Pele Mountain Resources to develop rare earths processing centre
Demand for rare earths is increasing as they are used in many high-tech products including electric vehicles and wind mills
TORONTO—Pele Mountain Resources Inc. has entered a Memorandum of Understanding (MOU) with Chinese investment company Sheng Kang Ning (SKN) to develop rare earth processing facilities in Elliot Lake, Ont.
The facilities will be located at Pele’s Eco Ridge property, and will process imported monazite.
Sheng Kang Ning (Shanghai) Mining Investment Co. Ltd. (SKN) owns proprietary technology for environmentally sustainable processing of rare earths. They also have experience in the design, construction, and operation of processing facilities.
A number of proposed terms are set out in the MOU. Among them, SKN will own 50.1 per cent of the joint venture and Pele will own 49.9 per cent. SKN’s processing technologies will be used for the project, pending approval of Chinese authorities. A portion of Pele’s land will be leased to the joint venture for construction of the facilities. SKN will design and construct the facilities, or nominate a qualified third party. Lastly, SKN’s duties for operating the facility will be set out in the definitive agreement.
Pele President Al Shefsky said the proposed joint venture is a sign of the project’s great potential. “The MOU represents a strong endorsement for Pele’s monazite processing strategy, and is an important first step to bringing the experience and expertise of a proven global leader in rare earth processing to our project in Elliot Lake, Ontario.”
The MOU is non-binding and will expire unless a definitive agreement is reached by September 30, 2015.
Pele has reported plans to import monazite because it offers higher-grade rare earths than the ore and tailings present in Elliot Lake. The higher grade allows significant production from relatively low tonnage, resulting in a lower capital expenditure.
Pele previously mined rare earths and uranium at Eco Ridge. But recent market conditions won’t support that type of large mining operation, the company reported. The expansion of their business into monazite is meant to establish them as leader in rare earths, and support development of Eco Ridge once the market improves.
Demand for a reliable supply of rare earths is increasing as they are used in many high-tech products including electric vehicles and wind mills.