Export Finance Australia Confirms Interest in Dubbo Project Financing

Australian Government-owned’ Export Finance Australia (EFA) has confirmed interest in financing Alkane Resources’ (ASX: ALK) Dubbo rare earths Project, stating it closely aligns with the recently announced initiative by the Australian Government to develop its “Critical Minerals” sector.

Alkane through its wholly-owned subsidiary Australian Strategic Materials (“ASM”) has been engaged with the Australian Government for many years, but particularly in recent months as it works to assist private business in developing Australia’s “Critical Minerals” sector.

Alkane’s Managing Director, Nic Earner, said “After extensive engagement with the Australian Government, particularly recently as part of its Critical Minerals initiative, it is pleasing to see that stated support is translating into preparedness for government agencies to act, in this case with EFA providing confirmation of its interest in being part of the financing consortium for the Dubbo Project.”

ASM’s Managing Director, David Woodall, said “It is very pleasing to see positive action by EFA. I look forward to continuing ASM’s discussions with strategic partners and offtake parties, particularly with the ongoing trade support and now potential financial support from the Australian Government. It is very clear in today’s world that security of supply chains in all manner of materials is a pressing issue, and security of Critical Minerals is one supply chain that the Australian Government is clearly identifying as a priority for government backing.”

The Dubbo Project is an advanced polymetallic project with large in-ground resource of zirconium, hafnium, niobium, yttrium and rare earth elements with a potential mine life of 75+ years. This polymetallic project is a potential strategic and independent supply of critical minerals for a range of sustainable technologies and future industries.

The Dubbo Project is development-ready, subject to financing, with the mineral deposit and surrounding land acquired, all major State and Federal approvals in place and extensive piloting and engineering completed.

The ASX announcement can be found here.

Climate change action depends on supply of critical elements

To prevent catastrophic climate change, we must rapidly reduce emissions of carbon dioxide and other greenhouse gases, replace fossil fuels with clean, renewable energy sources and make much more efficient use of resources.

A critical point is that these urgent tasks cannot be achieved unless we have a secure supply of elements essential to advanced technologies for clean energy, transport and manufacturing: rare earths, hafnium, zirconium and niobium.

To mitigate climate change, we need rare earths (RE) for:

  • permanent magnets in wind turbines, eliminating the need for gear boxes, thereby improving reliability, which is particularly important for off-shore wind power generators. RE magnets also facilitate larger wind power generator designs.
  • permanent magnets in electric motors
  • electric motors and electronic control systems for solar power generation
  • nickel-metal (RE alloy) hydride batteries for electric and hybrid vehicles and rechargeable electronic devices
  • energy efficient lighting (fluorescents and LEDs)
  • energy efficient communication through fibre optic signal amplification
  • hydrogen storage alloys for clean transport and energy
  • ceramics for hydrogen fuel cell vehicles and power generation, and
  • catalytic converters to reduce harmful emissions in exhaust gases.

Applications of hafnium and/or zirconium that help to mitigate climate change include:

  • efficient microelectronics, capacitors and computer chips and memory devices
  • solid oxide membranes for clean metal production
  • nuclear power fuel assemblies and construction materials, and
  • gas sensors of all types.

Niobium enables the construction of robust, safe structures using less steel. In the transport sector, this produces better fuel efficiencies and lower carbon dioxide emissions.

To act on climate change, we must secure a supply of these essential elements that is:

  • sustainable and traceable
  • not monopolised by any single nation or bloc
  • designed for complementary sourcing of other essential materials and
  • has the potential for ‘urban mining’ (i.e. recycling materials from technology at the end of its useful life).

The world-class Dubbo Project in NSW, Australia, meets these criteria and can supply these essential elements for decades. To progress the Dubbo Project to construction, Alkane Resources seeks a blend of financing from export credit agencies, strategic partners and equity and debt markets. Information for investors is available here

Further reading:

https://setis.ec.europa.eu/sites/default/files/reports/JRC-report-Critical-Metals-Energy-Sector.pdf

Advanced defence technology depends on Dubbo

To monitor threats and defeat hostile actions, we expect advanced defence forces to deploy – increasingly by remote control – high-performance machines and systems that can withstand extreme environments, including space. Producing these advanced technologies requires a sustainable supply of critical materials: rare earths, zirconium, hafnium, and niobium.

The United States, Japan, Korea, and European nations already rely heavily on these essential materials for military and civilian technologies, and demand is growing as applications expand. Of concern for those nations, one country – China – dominates rare earths supply and the Zirconium market.

Luckily, Australia’s mineral resources include a wealth of these critical elements. This presents a strategic opportunity to expand Australia’s role in global security, while sustaining economic wellbeing by adding value to our raw resources.

The elements of defence

Rare earths are a group of 17 elements, known as the ‘vitamins of industry’ because many applications require only minute – but essential – amounts. Permanent magnets are an exception, being composed of ~31% rare earths. Permanent magnets have multiple applications in advanced technology, including electric motors and guidance systems for vehicles, submarines, drones, missiles and robots. China controls 85% of the rare earth permanent magnet supply chain.

Rare earths, zirconium, hafnium and niobium are essential to the production of electronic sensors, and microprocessors in smart devices and computers. These elements are used for heat resistant alloys and coatings for aircraft, spacecraft, missile and rocket engines, as well as in armour for personnel and vehicles.

Alkane’s Dubbo Project is a large in-ground resource of rare earths, zirconium, hafnium and niobium, and the most advanced project of its kind outside China, with a potential mine life of 75+ years. Given the numerous high-tech applications of these elements in defence and beyond, the strategic importance of developing this project is clearly high. Delaying development risks further disruption of supply from China and a missed opportunity for Australia.

Adding value multiplies benefits

We can take lessons from China in extracting maximum economic and social benefit by adding value to our raw resources. My colleague Alister MacDonald has previously explained how the ‘dig it and ship it’ (and buy it back in processed form at retail prices) mentality of the old Australian economy must change to ‘dig it, process it, use it and ship it’. The Dubbo Project goes far beyond mining, by processing materials to standard and customised specifications, delivering advanced products for global markets.

Downstream processing of critical elements – transforming oxides to metals, advanced alloys, and other materials for defence or other applications – requires a skilled workforce of scientists, engineers, and technicians. In tandem with resource development, Australia must plug the ‘brain drain’, invest in education and training, and build our IP portfolio.

By adding value along the supply chain, Australia will create new, sustainable enterprises that will generate employment, reduce our dependence on imported products, and build national security. Technologies developed for defence will transfer to new and improved products and services for civilians. GPS navigation and drones are examples of military technologies applied to everyday life.

The first step is to invest in the source of this future wellbeing. To progress the Dubbo Project to construction, Alkane Resources seeks a blend of financing from export credit agencies, strategic partners and equity and debt markets. Information for investors is available here

Hafnium Product Breakthrough Consolidates Dubbo Project Business Case

  • Alkane’s wholly owned subsidiary, Australian Strategic Materials Ltd (ASM), has developed high-purity hafnium dioxide products tailored to meet market requirements.
  • Hafnium oxide exceeding 99.8% HfO2, and 99.9% (Hf+Zr) O2, has been produced using a proprietary process to separate hafnium from zirconium at the demonstration pilot plant at ANSTO.
  • Over the past 12 months, ASM has consulted extensively with industry to confirm growing market demand for high-purity hafnium, which currently depends on supply from the production of zirconium metal for specialty alloys and the nuclear industry.
  • Global shortage of hafnium anticipated as demand is poised to outstrip current supply.
  • Hafnium metal for super alloys is currently trading in a US$800 ‐ $900/kg range. The ASM business case assumes a conservative product price of US$500/kg for its oxide.
  • ASM will initially produce 25tpa hafnium to meet projected market demand, ramping up to higher quantities as required.

Read more.

ASM