Alkane considers staged development of Dubbo to lower costs

PERTH (miningweekly.com) – Rare earths developer Alkane Resources has flagged a modular construction at its Dubbo zirconia project, in New South Wales.

Since the release of the front-end engineering design study last year, Alkane has been working to reduce the expected $0.93-billion capital cost of the Dubbo project. The company said on Friday that significant capital cost reductions could be achieved by constructing Dubbo in two stages of 500 000 t/y each.

The staged approach would also allow Alkane to continue to develop and grow the market for its products, while allowing a smaller commitment by counterparties that could grow as the project matured.

The second stage will be built after the first has been successfully commissioned and customer relationships and revenue streams have been established.

Alkane on Friday revealed the preliminary conceptual cost estimates for each stage, with the first stage likely to cost A$480-million with construction targeted to start in 2017 and complete in 2019.

The second stage, which will bring capacity to one-million tonnes a year, will cost an additional A$360-million, with construction targeted to start in 2022 and finish in 2023.

Alkane said that it would now progress the engineering of the Dubbo project on the basis of this design, and would pursue financing on the basis of the improved business case.

The Dubbo project is expected to extract 19.5-million tonnes of rare metals and rare-earth ores from an opencut mine, at a rate of one-million tonnes a year.