Rare earths may not be illustrious minerals in the Australian mining industry yet the essential commodities have quietly attracted the attention of a couple of renowned Australian mining names of late.
Rare earths may not be illustrious minerals in the Australian mining industry yet the essential commodities have quietly attracted the attention of a couple of renowned Australian mining names of late.
A group of metals with unpronounceable names, rare earths are used in modern appliances such as mobile phones, fuel cell technology, catalytic converters and lightweight motors.
Sydney-based Lynas Corporation is developing the Mt Weld rare earths project near Laverton in Western Australia.
Although discovered in 1988 and drilled extensively, recent metallurgical developments have allowed Lynas to revisit the project.
It has spent about $17 million developing the project and the announcement of a feasibility study is understood to be imminent.
Despite this, commercialisation of the project was given a significant boost last year when well known industry players Peter “Talky” Newton, Peter Cook and Mark Okeby joined Lynas.
The three have a strong track record in building successful mines in Australia and the partnership between Mr Newton and Mr Cook is known as one of the more successful in Australian mining.
Between 2002 and 2003 they sold gold plays; Hill 50 gold and Abelle Mining to South African major Harmony for considerable profits and then last year the three returned to bourse to get away a flying float in Bluestone Tin.
Mr Newton, a former stockbroker, and Mr Okeby, a solicitor, joined Lyans as non-executive directors in November. They replaced executive chairman Brian Davidson, who retired, and executive director Wang Ou, who remains with Lynas as president of its China operations.
Mr Cook has not taken a board position but is a significant shareholder.
According to Lynas’s 2004 annual report, Mr Cook is listed as a top 20 shareholder, controlling 1.6 million shares or 0.7 per cent in the company, worth about $500,000.
Lynas Corporation executive chairman Nick Curtis said he was delighted by their support.
“They bring significant depth and understanding about the mining industry and previous track records,” Mr Curtis said.
Despite their profiles, Lynas’s share price dropped from almost 40 cents to about 28 cents, where it has hovered around since the appointments.
Mr Curtis said because rare earths were an unknown concept in Australia, investors were unaware of the company’s significant position at the Mt Weld deposit – the world’s richest rare earth deposit.
Although Australia has large reserves of rare earths, with most production coming from mineral sands mines, rare earths are produced mostly in China.
Mr Curtis said Mt Weld was targeting production of 10,000 tonnes per year at a 15.5 per cent head grade on mined material for 14 years. Total world production of rare earths is about 85,000 tonnes per year.
According to Lynas’s website, the rare earths market, in both volumes and prices, has recovered significantly and the company expects demand to have grown by around 5.5 per cent from 2003 to 103,000 tonnes per year.
Lynas is being sued by Canadian-based rare earth supplier AMR Technologies for allegedly breaching the Ontario Securities Act concerning the company’s 19.8 per cent stake in AMR.
It was also criticised by the state Liberal party for plans to send its ore to China for downstream processing rather than processing the ore in WA.
