Pensana Rare Earths plc (ASX:PM8) has committed to studying downstream processing of the high-grade magnet metal concentrate it plans to produce at the Longonjo project in Angola.
The Longonjo project is being developed as one of the only major upstream suppliers of the NdPr magnet metals critical to energy transition, which are required by Electric Vehicle (EV) and Offshore Wind Turbine manufacturers.
The company has previously reported a Preliminary Feasibility Study (PFS) for a sustainable operation producing, on average, 56,000 tonnes per year of NdPr concentrate for export. The initial capital cost of the project was estimated at approximately US$131 million.
Chairman Paul Atherley said that while the company strategy in the PFS was to process onsite and ship a high-grade concentrate, the new study – which will form part of the current Definitive Feasibility Study – will investigate the feasibility of the downstream processing of 50,000 tonnes per annum of concentrate into a high grade NdPr carbonate for export, which could enable the company to capture a substantially increased proportion of the product value in Angola.
Mr Atherley said preliminary discussions with potential customers and major trading houses have indicated that customers in China, Japan, Korea, Germany and the UK may be interested in importing high grade NdPr carbonate from the company.
The new study will review the economics of this and preliminary studies have indicated that this is expected to require an increase in the capital cost of the project from US$131 million to around US$200 million.
The Angolan government’s mining code and fiscal regime, customs exemptions and the easing of foreign exchange controls provides encouragement for additional investment of this nature.
“The IEA recently reported that there is over US$1 trillion being invested by China, Britain and the EU into offshore wind as the main source of renewable energy for these developed economies.
Each offshore wind turbine uses 3-5 tonnes of permanent magnets compared to 1-2 kilograms for an EV. With demand for these permanent magnets growing at 1500% over the next 20 years offshore wind is set to overwhelm the demand from EVs,” Mr Atherley said.
“Pensana is investigating the potential of the Longonjo project to be one of the first major rare earth carbonate suppliers to be developed in a decade and to meet the growing demand for critical magnet metal materials.”
Mr Atherley said plans to re-domicile the company to the UK and to gai admission to the Official List, Standard Segment and to trading on the London Stock Exchange’s Main Market for listed securities is expected before the end of Q1 2020, subject to the receipt of the required regulatory approvals.
He added that the company has also held preliminary discussions with sovereign wealth funds, international financial institutions and mining financiers who have indicated a strong interest in engaging further on the project as it develops through the Definitive Feasibility Study stages.