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Next year will be a milestone year for Africa’s mining industry as the continent’s first rare earths elements project is targeted to come on stream, Dr Tony Harwood, president and CEO of Montero Mining & Exploration, tells Laura Cornish.

The dynamics of the rare earths elements (REE) sector is changing as the world’s dominant producer and supplier – China – exports less and conserves more of its own production for its own use.

The result is a significant surge of REE development companies seeking alternative deposits and independence from the single-source REE country.

TSX-V listed REE explorer and developer Montero Mining & Exploration (Montero) is not only aspiring to add its name to a fairly short list of REE producers, but intends to become the first REE mining production company in Africa.

Wigu Hill Phase 1

The company’s 70%-held Wigu Hill prospect in Tanzania has proven to contain a variety of light rare earth oxides (LREOs) at unusually high grades, with values of up to 27.25% total REOs (TREO) from initial grab sampling and up to 16.68% TREO from drilling.

Its REEs include cerium, lanthanum, praseodymium, neodymium as well as minor amounts of heavy REE oxides (HREOs).

The prospect was first identified in the 1950s and has recently been defined as a large carbonatite complex (6.4 x 3.2 km), which has been intruded by REE-rich bastnaesite mineralisation in numerous dike swarms across the complex.

It is 170 km from the Dar es Salaam seaport and 12 km from a railsiding on the Tazara railway.

“Unlike typical REE monazite deposits, bastnaesite contains almost no radioactive thorium or uranium, which remains one of the greatest development and disposal challenges for REE project developers,” explains Harwood.

Since Montero’s establishment in 2007 and its initial public offering in February 2011 on the Toronto Venture Exchange (TSX-V) with the symbol MON, the company has announced an 43-101 compliant resource of 3.3 Mt with an average grade of 2.6% LREO, including a 510 000 t portion averaging 4.4% LREOs based on only 2224 m of shallow drilling on the hill’s eastern ridge at the Twiga and Tembo zones.

The detailed exploration undertaken to date has covered less than a third of the anomalous area of rare earth interest. Drilling and trenching has identified an extensive zone of carbonatite-hosted bastnaesite-rich mineralisation. The upside potential is still open ended and the exploration focus will be the mineralised carbonatite zones identified here and their continuation to the north and west.

And the ultimate success is already evident: Wigu Hill falls neatly in line with the company’s vision to emerge as a low-cost producer. As the project’s name suggests, the prospect is literally a hill, lending itself to economical opencast mining. It is also highly mineralised, is course in texture and is unweathered.

“While this is more than sufficient for us to reach an initial production start-up in 2013, building up to about 5 000 tpa of mixed REEs, our intention is to drill and define a substantially larger resource by the end of this year. The target this year is 10 Mt at an average grade of 5% TREOs,” Harwood continues.

The drilling plan:

  • Drilling to define inferred resource: 2 224 m (21 holes) – completed
  • Twiga infill drilling: 895 m (17 holes) – completed
  • Drilling at Tumbili and Nyati targets: 2 555 m (11 holes) – completed
  • 5 000 m drilling programme for Nyati target – targeted to be completed in 2012. The latest results include 2.24% TREO over 112.4 m (including 3.92% TREO over 14 m and 3.65% TREO over 16 m), 3.04% TREO over 42 m (including 3.8% TREO over 20 m) and 3.11% TREO over 44 m (including 4.31% TREO over 14 m). These latest positive trench results continue to confirm the extent of the mineralisation on the Lower Nyati Target. They substantiate the high-grade TREO values returned from the grab and panel sampling programme, and from the initial trenching and drilling results.
The company has also commenced with an environmental impact assessment (EIA), environmental and social impact assessment (ESIA) and the grant of an extension to the prospecting license for the project area. The EIA and ESIA are crucial steps in obtaining the environmental permit, required for the mining licence application and any mining operation at Wigu Hill.

Montero has engaged MTL Consulting, a Tanzanian company with skilled professionals in mining and environmental areas with local and international experience, to carry out the necessary studies. The scoping study and terms of reference examining the biophysical environment and socioeconomic environment of the project have been approved by the Tanzania’s National Environment Management Council, and the EIA and ESIA at Wigu Hill are under way.

Processing and refining

Montero will not only mine the Wigu Hill prospect, but process the material in two separate phases.

“2013 will not only see our production start-up, but also the completion of a process plant, which will deliver a bastnaesite concentrate.”

In March this year, the company signed a non-binding memorandum of understanding (MOU) with Star Earth Minerals, a rare earth chemical company based in Mumbai, India. Star is seeking to secure a consistent supply of LREOs from Wigu Hill (of between 1 000 and 3 000 tpa of mixed REEs and cerium) in order to supply its customers in the glass, ceramic and catalyst industries.

The main objective of the MOU is to outline the basis of cooperation between Star and Montero with the objective of signing an off-take agreement for Star to purchase mixed rare earth and cerium carbonate from Montero. It also contemplates sharing technical information related to rare earth process technology for the development of a rare earth refinery to further beneficiate material from Wigu Hill. Through hydrometallurgical testwork with Mintek, Montero has already produced samples of saleable rare earths that were instrumental in concluding discussions with Star.

“The signing of an MOU off-take agreement is the first step in de-risking Wigu Hill, while securing end-user distribution channels ultimately designed to generate REE sales revenue for Montero. Star is a producer of rare earth chemicals to the Asian market, with considerable expertise in rare earth refining, which also complements our fast-track to market strategy,” Harwood outlines.

The ultimate mid-term aim, Harwood continues, is to build a full-scale REE refinery capable of delivering an initial 5 000 tpa and ultimately 20 000 tpa of individual rare earth elements.

Refining will occur as a two-stage process; the first stage involves taking the bastnaesite concentrate, leaching and precipitating it to produce mixed REE material.

The second phase, which still requires numerous testwork stages with Mintek, will look to separate the REEs into the individual elements (Ce, La, Pr, Nd and mixed heavy REOs).

“Building a refinery of this scale is a massive financial and construction undertaking, and we have already embarked on a scoping study aimed at determining the best location, which includes South Africa. The source of funding and our strategic partners will largely determine its ultimate location,” Harwood notes.

Wigu Hill Phase 2

Reaching its 10 Mt target resource is just the beginning of Wigu Hill’s near-term prospect. Phase 2 is expected to grow this resource to 40 Mt.

“With a project of this size and quality, we are very similar to the Mountain Pass REE project, owned by NYSE-listed Molycorp,” says Harwood.

MolyCorp is in the process of developing a 19.6 Mt resource bastnaesite REE project in California, which is forecast to produce 40 000 tpa of separate element REEs at nameplate capacity, with a grade of around 9%.

“With a 40 Mt resource, we could ramp up our annual production to 20 000 tpa, which we expect to achieve in 2015/16.”

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