The Steenkampskraal Rare Earth Mining Project In South Africa Attributes

 

  • Steenkampskraal Holdings Ltd. (SHL) owns 74% of Steenkampskraal Monazite Mine (Pty.) Ltd. (SMM) which holds the Mining Right for the Steenkampskraal mine (SKK) in the Western Cape Province of South Africa. The balance of 26% is held by the Steenkampskraal Workers’ Trust (SWT).

 

  • Ease of access: SKK is about 350 km north of Cape Town. About 320 km are on the tarred N7 highway and about 30 km are on a well-maintained dirt road. SKK is about 1 km from this dirt road. These good roads mean that supplies can be transported easily to the mine and that the rare earth products can be easily delivered to Cape Town.

 

  • Good infrastructure: SKK was previously mined. Anglo American Corporation (AAC) built the mine, developed the mine and produced monazite concentrate at SKK for about 10 years in the 1950s and 1960s. There is a decline shaft, developed stopes and stockpiles of ore reserves. Great Western Minerals Group Ltd. (GWMG) made a substantial investment between 2011 and 2015 to bring the mine into production, including water supplies, power supplies and communications. Much of the investment to bring the mine into production has already been made.

 

  • Easy to mine: SKK is a hard-rock monazite deposit that had an outcrop on the surface where AAC started mining in the 1950s. AAC mined to a depth of about 100 metres. Mining will restart at about this depth. The mining plan is simple.

 

  • Mining Right (MR): SKK has the right to mine all the minerals in the 474-hectare MR area, except diamonds and oil, until 2030. This MR is renewable until the ore reserves are depleted, which could be 10 or 20 years beyond 2030.

 

  • High grades: GWMG made a large investment to increase the mineral resource and to confirm this resource in accordance with the Canadian NI 43-101 regulations. This NI 43-101 Mineral Resource Estimation (MRE) confirms the presence of 605,000 tons of ore at an average grade of 14.4%, which is the highest rare earth grade in the world with an MRE that complies with these NI 43-101 requirements. The neodymium (Nd) grade, on its own, is 2.58%. The praseodymium (Pr) grade is 0.74%, the dysprosium (Dy) grade is 0.14% and the terbium (Tb) grade is 0.03%. The combined grade of these rare earths that are used to make magnets is 3.49%, which is higher than the total rare earth grades of most other rare earth deposits.

 

  • Low costs: The high grades at SKK mean that the mining costs will be low. Including dilution, on average, SKK will mine about ten tons of ore to produce one ton of rare earths. A mine with a grade of 2% would have to mine 50 tons of ore to produce one ton of rare earths. A mine with a grade of 1% would have to mine 100 tons of ore to produce 1 ton of rare earths. SKK will therefore have much lower costs than mines with low grades that must mine and process five times or ten times more rock to produce the same amount of rare earths.

 

  • Low capital expenditure (capex): As much of the capex to bring the mine into production has already been made, the remaining capex is low. As the volume of ore to be processed is small (about 30,000 tons per year or 100 tons per day), the capex for the processing equipment for these small volumes will also be low.

 

  • Low operating expenditure (opex): As SKK will mine and process small volumes of material with very high grades, the production costs per kilo of rare earths will be low.

 

  • Large volumes: The MRE confirms the presence of 86,930 tons of REOs at SKK, including 15,600 tons of Nd, 4,450 tons of Pr, 867 tons of Dy and 182 tons of Tb. At the planned production volume of 2,700 tons per year, SKK will have a life of about 30 years, based on the present MRE. These 2,700 tons per year will include 480 tons of Nd, 138 tons of Pr, 26 tons of Dy and 5 tons of Tb.

 

  • Prospecting potential: The limits of the ore body at SKK have not yet been found. There is great potential to increase the ore reserves within the Mining Right area and in the Company’s Prospecting Rights areas around SKK.

 

  • Environmental Management Programme (EMP): SKK has an approved EMP.

 

  • National Nuclear Regulator (NNR): SKK is registered with and regulated by the NNR. SKK is authorized to mine, process, transport and store Naturally Occurring Radioactive Materials (NORM). SKK may mine the monazite, separate the rare earths from the thorium, sell the rare earths and store the thorium at SKK.

 

  • Mining Works Programme (MWP): SKK has an approved MWP.

 

  • Black Economic Empowerment (BEE): SKK has an approved BEE partner in the Steenkampskraal Workers’ Trust (SWT).

 

  • Social and Labour Plan (SLP): SKK completed one SLP that was approved by the Department of Mineral Resources (DMR) and is now preparing a second SLP.

 

  • Notarial Mineral Lease (NML): SKK has an NML from the DMR which provides for SKK to rehabilitate the impacts from previous mining activities on behalf of the State and at the State’s cost and thereafter to pay a royalty of 5% of the value of the minerals produced at SKK.

 

  • Land Use Planning Ordinance (LUPO): The SKK MR area has been re-zoned for mining.

 

  • Water license: SMM has a water use license issued by the Department of Water and Sanitation (DWS).

 

  • Known technology: SKK will use technology that has been used and proved over many years. The mining technology that will be used at SKK has been used in South Africa (SA) and around the world for many years. The technology to produce monazite concentrate from the ore has been known and used for many years. The technology to crack the monazite into the rare earth and the thorium fractions using caustic soda has also been used for many years.

 

  • Labour: The area around SKK is sparsely populated, has high unemployment and few job opportunities. The small communities around SKK will welcome the job opportunities that SKK will provide. Salaries and wages in the district are modest and labour costs will be low. SKK will employ people mainly from the town of Vanrhynsdorp, which is 80 km away and which has a population of about 5,000. SKK’s employees will travel to and from the mine every day.

 

  • Land: The Company owns three farms around SKK that extend to nearly 7,000 hectares. SKK rents these farms to farmers who use them for grazing sheep. SKK therefore has ample room for future expansion.

 

  • Good jurisdiction: The government encourages the mining industry in SA.

 

  • Government support: The Industrial Development Corporation (IDC) and the Western Cape provincial government (WC) support the SKK project.

 

  • Purchase of monazite: With its NNR Certificate of Registration, SKK could buy monazite concentrate from heavy mineral sands producers in southern Africa, transport this monazite to SKK, process it at SKK, and sell the rare earths. Drawing on this vast resource, SKK could greatly increase its volume of production and extend its life indefinitely.

 

  • Strong demand: SKK will initially produce mixed rare earth carbonate; there is a shortage of and strong demand for this product.