A  mine 13 kms north-west of Aileron is likely to become the source for a $1.5 billion rare earth venture supplying 10% of the world’s need.

This would make the remote Stuart Highway roadhouse 110 kms north of Alice Springs the hub for the venture at Nolans Bore, which will be an open-cut mine with up to 150 personnel. 

Some of the staff are likely to be accommodated in Alice Springs, and some in Aileron and Ti Tree.

There will be initial processing of the mined ore on site, removing some of the “trash material” to produce a mineral concentrate.

Processing of the mineral concentrate into final rare earth oxide products will be done in a plant planned for Whyalla in South Australia which will employ 300 people, and 1000 during the construction.

Whyalla has been selected due to the availability of a large industrial site, “well serviced with infrastructure and utilities”, and “for ease of logistics for the various raw materials used in processing”, says Steve Ward, managing director and CEO of Perth based Arafura Resources. 

Processing requires among other things vast amounts of water and at Whyalla at least some of that will come from the sea.Dr Ward says mining is planned to start in 2013 and to continue for at least 20 years. He says exploration drilling so far has been limited and the deposit may well be much bigger. A major drilling campaign is starting this year.

Global demand for rare earth, used in products ranging from mobile phones to low energy globes, wind turbines to hybrid cars, is booming: China currently produces 97% of global supplies but has been progressively cutting back on exports to the rest of the world. This means that worldwide users are actively looking for new sources outside of China such as Arafura.

The strong demand for rare earths and limited supplies has seen  prices increase almost six fold in 2010, says Dr Ward.

The Nolans Project will produce 20,000 tonnes a year of rare earth oxides.