Rare earth elements have recently become the one of the hottest exploration targets. The number of juniors seeking REEs seems almost as great as those hunting for gold particularly in Quebec. The most advanced junior is Canada Lithium that is preparing to start construction at its Quebec lithium mine near Val d’Or, QC, later this year.
Part of the frenzy is fuelled by the need for REEs in advanced electronic applications. Another driving force is the use of lithium in batteries for electric cars. Another is the fact that most of the world’s supply of REEs comes from China, and Westerners are distrustful of the emerging economic powerhouse.
Japanese scientists recently published a report outlining large deposits of REEs on the seabed of the Pacific Ocean. They recovered mineralized mud from depths of 3,500 to 6,000 metres below the surface at 78 sites from Hawaii to Tahiti. Samples from one-third of the sites assayed high levels of REE and yttrium. Processing would be simple – pump the mud to the surface and run it through a ship-borne acid leach plant.
Scientists speculate there may be 80 billion to 100 billion tonnes of mineralized mud, compared to 100 million tonnes of REE resources estimated by the U.S. Geological Survey.
Before CMJ readers start rowing across the Pacific hoping to cash in on the next sure thing, be aware that mining the seafloor is not as easy as it sounds. Nautilus Minerals of Toronto has been exploring high grade massive sulphide deposits on the seabed near Papua New Guinea since 2005. So far 870,000 tonnes of indicated resources grading 6.8% Cu, 4.8 g/t Au, 23.0 g/t Au and 0.4% Zn have been outlined at the Solwara 1 project. The inferred resource is 1.3 million tonnes grading 7.5% Cu, 7.2 g/t Au, 37.0 g/t Ag and 0.8% Zn. Mining would be accomplished using a seagoing vessel.
Canadian miners have the needed expertise when it comes to processing massive sulphide ores. They follow the rules when applying for permits. Nautilus is on track in this respect. The PNG government has granted it a deep sea mining lease and an environmental permit. The government has an option to earn up to 30% of the project. Teck Resources and Anglo American have also bought in.
More difficult is the engineering of the ship and pumping technology. Because the equipment is not readily available, it is expensive, expected to be US$167 million. The vessel will house generator sets producing 30 MW of power for the vessel, seafloor production tools and associated pumping machinery. It will have on-board accommodation for up to 160 people, including 30 maritime crew. The vessel is to be built at a German shipyard.
Be warned, however, seafloor mining carries significant unknowns, and investors are aware of this. Nautilus announced in late May it was launching a public offering to earn up to C$150 million for Solwara 1. Two weeks later, the company withdrew its offer due to “weak financial market conditions.”
Seabed mining is still in its infancy. Perhaps in the future, decades in the future, it will be economically feasible. No one doubts that Davy Jones Locker holds a treasure chest of untapped mineral resources, and Canadians will be at the forefront of their recovery.