Ionic Rare Earths: Staged development of Makuutu
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2023-11-30
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Australia’s Ionic Rare Earths Limited (Ionic), which is listed on the ASX, is expected to be in production within the next few months, albeit on a very small scale, at its Makuutu rare earths project in Uganda.As the company’s MD, TIM HARRISON, and its COO, DR TOMMIE VAN DER WALT, explained to ARTHUR TASSELL recently, the company is adopting a staged approach to development. The first stage, essentially a demonstration plant, is already under construction.While rare earths deposits are not particularly rare, Makuutu is highly unusual – at least in an African context – in that it is a near-surface, ionic adsorption clay deposit.It is located about 120 km to the east of Uganda’s capital Kampala and 40 km east of the regional centre of Jinja, not far from the point where the Nile exits Lake Victoria. The area is well served by infrastructure and is easily accessed throughout the year, irrespective of weather conditions.“Deposits of this type have been successfully mined in southern China for several decades, but they are relatively uncommon elsewhere in the world,” says Harrison.“Certainly, Makuutu – once fully developed – will be the first mine in Africa to exploit an ionic adsorption clay deposit and, for that matter, one of only a handful of rare earths mines of any type globally outside of China. As it happens, it will also be one of the first large-scale mines in Uganda, which currently has only a very small mining sector.”Explaining the difference between ionic clay-type deposits and the more familiar hard rock deposits, Harrison says that in a hard rock deposit the rare earth elements (REE) occur in a mineral form.“By contrast, the rare earths in our type of deposit are elemental in nature. They are the result of natural weathering processes in REE-bearing minerals that have occurred over millions of years, and which have resulted in the adsorption of REE ions onto the clay. To recover the rare earth elements, we will use an ionic desorption process.”Harrison joined Ionic in February 2020 as Project Manager for Makuutu, taking over as CEO and MD later in the same year. A chemical engineer, he has almost 25 years’ experience in the fields of both mineral processing and hydrometallurgy in multiple commodities. This has involved roles in virtually every aspect of project development.His previous employers include Clean TeQ (where he was responsible for process development for the Sunrise nickel-cobalt-scandium project in Australia), BHP, Bechtel, Fluor and Ivanhoe Australia.Development meets mine-building experienceWhile Harrison has been the driving force behind Makuutu’s development over the past several years, his skills are now complemented by the mine-building experience of van der Walt, who prior to joining Ionic in June this year was GM of Projects and Studies Africa with private equity group, EMR Capital, where he led the Lubambe copper project in Zambia.A mechanical engineer with an MBA in Business Management and a PhD in Business Administration, van der Walt was Newmont’s Regional Project Director for Africa before joining EMR Capital and successfully delivered the US$2 billion Ahafo gold project in Ghana.“I’ve been developing mines in Africa for the past 20 years and I will be doing the same for Ionic,” he says.“This is a very exciting project which is small at present, but which will grow into a very sizeable operation which will position Uganda as a very important provider of rare earths – magnet and heavy rare earths in particular – to global markets.”Outlining the background to the Makuutu project, Harrison says the deposit was discovered around 2011 as a result of an effort by the Ugandan government to find uranium. This effort was unsuccessful, but it did identify the clay mineralisation rich in rare earths which is the basis of the project.“Subsequent exploration was undertaken by David Kyagulanyi, the Ugandan geologist who found the deposit, and later by a South African company, Rare Earth Elements Africa (REEA),” notes Harrison. “Ionic – then known as Oro Verde – entered the picture in 2019 when it signed an earn-in agreement with REEA. As a result of the work programmes it has undertaken, Ionic now owns 60% of the project through Rwenzori Rare Metals, the Ugandan company that holds the rights to Makuutu.”A resource of global significanceIonic’s work has defined a resource of global significance, which totals 532 Mt at 640 ppm Total Rare Earths Oxide (TREO) at a cut-off grade of 200 ppm Total Rare Earths Oxide minus CeO2 (TREO-CeO2). This resource, around three-quarters of it in the indicated category, is based on just three of the Makuutu tenements, representing only 134 km2 of the 298 km2 of licence area. It could well double according to Ionic’s latest Exploration Target of 216 to 535 Mt grading 400-600 ppm TREO.From a mining perspective, the Makuutu deposit presents few challenges. Extending over a distance of 37 km in an east-west direction, the orebody is shallow with the 5 to 30 m thick REE-bearing clay layer occurring under approximately 3 m of cover.“The mining will be more of an earthworks operation than anything else using excavators and dump trucks,” says van der Walt.“There will be little, if any blasting, and the strip ratio will be very low. The real challenge will be to get the right blend of material to feed to the plant and this might require several pits to be active at the same time. We’re also, of course, dealing with a clay product, which could complicate the handling of the materials. These are all matters we will be investigating over the next few months.”He adds that the nature of the orebody simplifies rehabilitation, which will be concurrent with mining. The rehabilitated ground will be suitable for agriculture. The ROM ore, which requires no crushing or milling, will be stacked and heap leached using an acidified salt solution (ammonium sulphate) to desorb and leach REE from the ore. The process liquors will be processed using membrane technology to upgrade the REE concentration, with the clean water recycled back to the heaps for washing.Ionic Rare Earths magnet recycling demo plant to operate early 2024Excess water will be processed to recover any reagents and REE content prior to disposal of high-quality water back to the local environment once environmental standards for discharge have been met. The final product will be an intermediate chemical precipitate known as Mixed Rare Earth Carbonate (MREC). This is a high payability value-added product, free of radionuclides, suitable for export for further processing via solvent extraction refining to high purity oxides.Harrison says that the flowsheet to be used has been developed in-house by Ionic.“The Chinese, who have the most experience when it comes to the processing of ionic adsorption clay ores, protect their intellectual property fiercely so we have not been able to draw on their expertise,” he notes. “We’ve had to rely on our own resources to a large extent, supplemented by contributions from expert consultants.”Explaining Ionic’s staged approach to development, van der Walt says the first stage, now underway, will see the construction of a demonstration plant that will enable the company to test and refine its flowsheet.“This is a small-scale, pilot-type operation that will allow us to test our mining methods, the heap leach operation – it will include 6-metre columns and cribs – and the process flowsheet,” he explains.“In the first stage, we will mine about 200 tonnes of material, process it and produce an MREC product which we can use for downstream product verification and offtake. We’ll run this pilot operation till we get all the answers we need but we would envisage that it should be completed by the end of the first half of 2024.“We’ll apply all the lessons derived from the pilot plant to what we call stage 2. This will be a scale-up of the pilot plant operation to allow it to produce between 1 and 10% of the total production we envisage from the fullscale operation and will give us another opportunity to test all our technology at a very realistic scale. After Stage 2, we will then move to the full commercial mine and plant.”The full-scale development has been the subject of a Definitive Feasibility Study (DFS), the results of which were announced in March 2023. This detailed a 5 Mtpa operation – focused on what is known as the central Makuutu zone – able to produce just over 40 kt of REO equivalent product, with 71% magnet plus heavy REO content, over a mine life of 35 years. The study puts the pre-tax NPV (8%) at US$406 million (post-tax US$278 million) and the IRR at 32.7%. Estimated capex is approximately US$121 million.Ionic recently appointed DRA Global to review the DFS and examine opportunities for additional cost efficiencies and time savings. DRA will also focus on the optimisation of mining pit design and operations and will advise on the demonstration plant programme.“We’re delighted to have DRA on board,” says van der Walt.“I’ve worked with the group several times in the past, including on the Ahafo project, and have always been impressed by its professionalism. It has a very strong record in Africa in particular and has in-depth skills spanning a wide range of disciplines. The group is now our business partner as we progress Makuutu towards an investment decision.”Uganda’s focus on growing its mining sectorMakuutu benefits from strong backing from the Ugandan government.“Uganda is very committed to growing its mining sector and has recently introduced new mining legislation, which provides a clear framework for mineral development and is investor friendly,” says Harrison.“We recently met with the Minister of Energy and Mineral Development, Dr Ruth Nankabirwa Ssentamu at the Africa Down Under mining conference in Perth, Australia, and she expressed her strong support for the project.”He adds that the Uganda Directorate of Geological Surveys and Mines has ‘approved for granting’ a large-scale mining licence for the project. It covers the area which was the focus of the feasibility study.Ionic has built up a team of about 80 people in Uganda, who are hard at work on the demonstration plant, a new round of exploration drilling and also Ionic’s community engagement programmes designed to establish the company’s ‘licence to mine’.The project, once in its full commercial phase, will be a significant contributor to both local communities and the wider Ugandan economy, with the DFS estimating gross royalty payments of US$199 million over the mine life as well as corporate tax contributions of US$438 million.Summing up the project, Harrison says that Ionic has been moving at a fast pace to develop Makuutu.“We’ve made remarkable progress since acquiring the project four years ago, despite all the impediments COVID placed in our way. We’re now at the stage where we will soon be producing a saleable product, even if on a small scale, and we look forward to making a final investment decision within the next year to 18 months.”
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