London, 19 Oct (AIM) – Shares in the London-based mining company Altona Rare Earths PLC jumped by almost ten per cent on Wednesday following the publication of its scoping study for its Monte Moambe rare earths project in northwestern Mozambique.
Monte Muambe is an extinct volcano located to the east of Moatize in Tete province.
In a statement to the London Stock Exchange, the company says that the results “provide an encouraging initial validation of the Project’s potential”.
The scoping study finds that the project has a post-tax net present value (NPV) of 283.3 million US dollars and has a post-tax internal rate of return of 25 per cent.
The study estimates that the payback from the beginning of production will be just 2.5 years. This is based on a production of 15,000 tonnes of mixed rare earth carbonate per year at an average price of 13,558 US dollars per tonne.
The review of the mine found that it is expected to have a life of 18 years using open-pit mining. The minerals will be recovered using a two-stage process, consisting of comminution (mechanically grinding up the material) and flotation, followed by hydrometallurgy (extracting the metals from the ore using aqueous solutions). The metal will then be packaged and transported by road to the port of Beira.
As a result of the scoping study, the company believes that Monte Muambe has the potential to become a viable mining operation.
This study will now be further developed into a pre-feasibility study looking at the resource base, extraction rate, processing methods, energy sources, and logistics options.
The publication of the scoping study is a key milestone which entitles Altona to an additional 31 per cent ownership of Monte Muambe Mining Limitada, taking its total holding to 51 per cent. Once the pre-feasibility study is completed Altona will be able to increase its holding to 70 per cent.
The publication also marks the beginning of the next phase during which Altona will apply for a mining concession. Currently, Monte Muambe Mining Limitada holds the rights to prospecting licence 7573L which covers the project area.
Altona’s chief executive, Cedric Simonet, comments that ‘for Altona, the Monte Muambe Scoping Study is a significant milestone. This key deliverable serves as an affirmative initial validation of the project’s economic viability, enabling the company to establish its presence amongst other prospective REE producers in Africa. It provides, together with the mineral resource estimate (MRE), a solid foundation for the project’s subsequent progression”.
He argues that this is a timely development as “the global rare earths supply chain is diversifying away from China’s decades-long domination, and Western processing facilities are starting to come online”, adding that “the magnet metals present at Monte Muambe are critical components of the global green energy transition. The supply deficit for Neodymium and Praseodymium Oxide is forecast to grow to 90,000 tonnes per year by 2040 and, to allow the decarbonisation of energy sources, more magnet metals mines must come on stream in the following years”.
Simonet concludes that “Altona intends to play its part in supporting this crucial agenda, by working in a responsible manner to reduce the dependence on China for critical mineral supplies”.
Rare Earth Elements are a group of seventeen metals that are used in a wide array of products including electric vehicles, wind turbines, mobile phone and laptop screens, alloys, ceramics, and weapon systems.
Seventy per cent of the world’s production of Rare Earth Elements comes from China, which has an even tighter grip on the minerals’ processing. For some Western strategists, this dominance in the supply chain is seen as a threat.
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