Galileo Resources PLC (LON:GLR) said that its 34%-owned Glenover rare earths project was “well placed to benefit” as prices of the minerals are boosted by the standoff between China and the US.
After China, which accounts for more than 70% of global output of rare earth minerals and supplies about 80% of the USA’s rare earths, made thinly veiled threats that it could restrict exports, Galileo chief executive Colin Bird said the geopolitical calm around the supply of rare earths “has now evaporated and the spectre again of a rare earth deficit, particularly, the heavy rare earths, is again emerging”.
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The Glenover project, located in South Africa’s Limpopo province, is an open pit mine with stockpiles of various grades of phosphate-bearing material containing varying amounts of rare earth elements.
The current resource estimate of the project has inferred stockpiles of 2.7mln tonnes plus a further 7.4mln tonnes in situ in the open pit at an average with 2.1% rare earth oxide and 18.8% phosphorus pentoxide
Bird said: “Galileo now intends with its project partner FerMinOre, to reappraise the market with the anticipation of improved rare earth prices, to restore value that temporarily left the project.”
Two options
Galileo noted that two advanced options for Glenover have been studied to move the project forward, one focusing on rare earth production with phosphate as a by-product and another for primary phosphate production and recovery of rare earths from the production tailings.
The first would require an initial capital investment US$233mln, while the second option’s ultimate objective would be to work with a major phosphate producer and then either develop the project in partnership or sell it in whole or part to the producer.
Negotiations to formalise the agreement are “on-going pending final phase pilot studies”, Bird said.
Galileo shares were up 3.5% to 0.56p on Wednesday morning.