The future of rare earth mine project development (Australian Resources & Investment)
- By: John P Sykes
Posted in: Blog, Commodities, Mining, Publications, Recommended
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In this month’s edition of Australian Resources and Investment magazine there is an article I have written on ‘The future of rare earth mine project development’ based on my presentation at the Metal Pages Rare Earths Conference earlier in the year.
The article reviews the challenges Australia’s three longest established rare earths projects (Lynas’ Mt Weld, Arafrura Resources’ Nolans and Alkane Resources’ Dubbo) have faced over the last decade, concluding that rare earth mine projects are unusually difficult to develop, and thus rare earths are a ‘concave commodity’. In this case, concave commodities are ones in which share price value accretion does not occur until very late in the development process, once the project is substantially de-risked, unlike convex commodities such as gold and nickel sulphides where early stage value accretion following exciting exploration drill results is common. The result is that to successfully develop a ‘concave commodity’ project it must be converted into a convex project, so that enough money can be raised at early stages to appropriately fund the project. To this end, a number of recommendations are made in the article the most important of which are ‘whole of value chain thinking’ and ‘front end loading’.
The magazine is available in Australian newsagents now.