Perth-based mineral explorer Krakatoa Resources (ASX: KTA) has acquired an exploration licence application over an area considered highly prospective for rare earth elements (REE) in Western Australia.
The company today announced its acquisition of a 100% interest in Mt Clere rare earth project, with the licence expected to be granted within five to nine months.
The project covers a 403sq km area about 200km northwest of Meekatharra in WA’s Gascoyne region.
It is considered prospective for three REE deposit styles: monazite sands in vast alluvial terraces; Chinese-type ion adsorption clays in extensive laterite areas; and carbonatite dyke swarms.
The primary exploration target is monazite, which is an important ore for thorium, lanthanum and cerium, though, most monazite also contains additional uranium, calcium, strontium, silica and lead, and sometimes sulphur.
While awaiting the grant of the exploration licence, Krakatoa said it would immediately begin compiling historical exploration data and undertake non-invasive groundwork including mapping and sampling.
The area was explored in the late 1980s by mining giant BHP (ASX: BHP), with sampling delineating numerous highly prospective areas for thorium and REE mineralisation.
This included substantial monazite (exceeding 50%) found in more than 20% of pan concentrate stream sediment samples.
While exploring the western portion of the Mt Clere project for diamonds in 2005-2006, Astro Mining also confirmed “extraordinarily high” monazite (up to 48%) in heavy mineral concentrates.
In 2006, another explorer All Star Minerals collected two large samples of alluvium to produce a heavy minerals concentrate. Laboratory analysis of the two samples respectively returned 3% and 2% monazite, as well as 1.4% zircon, 40% and 44% ilmenite, 9.9% titanium, 0.46% cerium, 0.25% lanthanum and 0.12% thorium.
Australia to replace China as REE supplier?
REEs, which are crucial to military and other high-tech industries, are a key aspect of the United States’ trade war with China.
China is currently the dominating producer of the minerals, accounting for around 90% of global REE processing capacity, and has threatened to place an embargo on its export to the US.
This makes it an opportune time for Australia to push development of REE projects to counter China’s grip on the market.
According to the US Geological Survey, Australia holds only 2.8% of the world’s REE reserves but accounts for more than half of the new projects in the global pipeline.
These include WA projects such as Hastings Technology Metal’s (ASX: HAS) Yangibana project, which is gearing up for production in late 2021, and Northern Minerals’ (ASX: NTU) Browns Range rare earth carbonate pilot plant.
In addition, Australia’s Lynas Corporation (ASX: LYC) operates the Mount Weld mine in WA and refines its production in a Malaysian plant, making it the only REE producer with no ties to China.
The main reason REE projects haven’t advanced outside of China so far is because they can’t compete on cost due to China’s vast production and cheap labour. However, this may not be a challenge in the future if China does impose an export ban on the US.