Greenland Minerals and Energy (ASX:GGG) is forecast to be the largest producer of key rare earth elements for electric vehicles from its 100% owned Kvanefjeld Project in Greenland.
These include neodymium, praseodymium and dysprosium which are essential to high-powered permanent magnets used in the electric drive motors.
Prices of neodymium and praseodymium are up 80% this year on the back of strong demand and tightening supply.
China recently joined India, France, UK and Norway in moving to set timelines for their respective national transition to electric vehicles.
Kvanefjeld has the largest code‐compliant resource (JORC or CIM) of rare earth elements that are critical to the clean, green and smart revolution.
The US$1.59 billion Kvanefjeld Project
Greenland Minerals' vision is to develop a stable, long-term source of materials for clean energy generation and energy efficient technologies.
Kvanefjeld is one of the world's most advanced rare earth and uranium projects with defined JORC compliant resources of over 1 billion tonnes containing 11.1 million tonnes of rare earth oxide and 593 million pounds of uranium.
As per the updated feasibility study, the net present value of the project is US$1.59 billion and the internal rate of return is 43.4%.
Project financing costs are US$831.9 million and the project has a payback period of 5 years.
Working closely with strategic partner and major shareholder
Greenland Minerals continues to work closely with strategic partner and major shareholder Shenghe Resources Holding Co Ltd (SHA:600392).
Work has been focused on optimising the Kvanefjeld Project and ensuring it is aligned with downstream processing, as a precursor to project development.
A representative from Shenghe, geologist Zhao Mingwu has been onsite through August to early September to gain greater familiarity with the project area and the geology of the region.
Shenghe is a leading Chinese rare earth company with a market cap of over A$5 billion, its downstream processing technology and capacity provide solid foundations for Kvanefjeld’s future.
Finalising impact assessments in the field
Over recent months, field-based activities and stakeholder meetings in the project area have been undertaken to support impact assessments for the Kvanefjeld Project.
Activities have been focused on data generation and stakeholder meetings to support finalising impact assessments for the Kvanefjeld.
Sampling programs that were undertaken by independent environmental consultant Orbicon to generate supplementary environmental data are now complete.
Furthermore, the company’s impact assessment consultant, Shared Resources, has been on the ground in Greenland conducting meetings with a range of stakeholders and regulatory departments.
Global government policy driving prices
Increasing global government policies to transition to electric vehicles and to significantly expand offshore wind power capacity continues to drive prices of rare earth elements.
These policies underwrite continued demand growth for neodymium, praseodymium and dysprosium.
Under 2016 feasibility study parameters, Kvanefjeld would be one of the largest producers globally of these critical materials.
Furthermore, on the supply side, due to a number of Chinese government initiatives, a general tightening of the supply of rare earths is now occurring.
Under China’s rare earth development plan for 2016-2020, mine production is to be capped at 140,000 tonnes per annum, which will likely see China shift to a net-importer of rare earths.
This provides a valuable window for projects such as Kvanefjeld.