precipitated as a mixed
REO concentrate and
stockpiled for potential future
processing, sale or disposal.
No revenue was assumed from
the production of these five
REOs for the purposes of the
PEA due to their current
limited demand.
Metallurgical
Power for the mine will be
flowsheet of the supplied by co-generation
Saldanha
separation plant from the steam produced in
9
17
1
$27 million
the sulphuric acid plant. While the possibility
exists that a significant portion of mine water
needs can be supplied from local groundwater
sources (to be investigated for the prefeasibility
study), for the PEA it was assumed that the total
water requirements will be supplied by pipeline
from a desalination plant to be located
southwest of Zandkopsdrift on the coast.
Power for the Saldanha separation plant will
be supplied by Eskom, the South African
national power authority, and water will be
supplied by the local municipality.
What’s it all about?
Rare earths is a term, and rather a misnomer,
commonly used to describe the 15 chemically
similar, lanthanide elements which appear
together towards the bottom of the Periodic
Table. Two other elements, yttrium and
scandium, with similar chemical properties, are
often also referred to as rare earths. Although
they are relatively common in the earth’s crust,
they often do not occur in high enough
concentrations to make their extraction
economic. Or, they occur along with high levels
of radioactive elements and attendant problems.
The oxides that are produced from processing
the rare earth elements constitute the basic
material that can be sold to the market or
further processed into metals or alloys.
Rare earths can be divided into those that are
PROJECT FOCUS
‘light’ and those that are ‘heavy’ and both are
present to varying degrees in all rare earth
deposits. Heavy REs hold the electrons closer to
the nucleus than light REs and hence are
denser. Rare earths are therefore recovered and
processed together before sequential separation
into individual rare earth elements. Prices for
individual rare earths in pure oxide form can
vary significantly with, generally speaking, the
heavy rare earths trading at higher values.
Rare earths possess certain chemical and
physical properties which when synthesized
make them indispensable in many high-tech
applications. Frontier Rare Earths says “they are
widely recognised as being among the most
valuable and strategically important minerals for
the continued development of a modern
technological society.” Among their key
properties are high thermal and electrical
conductivity, magnetism, luminosity, catalytic
and optical properties. “In several industrial
sectors, traditional materials are approaching
their technological limits and product
development engineers are increasingly turning
to new materials, such as rare earths, to
maintain the current pace of high-tech
advancement within increasingly stringent
environmental and energy efficiency guidelines.
“Compact fluorescent light bulbs, which
require europium, terbium and yttrium, use up
to 75% less energy than traditional
incandescent light bulbs. With 20% of global
electricity used for lighting, there is huge scope
for increasing efficiency.
“A further 45% of global electricity is used in
electrically driven motors. There are significant
opportunities for increased efficiency in, for
example, motors in fridges, air conditioners and
washing machines by using more efficient
motors. The most efficient motors require
neodymium and praseodymium coupled with
small amounts of dysprosium and terbium. They
are used in compact neodymium permanent
magnets, sometimes called ‘neo magnets’,
which are used in ‘brushless permanent magnet
motors’. The advantages of brushless motors
are longer life spans, little maintenance, smaller
sizes and higher efficiency. Legislation
mandating improvements in the efficiency of
white goods is driving manufacturers to use
more efficient motors which contain rare earths
and further drives demand.
“Rare earth metals are used in almost all
hybrid and electric vehicles.
“Just as [they] are essential for saving energy,
they are also increasingly required for producing
green energy. Most new wind turbine designs
use neo magnets because they are lighter, more
efficient, and easier to maintain than the
traditional generators used in wind turbines.”
Lanthanum is a key component in batteries
for hybrid vehicles, computers and electronic
devices. It is used in hydrogen fuel storage cells,
special optical glasses, electronic vacuums,
carbon lighting applications, as doping agents
in camera and telescope lenses, and in polishing
glass and gemstones. It also has major
applications in petroleum cracking and as an
alloy for many different metals.
Cerium oxide is widely used to polish glass
surfaces. Other cerium compounds are used to
manufacture glass and enamels both as
ingredients and colour removal agents. Cerium
is a component in solar panels, LEDs, catalytic
converters, thermal resistance alloys, carbon arc
Operating Costs
Mining
Concentrator Plant (including sulphuric acid plant)
Tailings disposal facility
Rehab and closure (operational)
Rehab and closure (insurance)
Road maintenance
Transport
Separation Plant
$/t ROM
$16.58
$98.03
$0.24
$0.23
$0.01
$0.27
$1.33
$136.04
$/kg REO
$0.86
$5.06
$0.01
$0.01
$0.00
$0.01
$0.07
$7.03
Administration costs
TOTAL
$0.66
$253.39
$0.03
$13.08
26 International Mining | APRIL 2012
lighting, self-cleaning ovens, petroleum refining,
hardening agents and dental ceramics.
Praseodymium is used as an alloying agent
with magnesium for high-strength metal
applications in aircraft engines. It is also used in
super magnets, catalytic converters, UV
protective glasses, carbon arc lights and CAT
scan scintillators. The element is additionally
used as a doping agent in fibre optic cables and
in several metal alloys.
Neodymium is essential in the production of
the world‘s strongest super magnets, which are
present in hybrid cars, state-of-the-art wind and
tidal turbines, industrial motors, air
conditioners, elevators, microphones,
loudspeakers, computer hard drives, in-ear
headphones and guitar pick-ups. When
combined with dysprosium (or terbium) a
neodymium magnet can withstand high
temperatures, allowing the element to be used
in electric cars. Neodymium has many additional
uses. It is used in incandescent light bulbs,
cathode ray tubes, as a glass filter and
colourant, as a doping agent in yttriumaluminium-garnet lasers and for glare-reduction
in rear-view mirrors.
Samarium-cobalt alloys are used to make
permanent magnets that are extremely difficult
to demagnetise and work at high temperatures.
Samarium-cobalt magnets have been used by
the US defence industry since the 1970s. They
also have additional applications in the music
industry but are primarily used as precise
pickups. The element can be found in many
other compounds used for such products as
neodymium-yttrium-aluminium garnet laser
glass and infrared absorption glass, capacitors
for microwave frequencies, as well as in the
cancer drug Quadramet.
Europium is used as a phosphor in all TVs and
computer screens to create red and blue light,
and when combined with green terbium
phosphors, trichromatic fluorescent lighting is
created. Europium isotopes are the best known
PROJECT FOCUS
Uses of rare earths
neutron absorbers and therefore the element is
ideal for control rods in nuclear reactors. The
element is also used in fluorescent light bulbs,
alloys, as an agent in fluorescent glass and to
dope plastic and glass to make lasers.
Gadolinium when added to chromium, iron or
related alloys, greatly improves workability and
raises resistance to high temperature
oxidisation. It is also used in microwave
applications, CDs, computer memory devices,
MRI image enhancing, neutron radiography and
for making phosphors in TV tubes. One final use
of gadolinium comes in nuclear reactors as an
emergency shut-down mechanism.
Terbium is used in colour TV tubes and
fluorescent lamps as a green phosphor. In
combination with europium blue and red
phosphors the three create trichromatic
fluorescent lighting, which is much brighter than
conventional fluorescent lighting. Another green
application for terbium can be found in
combination with neodymium in the production
of super magnets. The element is also used in
alloys, crystal stabilisers in fuel cells that
operate at high temperatures, specialty lasers
and to dope calcium fluoride, sodium borate and
strontium molybdate materials. Terbium is a
component of Terfenol-D, a material that is used
in transducers, high-precision liquid fuel
injectors and in a new form of audio equipment
that has the potential to revolutionise the
speaker industry.
Dysprosium’s thermal neutron absorption
cross-section and high melting point enables it
to be used in nuclear control applications. The
element can be added to neodymium-iron-boron
magnets to raise the strength and corrosion
resistance of applications like drive motors for
hybrid electric vehicles. Like terbium,
dysprosium is a component of Terfenol-D. It is
also used in CDs, chemical reaction testing,
laser materials and dosimeters.
Holmium has one of the highest known
magnetic moments (force and torque on electric
currents). The element is imperative in the
28 International Mining | APRIL 2012
creation of the strongest, artificially generated
magnetic fields. Holmium is also used in nuclear
control rods, solid-state lasers in eye-safe medical
and dental microwave equipment, as a yellow
and red glass and a cubic zirconia colorant.
Erbium is used in neutron-absorbing control
rods, creating lasers for cutting and welding and
as a doping agent for optical fibres. As an alloy
additive, erbium lowers the hardness and improves
the workability of numerous metals. In oxide
form, it is used as a pink colorant in glass and
porcelain enamel glazes and it is often used in
photographic filters.
Thulium is the second rarest element after
promethium and does not occur naturally in the
earth’s crust. Because of its scarcity and high
price, there are few widely-used thulium
applications. Its current uses are mainly scientific
experimentation and in portable x-ray devices
use for areas where electric power is not available.
Ytterbium is used in solar cells, optical
glasses, crystals and ceramics. It can be used as
a doping material for high power solid-state
lasers and as an alloy that helps to strengthen
Distribution of rare
earths at Zandkopsdrift
stainless steel. Like thulium, ytterbium is
employed in portable x-ray machines where
electricity is not available.
Lutetium is mainly used as a catalyst in
refining petroleum, hydrogenation and
polymerisation processes, and in organic LEDs.
Lutetium is currently being investigated as an
agent for possible cancer treatments. It is also
used in x-ray phosphors and computer memory
devices.
Yttrium is most widely used in phosphors for
white and grey colours in LEDs and in trichromatic fluorescent lighting. Yttrium is
regularly alloyed with chromium, molybdenum,
zirconium, titanium, aluminium and magnesium.
It is used as a deoxidiser for vanadium and other
nonferrous metals and as a catalyst in the
polymerisation of ethylene. It has medical
applications in cancer treatment, arthritis and
joint inflammation, artificial joints, prosthetic
devices and needles. The element can also be
found in optical and camera lenses, cubic
zirconia jewellery, super conductor materials,
high performance spark plugs, yttriumstabilized zirconia, solid electrolytes, exhaust
systems, catalytic converters, turbocharger
components and piston rings.
The main application of scandium by weight is
in aluminium-scandium alloys for minor aerospace
industry components. These alloys contain between
0.1% and 0.5% of scandium. Some items of sports
equipment, which rely on high performance
materials, have been made with scandiumaluminium alloys, including baseball bats and
bicycle frames. Lacrosse sticks are made with
scandium-titanium alloys to take advantage of the
strength of titanium. Smith & Wesson produces
revolvers with frames composed of scandium alloy
and cylinders of titanium. Scandium is also used
to make high-intensity discharge lamps. IM