A Canadian mining company vying to become one of the world's major producers of heavy rare-earth minerals says it's moving ahead with development of its Northern Quebec deposit after positive results from a prefeasibility study.
Quest Rare Minerals ltd. estimates total construction capital costs for development of its Strange Lake deposit at $2.57-billion, based on a minimum mine life of 30 years. It will be one of the world's largest and highest-grade heavy rare-earth mining projects and a planned processing facility in Southern Quebec will be North America's largest such operation, the company said on Wednesday.
Quest is in competition with other companies to be the first to get production up and running in order to take advantage of supply constraints resulting from Chinese restrictions on export of the minerals. The country is the world's top producer of rare-earth minerals and wants to guarantee supplies amid huge internal market demand.
Rare-earth metals are used in a wide range of products, including flat-screen televisions, smartphones, guided missiles and batteries for laptop computers and cellphones.
Heavy rare-earth metals are the rarest and fetch higher prices than the so-called "lights."
Matamec Explorations Inc. is among Canadian companies Quest is up against in the race to become the next big rare-earth-mineral producers.
Matamec has an exclusive agreement with a subsidiary of Japanese auto giant Toyota Motor Corp. to fast-track development of its Kipawa mine deposit in the Témiscamingue region of Quebec.
Toyota wants to secure a steady supply of metals needed for its hybrid and electric vehicles and reduce its reliance on China.
Quest says its hopes the encouraging results from its prefeasibility study will speed up discussions with potential strategic partners and customers for much-needed financial and technical commitments to the project.
It said it signed a letter of intent in July with TAM Ceramics of New York for the purchase of up to 24,000 tons of zirconia per year, 100 per cent of anticipated annual production.
"We are very pleased with the results of this prefeasibility study; our consultants have been conservative with the assumptions used and we are satisfied that the returns are very healthy for such a capital-intensive industrial plan," Quest president and chief executive officer Peter Cashin said.
"The Strange Lake project has the potential to provide an important base for establishing a major North American industrial sector, able to address the chronic [heavy rare-earth] supply deficit over a long period of time."