Altona Rare Earths CEO Cédric Simonet wants to sell minerals from the company’s Mozambique project to Western and Japanese markets rather than China.
A trend towards African countries adding more value to their rare earth elements means China will have to accept that it cannot dominate global refining, Altona Rare Earths CEO Cédric Simonet tells The Africa Report.
Altona has a rare-earths mining project at Monte Muambe in Tete province in northwest Mozambique. Simonet took over as head of the London-listed company in June. In addition to the mining project, Altona and Mozambique’s government are exploring the possibility of developing a rare-earths processing facility.
Rare earths are needed for applications including the permanent magnets used in electric vehicles and wind turbines. Global reserves are estimated at 130 million tons, with China the largest single holder with 44 million tons. The country also accounts for about 90% of global processing.
China will have to accept that African countries will refine their rare earth deposits, Simonet says. The company plans to target Western and Japanese markets in preference to China. Mozambique’s government, he says, supports all forms of in-country added value, but China “has never encouraged value addition in-country. It’s a very important parameter.”
The global market for rare earths, Simonet predicts, will become more integrated and with the dichotomy between Chinese and non-Chinese value chains being reduced. The process will take time, but has already started, he argues. “Non-Chinese value chains are now developing.”
Altona in September released its first JORC-compliant mineral resource estimate for the Monte Muambe project. The estimate is 13.6 million tons at a Total Rare Earth Oxide (TREO) rate of 2.4%, which the company says is in line with its expectations.
Environmental impact
Much of China’s rare earth, both domestically and imported from Mongolia and Myanmar, is artisanally mined and does not meet responsible sourcing standards, Simonet says. Rare-earth mining in the Bayan’obo district of Inner Mongolia, an autonomous region of China, supplies half the world’s rare-earth elements.
According to a report from the environmental news platform Mongabay, each metric ton of rare-earth element mined there means clearing 300 square metres of vegetation and topsoil while releasing 1,000 metric tons of contaminated wastewater and 2,000 metric tons of solid or liquid waste tailings.
In April this year, Chinese companies mining rare earth minerals in Myanmar’s Kachin state promised to halt activities after residents protested against the environmental damage caused. Simonet predicts that there will be a “price premium” for responsibly sourced rare earths, and points to improvements in the sourcing of gemstones and diamonds as a path that will be replicated.
Altona’s scoping study is planned for the third week of October. That, Simonet says, will open the door for discussions with potential partners for both the mining operation and the possible processing facility.
The Monte Muambe project area is 30km from a major tarred road linking Mozambique to Malawi and has railway access to the port of Nacala. Beira port is also a distribution option, Simonet says. The extremist Islamic insurgency in the northeast of the country, he says, is about 900km away from the project in the northwest and is not seen as a risk. “We’re really not worried about the security situation in Mozambique.”
In terms of building the mine, all possibilities are open, including Altona going ahead by itself. The processing options are to build a plant at, or near, the Monte Muambe site, or to locate it near one of Mozambique’s ports. The calculation to be made, Simonet says, is whether it is more efficient to move chemicals to the site for processing use, or shift bulky unrefined minerals to port.
The Africa Report
