In business, timing can be everything and ASX listed Northern Minerals knows this only too well.
Whether by good fortune or good timing, Northern Minerals is on the verge of completing the build of Australia’s first heavy rare earths project just as the US declares its desire to secure new supplies of rare earths outside of trade rival China.
In a project update lodged with the ASX this week, the company reported that construction of its 100%-owned Browns Range project in the East Kimberley region was on track for completion by June 30.
The installation of the main cable runs has commenced, piping installation for the beneficiation plant is underway and planning for an early start of the crushing circuit is now well advanced.
The plant will operate at a pilot scale for three years, with the main payable product being dysprosium, a heavy rare earth that is an essential element in the manufacture of permanent magnets.
Permanent magnets are a key component in electric engines that power everything from cars to clean technologies such as wind turbines.
The final stage of Brown Range will be a 10-fold increase in capacity compared to the pilot plant, which would make Browns Range the world’s only significant producer of dysprosium outside of China.
Whilst there is a way to go before that target is reached, Northern Minerals suddenly finds itself in the most favourable of business environments thanks to President Trump’s newly declared plan to break the dependence of the US on China for rare earths and other strategic minerals.
China has a virtual monopoly on the global production of many rare earths that also have critical uses in defence and aerospace.
Trump and Australian Prime Minister Malcolm Turnbull reached an agreement last month to form a US-Australian alliance “to work together on strategic minerals exploration, extraction, processing and research and development of rare earths and high performance metals to sustain the jobs of today and develop the jobs of tomorrow.”
Northern Minerals shares have rallied by 15% since the February inter-governmental announcement and the company can expect to attract much more interest as the new alliance with the US takes shape.
Northern already has plans to do more at Browns Range, with an exploration program underway aimed at increasing reserves to allow a doubling of the life of the full-scale project to more than 20 years. Work is also underway to potentially take the project into downstream processing.
There’s also a sweetener for shareholders in the form of a proposed one-for-five issue of bonus listed options. The options will have an exercise price of 12 cents each and an expiry date of 31 December 2019.
