Miners of critical minerals soar as government loans pour in

“At a time when global demand for smartphones, electric vehicles and other technologies is soaring, this commitment (…) strongly positions Australia for the future in the critical minerals sector,” said Trade, Tourism and Investment Minister Dan Tehan.

“An incredible opportunity for rare earths”

Hastings Technology Metals chairman Charles Lew said the NAIF commitment would allow the company to finalize financing for Yangibana and move into full-scale construction throughout 2022 ahead of first production by 2024. The company needs a total debt of 300 to 400 million dollars to finance the project. , which includes a mine and plant in Yangibana and a hydro-metallurgical plant near Onslow on the coast, with a final investment decision expected in the “coming months”.

“Yangibana is a tremendous rare earth opportunity that will provide the world’s highest composition neodymium and praseodymium concentrate to leading customers in Europe and Asia,” Mr. Lew said.

Canaccord Genuity analyst Reg Spencer said the $140 million 12.5-year loan was bigger than expected and followed the company securing tentative support from agencies export credit in Germany and Finland, and commercial banks.

“We assume project capital costs of $590 million…compared to [the company’s] before $449 million plus a contingency estimate of 15% in July 2020,” he said, noting that the company also held $96 million in cash as of December.

“Our assumption reflects current industry inflationary pressures, with finalization of project capital expenditures (and an updated economic assessment of the project) expected next month.”

According to the company, the Yangibana project will meet around 6-8% of global demand for neodymium and praseodymium, rare-earth minerals used to make permanent magnets, and will benefit from the global boom in electric vehicles and the decarbonization of the world. energy sector. .

These rare earths, known as NdPr, account for about a third of global rare earth demand by volume, but more than 80% by value at spot prices, as the market remains short amid strong demand for vehicles electric, according to Macquarie analysts.

Even after China, the world’s largest supplier of rare earths, this week unveiled higher-than-expected rare earth production quotas for 2022 – raising mining and refining quotas by 20% to 100.8 kilotonnes. and 97.2 kilotons, respectively – analysts said demand will continue to dwarf supply.

“The calendar year 2022 rare earth quota was higher than expected, but we still believe the NdPr market remains in deficit despite increased supply,” the analysts said.

On Monday, Lynas said it had obtained “Ministerial Declaration” for its Kalgoorlie rare earths processing facility under WA’s Environmental Protection Act, with construction and operating conditions in line with proposed the society. However, further approvals are still required.

The NAIF, which has committed $3.2 billion to projects in northern Australia, says the Yangibana project will create up to 750 jobs and more than $1.25 billion in ‘public good’ .

“This project will help meet growing global demand for critical minerals, supporting Australia’s position as the world’s largest producer,” said Agriculture and North Australia Minister David Littleproud.

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