Earlier today I got word that the US Department of Energy (DOE) has released an update to its Critical Materials Strategy, which was first published as a report in December 2011 2010. This document has helped to shape a fair amount of the debate on rare earths in particular, and critical & strategic materials in general, in the past 12 months.

You can download a copy of the report from here.

I’m still digesting the contents of the report; I can tell you that the DOE still considers the five rare earths dysprosium, neodymium, terbium, europium and yttrium to be critical in the short and medium term; indium is judged to now be near-critical in the near term, compared to being categorized as critical in the 2010 report.

New sections include one that covers the use of rare earths in fluid cracking catalysts, and how the petrochemical refining industry reacted to escalating prices of materials in 2011.

More to follow once we’ve had a chance to read through the report more thoroughly.

Update (01/17/12): the URLs for the report have been updated, since the original links no longer work.

Early last week while on a visit to Australia, I had the opportunity to visit the demonstration plant for the Dubbo Zirconia Project, owned by Alkane Resources Ltd. (ASX:ALK, OTCQX:ANLKY). The demonstration plant is housed on the Lucas Heights campus of the Australian Nuclear Science and Technology Organisation (ANSTO) in New South Wales, about 20 miles southwest of Sydney. It is operated by the ANSTO Minerals group, a top-notch consultancy within ANSTO with expertise in mineralogy, metallurgy, chemical engineering, environmental management and radiation safety.

The Dubbo project is located about 20 miles south of the town of Dubbo, which is itself about 250 miles northwest of Sydney. According to Ian Chalmers, Alkane’s managing director, Dubbo has been under development for the last 13-14 years. A polymetallic deposit, the principal resources of interest are zirconium (Zr), niobium (Nb) and rare-earth elements (REEs).

Alkane has worked with the ANSTO Minerals group to develop processes that can produce a variety of end products, included Zr- and Nb-based compounds, as well as light REE (LREE) and heavy REE (HREE) concentrates. The purpose of the demo plant is to scale up these processes, so that they can be proven out and fine-tuned. The ANSTO team was a logical choice for partnering in this work, with significant in-house expertise and prior experience in developing mineral-processing flowsheets, including the original processes for the Mount Weld project, owned by Lynas Corporation Ltd. (ASX:LYC, PK:LYSCF).

To date, Alkane has been considering two alternate production scenarios for the DZP. The first would see 400 ktpa of ore processed, and is the base case for the project. A second expanded model would see 1 Mtpa of ore processed. Mr. Chalmers indicated that Alkane is almost certainly going to proceed with the latter scenario, although this means updating the vendor cost estimates used in the project’s original bankable feasibility study, since they were based on the 400 ktpa scenario. The path to be chosen has primarily been dictated by the ability of the company to sell the Zr-based compounds that it can produce. In the last year or two though, the potential value of the REE concentrates that can be produced from the project has been of growing influence on the direction to take. This, combined with increased demand and prices for Zr-based products, as well as strong demand for Nb-based products, has led the company to focus now on the 1 Mtpa scenario as its favored approach. An updated feasibility study is due in July 2011.

1 Mtpa of processed ore would lead to the production of around 15 ktpa of Zr-based products, 3.5 ktpa of Nb-based products and around 4.6 ktpa of REE concentrates, in both LREE and HREE form. Mr. Chalmers said that Alkane is looking to work with non-Chinese processors of these concentrates, giving such processors and end users the option of separating out specific products from the mix. I discussed with Mr. Chalmers a recent news report that claimed that Alkane was going to have Lynas Corp. process its REE concentrates. He dismissed this report as being entirely inaccurate. Alkane had had discussions with a wide variety of REE producers on a range of topics, he said, including Lynas, but there was no “deal” to process the concentrates.

A key feature of the flow sheet developed by ANSTO, is that the thorium (Th) and uranium (U) present in the ore does not get concentrated during the process. The waste steams containing these radioactive elements will be mixed with limestone (and contained within the project site), which will dilute the Th and U content to a level below that of the original mineral deposit. Mr. Chalmers indicated that the Dubbo mineral deposit contains relatively low levels of Th (around 400-450 ppm) and U (around 100 ppm) to start with, levels which do not trigger additional regulatory requirements.

Mr. Chalmers pointed out that while the Zr- and HREE-bearing minerals at Dubbo resemble eudialyte and armstrongite, they are not exact analogues for these known minerals. The process developed at the demo plant for extracting Zr and REEs from these minerals does not result in the so-called “silica gel” problem, which can cause problems in other processes, with the development of “crud” in solvent extraction circuits. While this is obviously advantageous for the Dubbo project, because the minerals are not exact analogues, it does not necessarily follow that the flow sheet could be applied to other Zr-REE-bearing mineral deposits.

Since ANSTO is an Australian government facility, doing sensitive work, visitors are not usually allowed to take photographs on-site. However, we were able to get special permission for me to take photos in the facility housing the demo plant, and they can be seen below (click on each image to enlarge it).

Initial work on the flow sheet focused on using hydrochloric acid, hydrofluoric acid, and sodium hydroxide for leaching, before settling on the use of sulphuric acid (H₂SO₄) for leaching. Various flotation techniques were also assessed as methods of pre-concentration but were deemed to be unsuitable because of the fine grain size. A key advantage of the H₂SO₄ approach is that the host rock does not go into solution in H₂SO₄, and so this leads to relatively low levels of contaminant in the solution.

The Zr present is separated out first, followed by Nb and then finally the mixed LREEs and HREEs, as concentrates. Interestingly, around 70% of the mixed LREEs precipitate out into the filter cake residue that results from the first filtering process. This can be washed and then put back into solution. The complete cycle yields a light rare-earth oxide (LREO) concentrate that contains around 99 wt% REOs, and a heavy REO concentrate that contains 70-80 wt% REOs.

In terms of producing H₂SO₄, the key reagent for processing, Mr. Chalmers said that Alkane would produce its own on-site. He commented that there were acid producers in the vicinity up to as recently as 4-5 years ago, but that these had subsequently closed operations.

The project leader at ANSTO for the demo plant is Mr. Adrian Manis, a chemical engineer and hydrometallurgy specialist with the ANSTO Minerals group. He said that the ANSTO team had worked on the physical side of the demo plant, while an additional third party, TZ Minerals International, had worked with Alkane on the feasibility study.

As part of the initial process development, 500 t of ore was mined from the Dubbo site, and crushed to 5-10 mm average particle size diameter. Approximately 100 t of this material was then sent to ANSTO in 1 t bags, to provide enough materials for testing. After grinding and mixing with sulphuric acid, the material was roasted in a kiln set up for the purpose, capable of processing around 100 kg / hour or material. Over the course of more than a dozen processing campaigns, the material was used to test and to optimize process flows, using various types of additional equipment (shown in the photos above).

Initially processes for Zr and Nb separation were nailed down first. Mr. Manis commented that the interactions between Zr and Nb and their related compounds are complex, with many nuances. Mr. Chalmers added that the deposit ultimately governs the flow sheet – even if you have the same metals present as another deposit, the flow sheet has to be tailored to the individual deposit. Standard processes such as mixer-settler stations and membrane filter presses were used to complete the solvent extraction cycle. ANSTO has also been looking at using pulse columns instead of mixer-settlers as part of this process. These columns have been successfully used in the processing of other minerals. They don’t have distinct stages, and if shown to be effective, could result in a smaller footprint and potentially lower capital and processing costs.

Once the Zr and Nb separation process development was well underway,  the ANSTO team then turned its attention on the flow sheets for the REEs. The majority of the work on developing the HREE concentrate was completed last year, with the initial LREE concentrate work being completed in March 2011. Mr. Manis said that the team continues to work on optimizing and tweaking the processes for producing these concentrates.

Turning back to the Dubbo mineral deposit itself, Mr. Chalmers indicated that the grade of Zr, Nb and REEs is particularly consistent across the entire mineral resource, and down to a depth of 100 m. This low variability makes it easier to predict the processing requirements for the minerals once extracted. Alkane is considering drilling a 500 m hole just to see how far down the deposit goes. Future processing facilities for the project would be located not far from the site itself, close to power and rail links. Mr. Chalmers commented that they would look to obtain a license to take water for processing from the Macquarie River which runs nearby.

Overall I have to say that the demo plant and its set-up was pretty impressive, and was on a significantly larger scale than I had previously thought. After spending time with Mr. Manis, and with some of his colleagues later that same week, it is obvious that the ANSTO Minerals group is very capable when it comes to working on these types of projects, and is a strong asset for the Australian minerals-processing community. Alkane Resources also seems to be taking the right approach with their development work; quietly working away with ANSTO and others in making sure that they have their processes nailed down, without a whole lot of hyperbole along the way…

My thanks go to Alkane Resources Ltd. and to ANSTO for facilitating my visit to the DZP demonstration plant.

Disclosure: at the time of writing, Gareth Hatch is neither a shareholder of, nor a consultant to, Alkane Resources Ltd. (Alkane) or any of its subsidiaries, or any other publicly traded junior-mining company. He did not receive compensation from Alkane or from anyone else, in return for writing this article.