St George sees Brazilian rare earths upside from China export bans

St George Mining plans to start a maiden drill program within weeks focussing on expanding its 40.64-million-tonne rare earths mineral resource estimate from early April for its Araxá project in Brazil.

The company’s combined resource estimate came in at 41.2Mt and 0.68 per cent niobium pentoxide and 40.6Mt and 4.13 per cent total rare earths oxides (TREO).

Translated to metal tonnages, the estimate comprises a globally significant deposit containing more than 280,000t of niobium pentoxide and 1.7Mt TREO, which are both in high global demand.

Mineralisation at the Araxá project is comprised of rare earths, niobium and phosphate. The rare earths and niobium hits are near-surface, due to the lateritisation and enrichment processes caused by Brazil’s tropical climates, while the phosphate mineralisation increases at depth.

Most significantly, the entire carbonatite-hosted resource at Araxá lies within a soft, free-dig weathering profile and is mostly within 100m vertical depth below surface.

These key features render the deposit highly amenable to an open pit mining operation, offering St George strong potential to rapidly advance the project to commodity delivery, subject to mining studies.

St George says considerable resource expansion potential exists laterally, below the current limits of drill testing, and in fresh rock below the weathered zone. Neither area has been comprehensively tested and was not included in the resource estimate.

The company’s initial resource estimate is based on historical exploration in 2011 and 2012 by MBAC Fertilizer Corporation, now known as Itafos Inc, which included 67 diamond holes for a total of 3764 metres.

Drilling was confined almost exclusively within the weathering domain to a maximum depth of 200m and an average 60m.

More than 80 per cent of the drill holes tested within 60m of surface, leaving deeper mineralisation potential underexplored.

St George says broader geopolitical and trade developments have also highlighted another layer of potential for Araxá – the project’s strategic importance.

China is the world’s biggest rare earths supplier and produced 70 per cent of the world’s supply of rare earths in 2022. However, the nation recently disrupted global supply chains by imposing export restrictions in the wake of United States president Donald Trump’s trade war.

Australian miner Lynas Rare Earths currently operates the biggest hard rock rare earths mine outside China. Lynas’ Mt Weld mine, 35 kilometres south of Laverton has a 106Mt total resource at 4.1 per cent TREO. Lynas began shipping ore from Mt Weld to its LAMP facility in Malaysia in 2012 and a year later the LAMP facility began production.

St George says Araxá compares favourably with Mt Weld and other world-class hard-rock rare earth projects, including the Mountain Pass mine in the US, which is now owned by MP Materials.

The company believes its well-founded rare earths resource at Araxá – already among the handful of biggest and highest-grade hard rock rare earths deposits in the world – offers a potential alternative source of supply of highly sought-after rare earths products.

China’s increased restrictions on the export of rare earths and permanent magnets have significantly disrupted the global supply chains for these commodities, which are critical to a wide range of sectors including defence, electric vehicles, energy, smartphones, robotics and medical equipment. This development is evidence that single-source supply chains are a risk, from China or anywhere else. The need for a sustainable rare earths industry outside China has never been stronger.

Inspired by the heightened sense of opportunity, St George envisions a drilling program to expand its current shallow resources and will undertake additional lateral extensional and deeper drill testing within weeks.

It is also conducting comprehensive metallurgical test work and has a program underway to determine flowsheets for potential commercial production of both niobium and rare earths from Araxá, which will help the company determine an optimal plant design.

The work is being undertaken in collaboration with two leading scientific agencies in Brazil under a technical collaboration agreement with St George.

As a result of recent frenetic exploration for rare earths in the prospective parts of the country, especially in the state of Minas Gerais, Brazil is rapidly coming to the fore in its identification of rare earths deposits and has already identified significant reserves, which currently amount to about 30 per cent of global reserves.

The tier 1 mining state is widely known as mining friendly and, historically, for its mineral wealth, particularly iron ore, gold, and lithium and more recently, rare earths and niobium from both carbonatite hosts and clay-hosted deposits which are being extensively explored.

Brazil’s current rare earths production is extremely limited, however, with only about 20t of rare earth oxide equivalent produced last year. This represents a big drop from the previous year’s 140t and is just a tiny proportion of the estimated 300,000t of global production.

St George says the Araxá project presents a welcome opportunity for Brazil to address its currently limited production.

Araxá contains a high proportion of the important neodymium and praseodymium rare earths, with a combined grade of 7,800 parts per million containing 320,000t of combined ore.

This significant endowment highlights the project’s potential to become a key neodymium and praseodymium source to permanent magnet manufacturers in Brazil and elsewhere.

St George is participating in Brazil’s MAGBRAS Initiative to set up the nation’s first permanent magnet manufacturing facility. The initiative includes major end-users such as giant automaker Stellantis and other emerging local rare earths producers.

St George could also leverage the region’s long history of commercial niobium production to take advantage of its current 280,000 tonnes of contained niobium pentoxide.

High-grade niobium mineralisation begins at surface and St George has identified more than 500 niobium intercepts carrying grades of up to 8 per cent niobium pentoxide.

St George has negotiated government support for expedited project approvals and has assembled an experienced in-country team. It has also established relationships with key parties and authorities in Brazil to drive the project through exploration and development.

Araxá has a total JORC resource of 40.64Mt at 4.13 per cent TREO, which shows the potential value upside as the company progresses through its development studies and resource expansion program to prove up a commercial rare earths mining operation.

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