We speak to Peak Resources’ Managing Director Darren Townsend regarding the company’s development of the Ngualla Project in Tanzania...
Since listing onto the Australian stock exchange back in 2006, Peak Resources Ltd has come a long way. Whilst exploring for phosphate minerals in East Africa, the company discovered rare earth minerals, creating a significant buzz across the mining industry that led to the establishment of its flagship Ngualla Project. Managing Director Darren Townsend explains how the company has taken the project, located in southern Tanzania, from discovery, all the way through to the recent completion of a Bank Feasibility Study. “We found that there were very high grades of the magnet metal rare earths, neodymium (Nd) and praseodymium (Pr), called NdPr. There are seventeen different rare earth elements, but NdPr are the most important,” he says.
Quickly becoming one of the world’s largest undeveloped neodymium and praseodymium rare earth projects, the company has received its environmental permit for the project and is now moving ahead with the submission of the mining license application. With plans to export approximately 28,000 tonnes of rare earth concentrate throughout a 30-year mine life, the company will undertake the initial processing in Tanzania, through an on-site multi-stage processing plant. “The high grade processed rare earth concentrate will then be shipped to the United Kingdom to a refinery that will use solvent extraction technologies to complete further processing,” says Townsend.
He adds further, “I don’t like to use the term ‘world-class’, but Ngualla simply is a world class deposit. It’s extremely high grade and our aim is to get this project up and into production, whilst looking at additional opportunities to grow the company and build out the business further within the rare earths space. We see the development of Ngualla as a starting position for us.”
Whilst prices in cobalt have recently surged up by 150 percent, the demand for other metals including rare earths will ultimately also increase due to the same transforming driver – the electrification of the automotive industry. Rare earths are used to make high-strength magnets, which are 10 times stronger than traditional iron boron magnets. Such advantages enable this technology to be utilised in a number of applications. Townsend explains that with 90 percent of drive motors for the new models of electric and hybrid cars using rare earth magnets, this energy efficient alternative transportation system is brought to the forefront of building and design.
“The world hasn’t yet worked out that we need rare earths in the same way as everybody’s been talking about lithium, graphite and cobalt. If you want to get the energy from your lithium battery to the road, 90 percent of the time you’re going to be using a rare earth magnet drive motor,” comments Townsend. Investors have not yet cottoned on to this potential investment opportunity, where NdPr will drive significant growth for companies and investors through the rise of electric vehicles. With this in mind, Townsend adds that “if we had 100 percent electric vehicles within global production, we would need to mine seven times the amount of rare earths as we do today.”
“We will start to see a larger share of electric vehicles coming into the market, which will have a big impact over time on the supply side and quality. Projects like ours are going to be very important to keep up with this expected demand growth.”
Peak Resources is developing Ngualla in partnership with two key strategic and high quality investors; International Finance Corporation (IFC) and Appian Natural Resources Fund, a private equity group based in London. Nonetheless, raising funding is not without its challenges. “When you’re a junior developer, you need to raise funds from the stock market to move the project forward,” explains Townsend. “There are times when rare earth prices are quite low, which makes raising equity a little bit more challenging. However, we’re really lucky in having Appian and IFC as partners to help us with that funding.”
Giving back to the community
Throughout the 30-year project, the Ngualla Project in Tanzania will directly employ an estimated 209 people, predominantly from the local area, and the company will also undertake a significant amount of community projects, as well be an enabler of sustainable development activity that will provide economic and employment opportunities beyond the mining project. Over the next 30 years, the company will no doubt have a major role in making a positive long-term contribution to the local community. Additionally, Peak Resources aim to become a clean, ethical, sustainable source of rare earths to global industry. All processes will operate at top tier environmental standards, which will match well and feed into the supply chains of the products low carbon technological applications.
“The project involves quite small scale, open cut mining,” adds Townsend. “With less than a two to one waste to ore strip ratio, it has quite a small mining footprint.” The processing will also be completed without the use of chemicals such as cyanide, and the naturally very low level of radionuclides in the deposit avoids any issues some projects have with their high contents of uranium or thorium. Peak Resources’ long-term investment in the local community and its strong environmental focus will support future business growth whilst bringing benefits to the local communities and enable the company to expand their operations and go from strength to strength.