Alkane Resources (ASX: ALK) is a multi commodity mining and exploration company focused on the Central West of New South Wales, Australia. Alkane's shares are also listed as American Depository Receipts (ADR's). The company has built a gold resource inventory of over 1 million ounces at McPhillamys near Orange in a venture with Newmont Australia.
The Company has an advanced feasibility study in progress for the development of the Dubbo Zirconia Project which is based upon a very large in-ground resource of the metals zirconium, hafnium, niobium, tantalum, yttrium and rare earth elements.
Alkane Resources' Dubbo Zirconia Project, strategic source of rare earths
All signs from Australian-listed explorer and miner Alkane Resources (ASX: ALK) point to a positive picture of the company's Dubbo Zirconia Project in New South Wales.
Alkane managing director Ian Chalmers focused on the project in his presentation to guests at the recent BBY Limited Rare Earth Conference in Sydney.
A$85 million-capped Alkane is concentrated in the Central West of New South Wales, where the Australia Dubbo Zirconia Project – a world class resource of zirconium, hafnium, niobium, tantalum, yttrium and rare earths - is located.
The Dubbo Zirconia Project (DZP) is the world's largest in ground resource of zirconium and some rare earth elements. At the base case throughput of 200,000 tonnes per annum of zirconia, production would represent 7 per cent of world demand and have a mine life of over 200 years.
It also has a combined 73 million tonne measured and inferred resource, according to Mr Chalmers.
Construction of the project is scheduled to commence in quarter 1 2011, with production kicking off a year later.
During this morning's trade, shares in the company increased 2c to 35c.
Rare earths became a boom industry after a series of technological advances, including the development of iPhones and X-ray machines, which rely on their specific properties.
The international demand has tripled from 40,000 tonnes to 120,000 tonnes over the past 10 years, during which time China has steadily cut annual exports from 48,500 tonnes to 31,310 tonnes.
China currently produces 95% of world rare earths elements output. Green technology is dependant on rare metals and rare earths.
The majority of China's supply of rare earths comes from a mine near the city of Baotou in Inner Mongolia, with the remainder coming from small and sometimes illegal mines in the south of the country.
The main consumers of rare earth materials are in South-East Asia (Japan, Korea, Thailand, China) and in the USA. The United States used to be the largest consumer of rare earth materials, about 27% of the world's total.
Zirconium, on the other hand, is used as a drying agent in paints, primer coat of vehicle metalwork, ceramic pigments, engineering ceramics, auto catalysts, electronics, solid oxide fuel cells, fuel rods in nuclear power plants, special alloys and .
The demand for zirconium is increasing with the expected 2012 global consumption at 1,400,000tpa, rising to 150,000 tonnes by 2015 at an industry growth rate of 4.5%pa.
The majority of “downstream” zirconium products are derived from zircon, whose output is governed by ilmenite/rutile from mineral sands mining operations.
China dominates downstream zirconium business at ~but feed is zircon, while niobium production is dominated by one company, CBMM in Brazil, which has 90% of market.
Production costs are spread across the four metal outputs – zirconium (hafnium), niobium (tantalum), light rare earths and yttrium-heavy rare earths.
With rare earth and yttrium production dominated by China - Alkane's DZP offers a new source particularly for important Y and HREE.
The DZP provides an alternative and strategic source for a number of important metals, and is capable of producing for hundreds of years from one ore body.
Companies with potentially significant supplies of rare earth elements and zirconium-focused stocks are finding increasing popularity as investors look for undervalued "plays" in the sector.
