St George Mining (ASX: SGQ) has provide an update on recent geopolitical and trade developments in the global rare earths market, which highlight the strategic importance of the large, high-grade rare earths deposit at the company’s 100%-owned Araxá niobium-REE project in Minas Gerais, Brazil.
The maiden JORC compliant Mineral Resource Estimate for the Araxá project is 40.64Mt @ 4.13% TREO with contained TREO of 1.7Mt.
The grade and size of the resource compare favourably with world-class rare earths mines such as Mt Weld in Western Australia and Mountain Pass in California. Significantly, when the Mt Weld concentration plant was commissioned in 2011, the resource at Mt Weld stood at 17.49Mt @ 8.1% TREO for contained TREO of 1.4Mt. The current total resource for Mt Weld is 106Mt @ 4.1% TREO.
The high-grade niobium and rare earths mineralisation at Araxá – with grades up to 82,970ppm (8.29%) Nb₂O₅ and 329,800ppm (32.98%) TREO – remains open in all directions to present outstanding potential for a large increase in the MRE with further drilling.
With China implementing export restrictions on a range of rare earths elements – as well as permanent rare earths magnets – to create a supply chain shock for the US economy and many other countries that rely on imports from China for these critical metals and products, St George’s Araxá project offers an alternative, sustainable supply chain.
Drilling is about to start to grow the Araxá resource. With mineralisation open in all directions and significant mineralisation below 100m from surface not yet included in the current Mineral Resource Estimate, there is potential for an order of magnitude increase of the resource at Araxá.
Metallurgical test work is underway to determine the optimal flowsheet for potential commercial production of both niobium and REE products at Araxá, a key step in the plant design and project construction.
St George is also participating in the MAGBRAS Initiative, a program aimed at establishing Brazil’s first permanent magnet-making facility. Participants in the MAGBRAS Initiative include major end-users such as the auto giant Stellantis as well as emerging rare earths producers in Brazil – a country which has the world’s third largest reserves of rare earths mineralisation.
The NdPr (neodymium: praseodymium) grade at Araxá is a high 7,800ppm (0.78%) with 320,000 tonnes of contained NdPr, the main rare earths used in permanent magnets – highlighting the potential for Araxá to be a significant supplier to permanent magnet manufacturers in Brazil and elsewhere.
The Araxá project is in the Brazilian State of Minas Gerais – a Tier 1 mining jurisdiction – and within a region with a long history of commercial mining operations, ready access to infrastructure, a skilled workforce and a proven route to market. The Araxá deposit starts at surface supporting the potential for low-cost open-pit mining.
“China’s increased restrictions on the export of rare earths and permanent magnets have significantly disrupted the global supply chains for these commodities which are critical to a wide range of sectors including defence, electric vehicles, energy, smartphones, robotics and medical equipment,” executive chairman John Prineas said.
“This development is evidence that single-source supply chains are a risk, from China or anywhere else. The need for a sustainable rare earths industry outside China has never been stronger.
“One of the largest producing hard-rock rare earths mines outside of China is the Mt Weld mine owned by the $7.3 billion-valued Lynas Rare Earths Lynas (ASX: LYC) with a total resource of 106Mt @ 4.1% TREO.
“St George’s Araxá project has a total JORC resource of 40.64Mt @ 4.13% TREO, illustrating the potential value upside for St George as we progress through development studies and resource expansion drilling to demonstrate the potential for a commercial rare earth mining operation at Araxá.”
