Arafura Reduces CAPEX, OPEX for Nolans Rare Earth Project

Rare Earth Investing

Arafura Resources Ltd. (ASX:ARU) provided the results of a CAPEX and OPEX review on its Nolans rare earth project, located in Australia’s Northern Territory.

Arafura Resources Ltd. (ASX:ARU) provided the results of a CAPEX and OPEX review on its Nolans rare earth project, located in Australia’s Northern Territory.

Encouragingly, CAPEX has been reduced by 27 percent, to AU$1,408 million, while OPEX has fallen to $15.67 per kilogram of rare earth oxide. That amounts to a price reduction of $98 million per year.

As quoted in the press release:

The initial CAPEX for the Nolans Project now stands at A$1,408 million (or US$1,263 million at A$1 = US$0.897), inclusive of indirect and owner’s costs, and a 15% contingency. Indirect costs primarily relate to EPCM, specialist consultant costs and site costs. The CAPEX excludes A$197 million of costs which Arafura has deferred by adopting selective mining practices during the first ten years of operation.

Capital costs have been compiled by the Company, and derived from estimates generated by a number of engineering organisations.

The Project’s OPEX is now estimated to be A$15.67/kg REO (or US$14.06/kg) based on annual REO equivalent production of 20,000 tonnes. This represents a reduction of approximately 24%, or A$98 million per annum, on the Base Case, and compares favourably with published costs from current non-Chinese rare earths production. The key reductions in OPEX result from achieving greater efficiencies in beneficiation, rare earth extraction and separation, and simplifying the supply chain. Operating costs include general and administration, maintenance materials and contractors, consumables and other support costs.

Click here to read the full Arafura Resources Ltd. (ASX:ARU) press release.

The Conversation (0)
×