London-listed rare earths exploration and development company Altona says a newly released scoping study demonstrates the potential for its Monte Muambe rare earths project, in northwestern Mozambique, to become a viable mining operation.  

The company has also published an updated competent person report. 

"For Altona, the Monte Muambe scoping study is a significant milestone. This key deliverable serves as an affirmative initial validation of the project's economic viability, enabling the company to establish its presence amongst other prospective rare earth element producers in Africa.  

“It provides, together with the mineral resource estimate, a solid foundation for the project's subsequent progression," Altona CEO Cedric Simonet says. 

The scoping study indicates a post-tax net present value (NPV) of $283.3-million with a post-tax internal rate of return of 25%. 

Payback from first production is expected to take 2.5 years through the production of 15 000 t/y, on average, of mixed rare earth carbonate (MREC), at an average price of $13 558.4/t.  

Overall, the project is expected to have a life-of-mine (LoM) of 18 years. The operation will feature a two-stage recovery process, consisting of comminution and flotation, followed by hydrometallurgy. 

The LoM earnings before interest, taxes, depreciation and amortisation of $1.67-billion will come from an initial capital expenditure (capex) of $276.3-million. 

The Monte Muambe scoping study takes into consideration openpit mining of Target 1 and Target 4, at an LoM strip ratio of 1.6 over a period of 18 years. An expected 750 000 t/y of ore will be extracted and processed through a beneficiation plant to produce rare earths concentrate. The beneficiation process will include crushing, milling and flotation.  

The concentrate will then be processed through a hydrometallurgical plant to produce an average of 15 000 t/y of MREC. The hydrometallurgical process will involve a weak acid gangue leach, followed by rare earths leaching and purification.  

The MREC product will be packaged and transported by existing road infrastructure to the Port of Beira, in Mozambique, for export. 

Using an NPV of $283.3-million with an applied real discount rate of 8%, the project is most sensitive to revenue derived from price, recovery, grade and exchange rates, and less sensitive to operating expenditure and least sensitive to capex. 

Considerable upside potential was identified in the scoping study and will be developed further in a prefeasibility study (PFS). This includes the possible increase of the resource base, as well as of the LoM and ore extraction rate, along with mining parameters optimisation.  

Processing and metallurgy, both for the beneficiation and hydrometallurgical plants, are earmarked for future improvements, as are the energy sources mix and logistics options.  

Altona says the company will also evaluate the possibility of doing further on-site, in-country or regional separation and refining and of setting up responsible sourcing systems. 

The publication of the scoping study marks the end of Phase 2 of the project farm-out agreement and entitles Altona to an additional 31% ownership in Monte Muambe Mining Limitada (MMML), the project's special purpose vehicle, taking its total current holding to 51%. Contractual and administrative processes have already been initiated to implement this change, Altona says. 

"The magnet metals present at Monte Muambe, representing 90% of the project's future revenue, are critical components of the global green energy transition. The supply deficit for neodymium and praseodymium oxide is forecast to grow to 90 000 t/y by 2040, and to allow the decarbonisation of energy sources, more magnet metals mines must come online in the following years," Simonet says. 

The project is now entering Phase 3, which upon completion will allow the company to increase its holding to 70%, with the key deliverable being the PFS. The remaining ownership is held by Ussokoti Investimentos and MMML. 

Preliminary PFS activities started in July, in the form of in-fill drilling at Target 4, and these will ramp up over the course of the coming months, with additional exploration, planning and consultant services procurement activities, as well as a strong focus on additional metallurgical test work. The company intends to also apply for a mining concession during Phase 3. 

"As the project moves into its PFS stage, the company will continue to work towards de-risking Monte Muambe and, with its local partners, to optimise its technical, commercial and financial parameters.  

“The global rare earths supply chain is diversifying away from China's decades-long domination and Western processing facilities are starting to come online," Simonet points out.