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Alkane on track for zirconium and rare earths production
29/06/2012 - Alkane Resources says it's on track to bring one of the world's largest undeveloped zirconium resources into production by 2015. Kim Christian
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The minerals explorer, which has a market capitalisation of $300 million, is developing a zirconium and rare earths project near Dubbo in New South Wales.
The company says its capital expenditure is expected to reach about $1 billion during 2012/2013.
Alkane managing director Ian Chalmers told an investor briefing in Sydney that the ore body was remarkably uniform and the mine would last around 20 years.
"It's a very homogenous deposit," Chalmers said during a tour of the company's demonstration pilot plant at Lucas Heights on Thursday.
Zirconium is used in ceramics, and rare earth elements are used in high-tech consumer goods such as iPods and flat-screen televisions.
While the company says radiation levels at the site will be extremely low, it still expects to be targeted by anti-uranium protesters.
Alkane says the project is expected to generate revenue of $504 million and earnings of $308 million per annum.
Construction at Dubbo is expected to begin in 2013, subject to development approvals and an environmental assessment.
The project is expected to create 300 to 400 jobs in the construction phase and 200 jobs when fully operating.
In two weeks the company will hold a community forum in Dubbo to discuss any issues associated with the project, including concerns about radioactivity, noise and dust.
"We don't transport anything that's perceived to be radioactive," Chalmers said.
Alkane plans processing on site, but it does not plan to tap $8 million worth of uranium due to government regulations and public opposition.
Evaporation ponds for tailings will be on site.
About 39 per cent of revenue would come from zirconium, with 22 per cent from niobium. The rest will come from a combination of light and heavy rare earths.
Each element is in increasingly scarce supply, with China and Japan declaring zirconium a strategic metal.
China, which controls about 97 per cent of the world's rare earths, has imposed quotas on its exports.
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