It may just look like plain old mud to the average Joe, but to Arafura Resources the glories of the soil they own in central Australia is almost pure gold and potentially worth millions.
This pure gold' is known as rare earths' or chemical elements in certain soils that are used in the manufacturing of modern applications such as plasma TVs, medical imaging machines, hybrid cars and rechargeable batteries. Basically rare earths are essential for future energy technologies and are called "the vitamins of the electronics industry" by Arafura's Managing Director, Alistair Stephens.
"We are living in a modern world where day by day expectations on technology are increasing," said Alistair. "Look at the new i-phone which has just been launched, five years ago we wouldn't have thought something like that would be on the market so soon. It's definitely a sign of things to come and we intend to be at the forefront of this market in supplying the key elements needed to run these types of devices.
"In addition, as demand for food increases there will also be an increase in the demand for fertilisers. The extraction process for the rare earths delivers phosphoric acid for fertilisers as a co-product, so the market is there," he said.
Extracting rare earths from soil however is a complex process and needs specialised expertise. To tackle this, Arafura established a partnership with the Australian Nuclear Science and Technology Organisation (ANSTO) to build and run a pilot plant at ANSTO's Lucas Heights facility in Sydney's south. Two other companies, Bateman Litwin (Israel) and BEPL (Bateman
Engineering Australia) were also involved in the design, construction and operation of the plant.
According to Alistair, ANSTO will help Arafura compete for a market that is growing at 10-15 per cent per annum but is currently dominated by China as the world market supplier at 98 per cent.
"At the moment China supplies most of the world market for rare earths but demand is growing and currently outstripping supply, so a major market gap is occurring," he said. "As China booms industrially, so too will its demand for rare earths, thus creating a further gap. So by setting up a supply base in Australia the potential is huge and worth a great deal to the Australian economy.
"It is a long term project. However we are well on the way as the majority of the ANSTO pilot plant is now partially operating. We are testing the processes and are happy with progress so far," he said.
"Recent test results have also shown that part of the process we are developing will result in a significantly upgraded ore, which will reduce transport costs by an estimated 30 per cent."
To extract the rare earths the soil has to go through a variety of washing and filtering stages using different chemicals at each stage. From a layman's point of view the plant looks quite odd, with lots of big plastic containers, long tubes, scaffolding, buckets and liquids of various brown shades being shaken and stirred. There's also a lot of muddy looking water slurping around and drum-fulls of different coloured clay patties. To the untrained eye it really does look like a lot of dirt lying around but you are assured that none of it gets thrown away!
"It's really an extremely sophisticated chemical process," said Doug Collier, who is ANSTO's on-site manager of the Arafura project. "You need to get it right."
"In order to make sure the process was effective it was necessary to do tests in the laboratory well before the plant was designed and built," Alistair said. "The results we achieved with Bateman were excellent so we went ahead and built the plant.
"The pilot plant has another six months or so to run before final demonstration is confirmed but we are confident this will be successful. Not all the work is at ANSTO so we have to work in conjunction with other people in Arafura to ensure it all comes together, so team work is vital.
"This really is a unique and bold project Arafura is driving however the potential for Australia to break into this niche market is exciting and potentially very lucrative so we are determined to help Arafura reach its goals," said Alistair.
The project does not come cheap. With an overall price tag of $750 million, Arafura's Nolans Project, which includes mining establishment and management, having confidence in its suppliers, engineers, scientists and their own people is a must. But Arafura is confident: "Any project is a succession of challenges but this is a golden opportunity so we have ensured the best people are working on the project. For the pilot plant aspect of the project, the smiles on the faces of ANSTO staff when we ask them about progress is testimony and always very reassuring."
Arafura's goal is to be running at 100 per cent utilisation by 2013 producing 20,000 tonnes of rare earths oxides per annum. The project will also create up to 3,900 construction positions for the mine site and processing plant and over 155 local jobs during the early operating phases.
"We are very excited about the future as this project presents many opportunities for strategic joint ventures, new technological development and entirely new market streams for Australia," concluded Alistair.
Published: 10/09/2008