Weekly Review: Burundi’s REE mystery, tick for Tantalus, WTO process grinds into action

First this week: a mystery.

Whatever happened to the Gakara rare earth project in Burundi? This subject comes up due to an unexpected development in Australia.

We keep hearing about companies jumping on the REE bandwagon, but Southern Crown Resources (ASX:SWR) has just jumped off. The company in 2010 did a deal with unlisted Rare Earth International to acquire the Xiluvo REE project in Mozambique and Nkombwa Hill in Zambia.

Now the company has sent the properties back to the vendor, a group of investors who had picked up the ground. Managing director Jock Harmer, who has specialised in REE, is also leaving the company to pursue other rare earth opportunities.

Back in 2010, Southern Crown also applied for the Gakara project in Burundi. It seemed promising: the REE deposits were discovered in 1936 and the Karonge mine operated on and off until 1979. About 5,000 tonnes of REE concentrate was mined from a number of open pit and underground operations. SWR’s initial announcement also stated that the mineralisation was located in swarms of veins. The dominating elements were lanthanum, cerium, neodymium and samarium.

Southern Crown was first in with applications for the ground and assumed it would be granted the tenements. Then another companies also applied, and the Burundi government accepted its application. Southern Crown was out in the cold – with no explanation. We don’t really know much about this company that was the successful applicant: there were two statements by the Burundi government last year which refer to the project being operated by a company called Rainbow International Resources based in the British Virgin Islands, but online searches have failed to turn up any information. Readers are invited to post below any information they might have about the company or whether there’s been any progress on exploration.

The Burundi disappointment did not turn Southern Crown off Africa and REE, but Zambia did. It had been thwarted by the Zambian government putting a moratorium on its exploration licensing system which left the Australian company in limbo. On 30 March 2012, however, the Zambian government lifted the moratorium on the licensing system and stated it would commence approving new prospecting licenses and consider cancelling defaulting licenses. But Southern Cross was still seeking clarity over the removal of the invalid license over Nkombwa Hill. It was this, along with what it termed the cooling of the rare earth market and the general change in global economic conditions, that persuaded the Australians that Africa and REE were not for them. The company now plans to focus on gold and base metals.

But, offshore from Africa, there was an interesting development this week with news from Madagascar. Tantalus Rare Earths (FRA:TAE) signed a letter of intent with Rhodia to advance its clay deposit.

Libertas Capital in London commented that “ We have previously dismissed Tantalus, as we considered their Joint Ore Reserves Committee compliant inferred resource of 130 million tonnes (Mt) grading 0.08% Rare Earth Oxides (REOs), from their at surface Ampasindava project in Madagascar, as being too low grade to be of merit, even if 20% of the REOs are heavies (HREO’s)”. The company has argued that the largest producers of the more valuable HREO’s are in the southern China ionic clay deposits. The ability of these low-grade ores to release the REE through a simple low cost ionic exchange mechanism and to produce carbonate concentrates is the key to their attractive economics. Far lower REO grades can be viable in these types of materials than in hard rock REE deposits, the note said.

Libertas says the company has now received a major boost with a Letter of Intent (LOI) for technical co-operation for the development of an optimal process for REO extraction with Rhodia one of the major producers of rare earths. Rhodia, based in France, is owned by the Belgium chemical group Solvay (SOLB-Euronext). A definitive technical co-operation agreement and offtake agreement for up to 15,000 tonnes per annum of rare earth products could follow the LOI. The project is said to be low in uranium and thorium, so presumably transporting into France will not be a problem, said the Libertas note.

Meanwhile, the Japanese press is reporting that the country along with the U.S. and Europe has begun discussions with China as a preliminary move toward progressing their World Trade Organization complaint. This negotiation is required under the WTO framework for resolving disputes. Canada has also joined the discussions as an interested party even though it did not file a complaint.

Which may explain the item that appeared on RareMetalBlog this week from The Wall Street Journal saying that China’s Ministry of Industry and Information Technology had invited foreign companies to team up with local firms on rare-earth technology ventures, particularly on environment-friendly projects.

“The U.S.’s, Japan’s and Europe’s [capabilities] in environmental management, recycling, technology research and development of high-end applications are welcome in China,” ministry spokesman Zhu Hongren told an online news conference.

You can read the item on this site; all I can add is that China stands to gain from such a move. It shows willing to the WTO and, if any foreign companies fall for the ploy, then the Chinese get access to more technology.

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