Good article from today.
hTTps://ec.europa.eu/commission/presscorner/detail/en/STATEMENT_22_5523
“Lithium and rare earths will soon be more important than oil and gas. Our demand for rare earths alone will increase fivefold by 2030. […] We must avoid becoming dependent again, as we did with oil and gas. […] We will identify strategic projects all along the supply chain, from extraction to refining, from processing to recycling. And we will build up strategic reserves where supply is at risk. This is why today I am announcing a European Critical Raw Materials Act.” ...
A report published last year by the UK producer Less Common Metals on behalf of the Government’s Automotive Transformation Fund concluded that “given the complexity of magnet production technology and the need for detailed know-how, enticing an existing global magnet producer to set up a facility in the UK may be an effective way to establish domestic production.”
Atherley is upbeat about the UK’s manufacturing prospects. “The two biggest assets this country has got right now are chemical parks and bad weather,” he says alluding to the opportunity for manufacturers to plug in their processes at industrial parks like Saltend and Wilton and power their operations with offshore wind. “I think that combination is very powerful.”
“It doesn’t require any particular licences at this point in time. The proprietary information is along with the extractants and the vendors of those extractants. And then obviously there is a lot of experience associated with how to run these units effectively in the process control. That comes down to experienced operators and personnel.”
George says he has recruited experienced engineers for every stage of the process. And independent experts have reviewed the overall process flow sheet to show it has low processing risk that has helped secure financing.
Future plans for Saltend
The first phase of Saltend involves separating out neodymium and praseodymium oxides used in magnets for turbines and EVs that will produce more than 90% of the revenue; lanthanum and cerium which are both used in refining and automotive catalysts and batteries; and mid and heavy rare earth elements including terbium and dysprosium that make up around 0.01% of the overall product and are used in magnets and defence applications.
Pensana has ensured there is enough space around its initial operation to expand into heavy rare earths production, and take a step further down the magnet production supply chain to build an alloying plant. George says they’ve also left room to build a recycling operation for used wind turbines.
Pensana
Pensana Chairman Paul Atherley and UK Business Secretary Kwasi Kwarteng broke ground on the Saltend facility in July
Following warnings that the UK is particularly vulnerable to disruption to supplies of key minerals needed for green tech and heavy industry, the Government has launched a critical materials strategy to bolster domestic production and build a skills base. It has also established a Critical Minerals Intelligence Centre to help the country and its industries secure supplies. The centre’s assessment of 26 materials found that 18 have high supply disruption risks that leave the UK economically vulnerable. China is the leading producer of 16 of the minerals assessed. For those which the UK was found most vulnerable, China produces 90% of the world’s gallium, 78% of rare earth elements, and 79% of silicon. South Africa produces 71% of all platinum.
Per Kalvig of the National Geological Surveys for Denmark and Greenland, one of the commentators who questioned Pensana’s capabilities, has published a 225-page report on the rare earths sector covering processing technologies, supply chains and forecasts of future demand. Among the report’s conclusions, Kalvig projects that supplies of praseodymium and neodymium will fall 50% short of demand by 2030 and that the West will fail to achieve self-sufficiency.
Pensana recognises the risks of having its feedstocks come solely from Angola so within five years plans to have 50% of its feeds coming from elsewhere. With no existing magnet manufacturer in the UK, Pensana is in discussions to sell around 50% of its oxides to a non-Chinese Asian magnet manufacturer.
Pensana will export the rare earths sulfate to its processing hub at the UK’s Saltend chemicals park. In July, the company held a ceremony to break ground at the site with UK Business Secretary Kwasi Kwarteng, which coincided with the launch of the Government’s strategy on critical minerals.
“We’re the insurance if China doesn’t have enough rare earths to feed the growth in the West over and above what its own consumption will be,” George says.
The key production steps at Saltend begin with caustificaction of the Angolan sulfate product followed by oxidative drying of the solids to enable removal of the majority of lower value cerium as a lower-grade insoluble byproduct during the subsequent hydrochloric acid redissolution step in preparation for solvent extraction.
This involves three distinct circuits, which use several hundred mixer-settler rigs to separate the mixed rare earths, dropping out mixed mid/heavy rare earths; then high purity lanthanum and cerium as carbonate products; then extraction of the high-value neodymium and praseodymium for conversion to an oxide product.
George added: “I won’t get into the complexities of the recycling and the process control on those because that is where the real art is. But essentially there would be a repetitive number of large tanks, one end of which is a mixer rig which allows introduction of both aqueous and organic phases to be interacted with each other, flowing through a series of baffles into a settling area which then disengages the organic from the aqueous phase once the extraction has occurred. And then into a counter current pumping mechanism where the aqueous phase flows upstream and organic flows downstream, simplistically put, from one mixer-settler to the next to build up and deplete the respective concentrations of what you’re trying to separate at different pHs using different extractants.
“This is particularly where the chemistry is interesting because the rare earths are obviously close together in terms of behaviour so very subtle pH changes and respective concentrations is what are used to separate them out on an individual basis. That’s where the clever stuff comes in, in terms of process control.”
In its coverage of the plans, the FT has quoted experts questioning whether Pensana has the experience necessary to develop the plant and meet its stated production targets.
George says: “Normally, these types of projects take close to a decade to bring to reality and we’ve done it in a manner of three of four years since the geological work was originally done. The consequence of that is I’m sure there are quite a lot of people who are surprised at how swiftly it’s got to this point.”
He says the company has deliberately kept its cards close to its chest in terms of capabilities and process design but he’s bullish about the engineering and his team.
A good article
hTTps://www.thechemicalengineer.com/news/uk-set-to-host-rare-earths-processing-hub-in-push-for-cleantech-security/
The Saltend processing plant is set to start production in 2023
THE UK is set to host a new US$195m rare earth processing hub that Pensana is building at the Saltend chemicals park on Humberside. It will become one of only three such facilities operating outside of China and comes as the UK has launched a new strategy to shore up supplies of the critical materials needed for the energy transition.
The facility is set to begin operations in 2023, and when it reaches full capacity in 2024 will produce 12,500 t/y of separated rare earths including around 5,000 t of neodymium and praseodymium oxides. These are essential components of the magnets used in electric vehicle motors and wind turbine generators.
Pensana Chairman Paul Atherley said: “Our Saltend rare earth processing hub will be the world’s first independent and sustainable rare earth separation plant, with plans to produce 5% of the global magnet metals in 2024. This will play a vital role in transforming the UK’s EV and offshore wind industries, as well as creating high value local jobs in the Humber region.”
In May, Pensana published findings from its FEED and value engineering study. It reported that by 2024, the site is expected to be one of only three significant producers outside of China, along with the Lynas facility in Malaysia – which produces around 5,500 t of neodymium and praseodymium oxides – and the MP Materials facility in the US that is planning to produce around 6,000 t. Production and processing of rare earths is currently dominated by Chinese firms which meet around 90% of demand. Pensana aims to differentiate itself in the market by promoting the low carbon footprint of its products, produced using hydroelectric power in Angola and wind power in the UK.
The art of extraction
The production process begins at Pensana’s open-cast Longonjo mine in Angola. Here, an ancient volcano that has been weathered for the past 100m years is the source of a mineral called monazite that contains rare earths. An on-site processing plant mills the rock and uses a series of flotation steps to recover and concentrate the rare earths-rich monazite.
“We take that monazite concentrate, which is about 10% of the original feed, and expose it to a sulfuric acid mix and calcining process which then allows the separation of the rare earths from the host rock matrix,” says Pensana CEO Tim George.
“That then allows a dissolution of the rare earths compounds and separation from the balance of the monazite minerals which then we precipitate selectively into what we call a mixed rare earths sulphate.”
The processed ores naturally contain radioactive elements, which Pensana says it will store in tailings dams in compliance with IAEA regulations.
The following link is worth a read. Not sure it has been posted before. I have copied part of the text but ran out of characters for this message.
masterinvestor.co.uk/commodities/two-footholds-in-the-rare-earths-industry/
In the UK, the most advanced of these hopefuls planning a ‘integrated’ REO supply chain appears to be Pensana Rare Earths (LSE:PRE) which was tipped last November by a Sunday paper as one of four shares to benefit from the spur to the industry to be given by the then pending COP26 convention.
That came on top of Chancellor Sunak’s £3.2bn commitment to support UK electric vehicle manufacture (eg Nissan’s planned £1bn EV hub, and Ford’s £230m plant) and to boost wind power by 40GW (requiring 8bn kilos of Neopraseodymium oxide.)
PRE’s shares’ minor spurt on that news didn’t last however, just as a broker tip a few weeks before had little effect, and the reason, of course, is that funding, originally expected by the end of 2021 for the two parts of Pensana’s project, is still awaited.
It could, however, be near, in which case PRE could be the first of this fledglingsector’s shares to take off, provided as always that the funding terms are seen to be as attractive to shareholders as they will be to the funders. Because it isn’t possible here and now to judge that, I’m merely suggesting that investors keep a close eye until the prospect becomes clearer.
Pensana started life as an Australian listed company with a rare earths discovery at Longonjo in Angola, and listed on LSE in July 2020 with 188.3m shares at 20p – but raised no funds. Its intention was to find partners to develop Longonjo, but it was not until October that year, after establishing its belief that Longonjo (with a fresh discovery nearby) is potentially one of the world’s largest rare earth deposits, that Pensana announced it would study the potential for a separation plant in the UK. That, of course, spurred the shares on an upward track, and although speculative, illustrates the potential investor interest.
At that stage, bringing Longonjo on stream was estimated to cost $130m, and subsequently in April 2021, PRE published a business plan “to seek to establish, subject to funding, a world-class, independent and sustainable supply chain of the rare earth metals vital for electric vehicle, wind turbine and other strategic industries” . That, of course, persuaded shareholders with good profits to sell in anticipation of the necessary funding.
PRE’s plans now are to build its rare earth separation facility at Saltend in The Humber free trade zone, with a target annual production of c 12,000 tonnes of rare earth oxides, including 4,500 tonnes of magnet metal rare earth oxides (“NdPr”), which would represent approximately 5% of 2025 projected world demand and be one of only three key producers outside China. The plant would cost $125m in addition to what had grown to be the $270m cost at Longojo from where it would import concentrate...
Interesting article below where it mentions almost half of Tesla's vehicles sold in Q1 were Lithium Iron Phosphate batteries - a cheaper rival to Nickel and Cobalt batteries that dominate in the West.
Just as well we have the Iron and Lithium covered!!
reuters.com/business/autos-transportation/iron-man-elon-musk-places-his-tesla-battery-bets-2022-04-27/
Pensana mentioned in video around 4:20
hTTps://www.news18.com/videos/ivideos/how-xi-jinping-is-weaponising-rare-earth-elements-how-us-led-aukus-can-counter-chinas-dominance-4574804.html
All things being equal, we can expect a boost to out share price on Monday.
hTTps://www.dailymail.co.uk/money/investing/article-10248917/MIDAS-SHARE-TIPS-Rare-metals-earphones-Try-Rainbow.html
This should all help the financials.
https://www.globaltimes.cn/page/202111/1238808.shtml
Ford have just been awarded a £25-30M grant for electric cars at the Halewood factory. Could the rise today mean there has been a leak on a potential Pensana grant or just take building by some entity?
Tomorrow is the anniversary of the RNS below. Maybe we will get an update tomorrow...
https://uk.advfn.com/stock-market/london/cadence-minerals-KDNC/share-news/Cadence-Minerals-PLC-Amapa-Update/83042139
I was reading somewhere (probably this board) that a contingent of investors from China were looking around Santana port, docks and infrastructure such as the railway.
Assuming we get our 20 - 27% (and like most others on here, just see it as a matter of time) I would expect we would have no problem getting financing from numerous sources as well as particular interest from China in perhaps taking an equity stake at some point so as to secure resources in the future.
If/When we get the news, I hope like others that the share price will double/triple but as others have mentioned this could still go a lot further. It could make sense (as others have mentioned) to take some profit but also to stay invested for the medium term.
Is it just me or does it feel like a Friday.
I think the calculation is much simpler based on the RNS
For each tonne of gypsum there are $123 of rare earths at current prices. So the calculation is:
38,300,000 * 123 = $4.7B = £3.3B
So there are £3.3B of rare earths in the gypsum. We have 70%, so the value of our share would be £2.3B
Our market cap is £67M
All - I have seen a number of possible valuations here assuming we get the 20%/27% stake. Can someone comment on my rough figures? I have assumed the worst case scenario and am only looking at EMH, BCN and Amapa...
KDNC at 30p is valued at £45M GBP (give or take). So a KDNC share price of 1p would be £1.5M value
- EMH is valued at £151M of which we have a 10% stake, so £15M GBP - equivalent to 10p of the KDNC share price
- BCN is valued at £225M (of which we are a 30% joint partner on the Fleur Lease)
- 8.8Mt of LCE resource at Sonora of which 0.9Mt attributable to KDNC. (so 10% of the resource)
- Does that mean our valuation of BCN is £22M so the 10% of the resource (or 30% of it, so say £7m GBP)?
- If our valuation of BCN is £7m then that is approx 5p of the KDNC share price
- If our valuation of BCN is £22M then that is approx 15p of the current share price.
So EMH+BCN = 15p of KDNC share price or 22p of the KDNC share price (depending on BCN valuation)
Lets look at Amapa. Worst case scenario is impaired EV is $600M. I know that we should really take the un-impaired value and iron ore prices are significantly higher but worst case scenario...
20% of DEV is $120M so £86M = 57p share price of KDNC (Amapa assets only)
27% of DEV is $162M so £115M = 77p share price of KDNC (Amapa assets only)
So worst case scenario:
At 20% of Amapa with BCN only worth £7m - We have 57p (Amapa) + 10p (EMH) + 5p (BCN) = 72p share price
At 20% of Amapa with BCN worth £22m - We have 57p (Amapa) + 10p (EMH) + 22p (BCN) = 89p share price
At 27% of Amapa with BCN only worth £7m - We have 77p (Amapa) + 10p (EMH) + 5p (BCN) = 92p share price
At 27% of Amapa with BCN worth £22m - We have 77p (Amapa) + 10p (EMH) + 22p (BCN) = 109p share price
If we get 20% of Amapa then we will get 27% as a done deal.
Any thoughts? Again this I see as worse case scenario if we get the Amapa deal over the line.
First time I have posted on LSE, normally used ADVFN but the KDNC thread is very quiet there. Like everyone waiting for some positive news.
Not sure it has been posted before but thought I would include the google maps co-ordinates for Amapa. The satellite picture has quite good clarity and you can see all the buildings from the picture in the Cadence presentation. For some reason google maps calls it the Tucano mina but this is a gold mine just to the north of our (hopefully) mine.
Also if you follow the route R. de Paz back to the Rio Amapari river and magnify the image you will see what looks like more stock piles and the train carriages. I imagine this is the end of our train line. Looks like they move the iron ore to this location from the mine and load it onto the train for sending to Santana.
hTTps://www.google.com/maps/@0.8162033,-51.8690634,595m/data=!3m1!1e3