Lindian Resources (ASX: LIN) shares are down 12%. LIN shares fell on the announcement of the maiden resource at Kangankunde in Malawi. We have to admit that we’re really just not sure about this project. One of the claims being made seems to us to be ever so slightly suspect. We’re also really not sure about whether a new hard rock - let alone monazite - rare earths mine is ever going to be exploited. We have a suspicion - perhaps a little more than that - that the varied non-hard rock sources are going to take over the marketplace. #
The announcement from Lindian: “This Mineral Resource Estimate (‘MRE’) places Kangankunde amongst one the world’s largest rare earths deposits and positions it as a globally strategic resource for secure, long-term supply 5.7 million tonnes contained rare earths. Includes 1.2 million tonnes of contained rare earths critical metal elements neodymium/praseodymium (NdPr). NdPr ratio averages 20.2% of TREO. Non-radioactive mineralisation”
Some of those things are good. The Nd/Pr ratio certainly puts it the right side of the separation equation - low Nd/Pr ratios mean that the losses on the Ce/La fraction make a mine unprofitable. Lindian is the right side of this. On the other hand the claim of non-radioactive looks to us overcooked. Here, there are low levels, that’s true. 40 to 50 ppm Th, maybe 10 ppm U, that is low for monazite. That’s still enough to have to be careful with processing - and that’s before we clarify whether they mean that’s the level in all material (and so much higher in the monazite itself) or just the monazite itself.
Lindian Resources share price from Google Finance
However, our big concern is something different. This is hard rock mining for rare earths. And we’re deeply uncertain that anyone is going to do that again. OD6, Heavy Rare Earths, Victory Metals, these are just a few of the dozen ionic clay finds on the ASX alone in the past 6 months. Then there are the phosphogypsum plays like Rainbow Rare Earths. We think that it’s possible that hard rock rare earth mining will go the way of magnetite mining once the Pilbara was discovered - simply the old way with an expensive ore that no one bothers with any more.
Clearly, with Lindian on a $400 million AUD market capitalisation the rest of the market disagrees with us. But it is still something we worry about - is anyone going to actually open hard rock rare earths mines again?
