Annual demand for rare earths doubled in the 15 years to 2021, reaching 125,000 tonnes per year, with future rare earths growth tipped to be exponential.
Rare earth elements (REEs) are proving critical in improving the motor efficiency of electric vehicles (EVs), while the commodity group also has a home in many other industries such as wind energy, medical and military sectors.
The EV industry will be the key driver of REE demand moving forward, however, will there be enough supply to satisfy growing appetites?
If Arafura Resources’ Nolans neodymium-praseodymium (NdPr) project comes online in 2024, part of the predicament will be resolved.
However, more supply will be required to avoid supply deficit.
“All the marketing information that’s out there, all the independent analysis states that by next year, China is going to be a net importer of material,” Arafura managing director and chief executive officer Gavin Lockyer told Australian Resources & Investment.
“And by 2025, the world is facing a deficit of material. So the world needs more projects, just generally, whether they be Australian or non-Australian.”
Arafura is aiming for a final investment decision (FID) in the second half of 2022 en route to its first production target in late 2024.
Lockyer said despite looming deficit concerns, Australia is in a great position to plug the gap in future REE supply.
“I think we’ve got some really good quality deposits here in Australia,” he said. “Lynas (Rare Earths) paved the way a little bit when they got up and running; hopefully, we can pave the way and make it a lot easier for the next generation of projects coming through.
“We can have a fantastic downstream industry here in Australia that’s not just mining and digging it up and shipping it out.
“This is advanced technology. And this could really set up Australia as Australia more generically transitions away from coal and those types of activities.
“It could really put Australia on the map as being a real key player in the renewables sector.”
Speaking of establishing downstream capability, Arafura received $30 million in grant funding under the Federal Government’s Modern Manufacturing Initiative (MMI), which will contribute to the construction of a $90.8-million rare earth separation plant at Nolans.
Nolans stands apart in that everything is contained at one site – from mining to mineral processing and beyond.
“We’re planning to do everything at one site, which is unique in itself. We’re going from a mine all the way through the mineral processing to an oxide,” Lockyer said.
“We think that by doing everything at one site, it enables us to have a line of sight for our customers who want to understand their supply chain.
“But it also gives them line of sight for their ESG (environmental, social and governance) requirements, such that they know the waste from the mine is being managed responsibly.”