FYI Resources Ltd (ASX:FYI, OTCQX:FYIRF) shares rose 10% intra-day to 11 cents after expanding its critical minerals strategy into the rare earths sector through a binding agreement for the staged acquisition of Minhub Operations Pty Ltd (MOPL).
MOPL is collaborating with potential suppliers of rare earth rich mineral sands concentrate to provide a midstream processing solution via offtake of such concentrate, including from the heavy rare earth rich Gippsland and Murray Basins.
MOPL and Arafura Rare Earths Ltd (ASX:ARU, OTC:ARAFF) have signed a non-binding cooperation agreement to investigate the joint development of the Minhub Mineral Sands Processing facility in Australia’s Northern Territory.
The Minhub Project seeks to process third-party mineral sands concentrate (including from the Gippsland and Murray Basins) to separate the high-grade rare-earth minerals xenotime and monazite from other valuable mineral sands products such as zircon and ilmenite.
Under the cooperation agreement, Arafura has the first right of offtake for the neodymium (Nd) and praseodymium (Pr) rich monazite and heavy rare earth rich xenotime concentrate from the Minhub Project.
Through FYI’s acquisition of MOPL, FYI has an opportunity to move into the development and construction phases of Minhub along with project partner Arafura.
“Unique integrated rare earth production strategy”
FYI managing director Roland Hill said: “This is an exciting opportunity for FYI and demonstrates our commitment to be a key contributor to Australia’s critical minerals sector.
“While we continue to advance and de-risk our core high purity alumina (HPA) project, the planned acquisition of MOPL will create a great opportunity to be part of a unique integrated rare earth production strategy with Arafura that complements our production intentions as well as assisting Australia’s sovereign supply objectives for critical minerals.
“MOPL and Arafura are exploring options for the development of the Minhub Project, with a view to establishing an innovative, collaborative and potentially high return rare earths and mineral sands processing hub in Darwin, Northern Territory.
“Through FYI’s acquisition of MOPL, we can quickly move into the development and construction phases of Minhub with project partner Arafura.
“MOPL is well advanced in the engineering for the project and has well-developed existing relationships with the stakeholders, including upstream concentrate suppliers.
“FYI can leverage these assets and relationships, and its own capabilities, to create a project that will provide downstream value-add and help develop a rare earths supply chain in Australia to service local and global needs.”
Rare earths from mineral sands
Mineral sand deposits often contain small amounts of monazite and xenotime (high-grade rare earth minerals) in addition to other valuable minerals (including zircon, rutile and ilmenite).
High-grade rare earth minerals monazite and xenotime, recovered from Australia’s mineral sands deposits have historically been a major value component of mineral sands deposits and a significant contributor as feedstocks for the global rare earth market.
Increased low-cost Chinese production from the 1980’s led to lower rare earth prices and a wind down and closure of rare earth processing operations in the Western world.
For a period of about 20 years, most of Australia’s monazite production was returned to the pit as waste or stockpiled.
The dramatic growth in Chinese domestic mineral processing since the early 2000s has led to the development of a global trade in unprocessed or partly processed zircon rich concentrates to China.
This concentrate contains significant rare earths mineral content as a by-product.
With the shift towards global electrification and de-carbonisation, the rare earths used in rare earth magnets have become a major value driver for new mineral sands projects, particularly from the rare earth rich mineral sands deposits of Victoria’s Gippsland and Murray Basins.
Next step - feasibility study
Hill added: “New and reliable sources of rare earths production are required to satisfy growing global demand.
“Many markets are looking for suppliers outside of China, which currently dominates global rare earths supply chains.
“The development of Minhub enables us to take advantage of the excellent work already completed by MOPL to accelerate our entry into the rare earth market.
“Through working with Arafura, we aim to deliver a reliable and consistent supply chain for rare earths, from Australian mineral sands producers to end users such as wind turbine and electric vehicle manufacturers, enabling them to provide ethically sound options to their customers.
“With the acquisition of MOPL, our next step is to complete a Feasibility Study for the Minhub project early in the 2024 calendar year, with the goal of developing Minhub in parallel with Arafura’s Nolans Project.”