FAQ - Alkane Resources Ltd
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Frequently Asked Questions

Alkane Resources values its community and the environment, and seeks to be transparent and continually provide the facts on the Dubbo Project. Below are Q&A’s to respond to some of the questions community members have asked.

Have more questions?
Please call, arrange to meet or email Mike Sutherland (02 6882 2866), our General Manager NSW who is happy to explain the project and the EIS.

Introduction to the Dubbo Project

What is the Dubbo Project (DP)?

The Dubbo Project (DP) is one of Australia’s most valuable rare metal/rare earth projects. It will be a source of zirconium, hafnium, niobium, yttrium and several different rare earth elements, making it a potential strategic and alternative supply on the global market of critical minerals for a range of “high tech” and sustainable technologies.

The mine will be located at Toongi, 25 kilometres south of Dubbo in central west NSW. Due to the size of the resource, the mine is expected to process up to 1,000,000 tonnes of ore per year.

About the Dubbo Project

What is mining?

Mining is the recovery of resources of economic benefit through extraction and processing of ore to recover a saleable product.

The Dubbo Project ore contains economic zirconium, hafnium, niobium, rare earths/metals and non-economic gangue minerals (waste). Iron and aluminium are the most abundant gangue minerals as they are common elements in many rock forming minerals. Uranium and thorium are also present in trace amounts, well below concentrations that would be economic to mine and process.

The DP has approval to mine those elements that are of economic value, which we are separating into product streams. The rest of the elements are not concentrated in the process or separated out individually as product streams and instead pass to waste storage.

When is construction of the DP going to start?

Construction will commence once project funding is obtained. All state and federal approvals are in place and the project is construction ready.

What is the status of project funding?

Alkane and its wholly owned subsidiary, Australian Strategic Materials Ltd (ASM) (formerly Australian Zirconia Ltd), continue to work with advisors to progress full funding of the project. The broad strategy incorporates a combination of strategic and institutional investment, Export Credit Agency finance and commercial debt.

What are the employment opportunities at the DP?

There are two components of the DP workforce to be considered: the construction workforce and the operational workforce.

Construction workforce: Technology and construction contractors will have the overall responsibility for building the DP for Alkane. This means it will be those companies, not Alkane, that will be employing the construction workforce. When the time for construction approaches, Alkane will provide links to the different contractors’ websites on the Alkane website. It is anticipated that local tradespeople and service providers will approach those companies directly.

Operational workforce: Recruitment by ASM will occur towards the end of construction when the plant enters a commissioning phase. The operational workforce will be made up of some imported specialists who will be required to re-locate to Dubbo and local people who will be trained as operators to work at the DP.Alkane estimates the DP will provide permanent employment for approximately 250 people. Jobs will span:

  • engineers, metallurgists, chemists, scientists
  • administration, accounting, logistics
  • transport, mining, operators, security, cleaning
  • tradespeople – mechanical, boiler making, electrical (including apprentices)

Who is Alkane Resources?

Alkane Resources Ltd is an ASX and OTCQX (US) listed multi-commodity mining and exploration company with a focus on gold, copper, zirconium, hafnium, niobium and rare earths.

Alkane has been operating since 1980. Its headquarters were established in Perth in 1987 as part of Australia’s growing mining hub in that city, providing the company with access to international mining, geology, engineering, processing, laboratory facilities and expertise.

Alkane’s projects and operations are located in the Central West of New South Wales, in eastern Australia. To oversee these activities, Alkane has established offices at Peak Hill, Orange and Dubbo, plus operations at Tomingley (Tomingley Gold Operations). Construction of the DP is expected to commence in 2018 and will be managed from Perth and Dubbo.

Construction of the Dubbo Project

What is involved in the construction process?

The first phase of construction will involve the development of site infrastructure: a 27km length of Obley Road will be upgraded to B-Double standard; electricity, gas and water facilities will also be installed. (See more detailed response below to infrastructure question.)

For the processing plant, a modular construction method is likely to be used, with individual process modules built off-site (in Australia or overseas)and transported to the Dubbo site. Some earthworks will likely commence onsite in 2018to prepare for installation of the processing plant.

This modular construction method allows for the processing plant to be built in four 250ktpa trains, which together make up the full 1Mtpa capacity. It has also given rise to the possibility of staging the overall build of the project. This means the plant could be built in two stages, commencing with the first two trains (500ktpa capacity). The second stage would then be built after the first stage is successfully commissioned and customer relationships and revenue streams established.

How long will it take?

Construction will take approximately two years from full funding approval to the start of commissioning.

Who will be constructing the plant?

The plant will contain specialist equipment sourced from within Australia and all over the globe. This will be assembled both on and off site by experienced contractor companies. It is expected that several companies specialising in processing, earth works and infrastructure will need to be involved. The companies will be selected from both existing relationships and through normal tender processes.

What local infrastructure upgrades will take place?

Obley Road upgrade

To accommodate the increased traffic associated with an industrial mining and processing site, Obley Road, between the Newell Highway intersection and the Toongi Road intersection (approximately 23km), will be upgraded to meet the required engineering standards as per the Project Approval by the NSW Government. This will involve widening and straightening of some of the sealed surface, as well as installing bridges and culverts to address flooding risks where they are currently inadequate. The upgrade will be one of the first construction activities that commences once the funding for the DP is secured. AZL will fund the Obley Road upgrade and pay for annual maintenance of that section of Obley Road through a Voluntary Planning Agreement made with Dubbo City Council.

Upgrade of power and electrical infrastructure

Early stages of construction will likely utilise existing power at Toongi as well as generators.

ASM (fomerly AZL) has completed negotiations with 15 landowners to identify the power supply (easement) route. Essential Energy
will oversee the environmental and heritage assessments before approving the route.Construction of the 132kV power line will commence once the site has reached sufficient power demand.

Water supply from the Macquarie River

The water supply pipeline will be approximately 8.5km long between the processing plant and the Macquarie River and will be a buried 500mm diameter poly pipe in an easement which will also permit an overhead 11kV power line from the processing plant to the river pump.

Will there be a gas pipeline built?

Ultimately, a gas pipeline will be built, though the precise route has not yet been confirmed. In the short term, gas would be trucked to site.

Is there a plan for a mobile tower?

The Project will need to ensure a good communication system exists across the site. It is not known whether public companies such as Telstra or Optus will offer a service available to the broader community if they are part of the Project solution.

Have you looked at opening the rail line?

Alkane is committed to reviewing this option within three years of the commencement of mining operations (as per Project Approval). Alkane needs to have the processing plant fully operational with confirmed reagent supply (largely from Newcastle Port) to evaluate the viability of upgrading the Dubbo-Toongi section of railway line. The critical issue will be gathering enough reagents at the one point in Newcastle to fully utilise a train service to the project.

Dubbo Project operations

When will mining commence?

Mining will only commence towards the end of processing plant construction. A portion of the open cut area will be cleared of vegetation, and drill and blast will commence immediately afterwards.

What will mining involve?

Standard drill and blast operation will involve a blasthole rig drilling a pattern of holes in a staggered pattern to 10metre depth. Blastholes will be loaded with ANFO explosives and initiated from a safe distance. The blasted material is then loaded out by excavator and trucked to the processing plant stockpile.

The ore will then be conveyed to the processing plant for crushing and grinding, followed by a sulphuric acid leach, solvent extraction recovery and refining to produce several products, including high purity zirconium materials, hafnium, niobium, and a rare earth concentrate.

How will materials be transported on/off site?

Quarry materials (basalt) and ore will be transported around the DP site using dump trucks. An excavator will be used to load trucks, which will use a haul road specifically constructed for this task.

Construction components will be transported to site via trucks using Obley Road.
DP finished product (packed in 200L drums or one tonne bulky boxes) will be transported to port in 20-foot containers on trucks; for at least the first few years of operation, transportation will bein trucks via Obley Road.

The use of rail to import reagents to and export product from Toongi will be investigated within the first three years of the development.

Why are you farming the lands around the DP?

Alkane has established the Toongi Pastoral Company Pty Ltd (TPC) to manage its land and property assets. Out of the aggregated 3,500 hectares, TPC will manage 1,021Ha of biodiversity offsets and 1,995Ha of agricultural land. (The DP mining and processing footprint will be 520Ha.)

The biodiversity areas feature grassy white box woodlands, Wiradjuri cultural heritage sites
and habitats for the Pink-tailed Worm-lizard, a vulnerable local species for which Alkane is taking a leading role in conservation.

TPC will also engage with the local Rural Fire Service, local schools and Landcare groups in the same way as any other landholder in the region.

Primarily, TPC aims to operate a pro table mixed agricultural enterprise (sheep and cattle) that demonstrates leading practice sustainable farming technologies – including genetics, soil and pasture management and engineering solutions. Alkane has appointed an experienced Farm Manager to oversee this enterprise

Dubbo Project Products

What products will be produced by the DP?

Following crushing and the grinding, the DP ore will be subjected to a sulphuric acid leach,then solvent extraction recovery and refining to produce several products, including high purity zirconium materials, hafnium, niobium, and a rare earth concentrate.

What are zirconium materials and what are they used for?

Zirconium is typically traded in the form of:

  • fused zirconia – zirconium oxide (ZrO2), typically produced from zirconium silicate (zirconia sands)
  • zirconium chemicals – including zirconium oxychloride (ZOC), zirconium basic carbonate (ZBC), zirconium sulfate (AZST) and zirconium hydroxide (ZHO)
  • zirconium bar – metallic zirconium, typically produced from either fused zirconia or zirconium chemicals.

The most common of these, zirconia, is a stable, non-reactive, non-toxic, non-radioactive material that is used in a wide range of applications. It is known to occur naturally in a mineable form in very few places in the world. Most of the world’s zirconia and zirconium materials (97%) are currently produced from zirconia sands, instead of being mined from the ground. A small percentage is produced in Russia from a mineral called baddelyite, which is mined as a by-product of titanium mining.

As a point of difference, the source of zirconium at the DPwill bean ore mined at the site containing eudialyte (which is comprised of zirconium cyclosilicate hosting calcium, water, yttrium, and heavy rare earths). This ore will undergo a series of chemical processes in the treatment plant to produce a range of zirconium materials including a particularly high-purity zirconia (99.9%), owing to the recovery of hafnium from the process stream. (Hafnium is always found in zirconium minerals, but is rarely recovered except when high-purity zirconium is requiredfor nuclear applications.)

The DP’s high-purity zirconium ‘strip liquor’ will be converted to downstream zirconium chemicals (including reactive grades of ZBC), zirconia and other speciality zirconias (such as a yttria-stablised zirconia product). Zirconium and zirconium materials are used in many applications including the auto exhaust catalyst, electronics, engineering and refractory ceramic, nuclear, optical glass and alloys industries.

Tell me more about rare earth elements

What are rare earths?

Rare earths, or rare earth elements (REEs), are a group of metallic elements in the periodic table which have diverse chemical, electronic and magnetic properties. These make them ideal for a range of technological and ‘green energy’ applications.

Of the 17 designated REEs, 15 are from the lanthanide group of elements from the ‘f’ block of the periodic table: lanthanum, cerium, praseodymium, (promethium), neodymium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium. Yttrium and scandium, while not part of the lathanide group, are also considered rare earths because they share similar chemical properties.

Despite their name, many of the rare earth elements occur commonly in the earth’s crust. However, the forms in which they occur in the earth are often not concentrated enough to be economically viable to recover. The scarcity of these minerals (previously called ‘earths’) led to the term ‘rare earths’. Once they are extracted, rare earths require significant processing before they can be put onto the market.

What are rare earths used for?

Rare earths play a key role in our daily lives because of their broad application in the clean technologies, computing, automotive, entertainment, medical and military fields. In many cases, there is no alternative to rare earths in manufacturing these products.

Rare earths have a huge range of applications, including:

  • Medical imaging equipment including MRI scanners
  • Wind turbine magnets for the production of clean energy
  • Car parts, including catalytic converters, batteries, fuel injectors and hybrid/electric cars
  • Home entertainment systems – TV and computer monitors
  • Phones, laptops and other smart devices
  • Disk drives and CDs
  • Military applications – including precision guided munitions, missiles and smart bombs

In many cases, rare earths are used to make the permanent magnets that are essential to many of these systems, due to their ability to produce an intense magnetic field. They can be used to make extremely light magnets for hybrid cars, increasing the cars’ performance because of the reduced weight of their components.

The cost of rare earths has risenin recent years due to a huge increase in demand for green technologies and consumer technology products.

How significant is the DP rare earths output?

The DP is based upon one of the world’s largest in-ground resources of the metals zirconium, hafnium, niobium, tantalum, yttrium and rare earth elements. Due to the size of the resource, the mine is expected to process 1,000,000 tonnes of ore throughput per year over a period of 70 years or more.

China is currently the major supplier of rare earths, providing between 90-95% of the global market supply. India and the US, once leading global suppliers, still produce some rare earth products, but their contributions are now dwarfed by China’s huge hold over the market.
Australia has not traditionally played a major role in the global supply of rare earths until Lynas established the Mt Weld operation. The DP will make a significant contribution to lifting Australia’s participation in the global market, and will also open up another alternative stream of rare earth materials outside of the dominant Chinese market.

The DP will produce a high purity rare earth chemical concentrate (95% REO), which will be separated into high value rare earth oxides under a toll processing agreement with a downstream separation company.

What is hafnium used for?

Hafnium is a metal that lends unique properties to certain high-temperature superalloys used in the aerospace industry, allowing them to maintain high strength and stability when operating at very high temperatures. Hafnium also has increasing use in oxide form as an electrical insulator in the microelectronics industry.

Does Alkane intend to recover or produce uranium?

Alkane has no interest in the recovery and production of uranium for numerous reasons.

  • mining/producing uranium in NSW is illegal and is expected to remain so for  10+ years
  • the considerable additional national and international regulatory requirements for nuclear safeguards even if it was legal
  • the additional capital requirements and process flowsheet development costs are simply not economic

Whilst the EIS comprehensively addresses the risks of radioactivity it does not address the production of uranium for sale or storage because Australia Strategic Materials Ltd is not applying to produce uranium, is not intending to produce uranium and does not seek approval to produce uranium.

Independent information on radiation, uranium and radiation safety is available from: