Renowned Australian explorer and miner, Greenland Minerals Limited (ASX: GGG) has been operating in the world's largest island- Greenland, which is rich in mineral and energy resources. The primary focus of the Company is the development of the Kvanefjeld rare earth project, rich in the unique rare earth and uranium-bearing minerals.
The Project is centred on the globally unique northern Ilimaussaq Intrusive Complex, where over 1 billion tonnes of mineral resources have been delineated across different zones. Kvanefjeld has year-round direct shipping access, nearby airport, and a mild climate, making it an optimal location.
Kvanefjeld is regarded as a step change in global rare earth supply, recognised for the only known bulk occurrence of steenstrupine globally – a unique, non- refractory rare earth mineral, that is conducive to simple, low- cost processing.
Let us analyse the elements that have together paved the way for the Kvanefjeld Project to be a future cornerstone to global rare earth supply:
GGG Eyeing to be a Globally Significant and Integrated Producer of Critical Minerals
The Company firmly believes that when developed, the Kvanefjeld Project will be a large-scale, low-cost, long term supplier of products, that will eventually unfold the revolution in the efficient use of energy.
Why Rare Earths?
Amid urbanization, automation, competition, climate change, digitization and connectivity, rare earths are often referred to as the clean energy future. The increasing demand for rare earths is associated with important global agenda s- topmost being the electrification movement, which is underway. Rare earth permanent magnets create electric motors with greater torque, efficiency and range.
Economies like the UK, France and India intend to have all-electric fleet cars by 2040. The Government-led plans will propel more than half of the demand growth to 2025, indicating a strong macro outlook and demand for rare earth.
Besides EV’s, rare earths find their significance in batteries, magnets, high-tech devices, chemicals and oil refining processes, healthcare and aerospace. The outlook for the rare earth sector continues to strengthen, creating an optimal window for the establishment of new internationally focused, integrated rare earth supply networks.
Kvanefjeld is ideally placed to play a key role in future rare earth supply, as it has an exposure to Nd, Pr, Dy and Tb, making it a complete rare earth project.
Solid Optimised Feasibility Outcomes at Kvanefjeld
In the past two years, GGG has been conducting optimization studies of the Project, aiming at the metallurgical performance, engineering and civil design. Following outcomes of these studies were concluded during Q2 FY2019:
- Capital cost decreased by 40% to US$505 million;
- Lowered power requirements and reagent consumption.
- Operating costs decreased by 40%, stemming in unit costs of less than US$4/kg of REO;
- Even with more production of rare earths, the Project has a smaller footprint and lower impacts;
Strong support of Shenghe Resources
GGG’s largest shareholder, Shenghe Resources Holding Co Ltd is a Chinese Company and one of the largest RE producers globally. Shenghe is involved at all levels of the rare earth industry, from mining through processing to the production of end products and holds Chinese production quotas for the mining and separation/refining of rare earths.
Shenghe has helped GGG in conducting the optimisation studies of the Kvanefjeld Project and guided the Company with its experience and expertise in rare earth processing, which has significantly reduced the scale of the refinery circuit resulting in substantial cost reductions.
In the September 2019 quarter, geologists from Shenghe and IMUMR visited the Project site to follow up on previous (three years) field-based studies. This visit provided the opportunity to walk through the outcomes of the optimised civil engineering strategy that concluded late in 2018, and to discuss the status of environmental studies in consideration of the proposed project layout.
Positive Regulatory and Environmental Approvals
GGG recently met a major milestone in the environmental approval process pertaining to the Environmental Impact Assessment (EIA) wherein Greenland’s EAMRA and the DCE have provided a structured approach to assist in finalising outstanding issues, separating the outstanding environmental issues into two categories- Type 1 and 2. For Type 1 issues, more information is required before accepting the EIA and Type 2 can be answered after the process of formal public consultation has been completed.
GGG has been instrumental in preparing social and environmental impact assessments for public consultation, and the subsequent production and approval of a white paper.
In 2019, a lot of progress was made on finalising the Project’s mining license application for public consultation, with the Maritime Safety Study and the Social Impact Assessments been agreed for public consultation.
Further meetings remain in the pipeline with EAMRA and the DCE to finalise the EIA on time.
Vital Community Involvement
In March 2019, GGG signed an MoU with Kommune Kujalleq and Kujalleq Business Council at the PDAC Conference in Toronto. The intent was to conclude a Participation Agreement supporting and supplementing the Impact Benefit Agreement, an integral element of a successful mining licence application for the Project.
The three parties agreed to a timeframe and a process for negotiating the Agreement covering community capacity development- identification and skills, sharing knowledge about local culture and land use practices and development of area’s local businesses and workforce.
In October 2019, meetings were held with the Mayor of Southern Greenland Kista Isaken and Deputy Mayor Carsten Hansen as well as the business community.
GGG expects the December quarter to mark a productive close to 2019:
- Additional work programs that will address Type 1 EIA issues areas to be implemented;
- Several teleconference/meetings with EAMRA are being scheduled;
- GGG aims to continue an engagement program with European industry to explore off-take and participation opportunities;
- Meetings are being planned with Shenghe in Copenhagen;
- Discussions continue with Shenghe for advancing the downstream processing strategy.
GGG last traded at $0.100 on 22 November 2019. The stock has provided a decent YTD return of ~47%.
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