Tanbreez Project’s $2.4–3.0B NPV and 162% IRR Highlight Rare Earth Potential

• Inclusion of feldspar and arfvedsonite in Mineral Resource Estimate
• 19-year mine life with 95% Indicated Resources mined
• Estimated Net Present Value (NPV) of US$2.4–3.0 billion before tax
• Internal Rate of Return (IRR) of 162% with ~3-year payback
• Strategic Western-aligned rare earth supply with low radioactivity and year-round fjord access

Project Overview and Resource Expansion

European Lithium Ltd (ASX: EUR) and Critical Metals Corp have jointly released an updated scoping study for the Tanbreez Rare Earth Project in Southern Greenland. This update integrates an addendum to the Mineral Resource Estimate (MRE) that now includes feldspar and arfvedsonite minerals alongside the primary rare earth-bearing eudialyte. The project’s mineralised host rock, kakortokite, spans an impressive 5 km by 2.5 km area and is estimated to contain approximately 4.7 billion tonnes of material, with the current MRE focusing on 45 million tonnes of indicated resources.

The inclusion of feldspar and arfvedsonite, both industrial minerals with potential domestic and export markets, complements the rare earth concentrate production and supports the project's diversified revenue streams. Eudialyte remains the primary rare earth concentrate, rich in both light and heavy rare earth oxides (HREO), with the latter comprising about 27% of total rare earth oxides (TREO).

Economic Highlights and Mining Plan

The scoping study outlines a 19-year mine life, extracting approximately 24 million tonnes of eudialyte and 100 million tonnes of feldspar and arfvedsonite from the indicated resource base. The project is designed as an open-pit operation with minimal overburden, leveraging the surface exposure of the kakortokite unit. Processing involves dry magnetic separation on-site, producing three separate concentrates for export or local sale.

Financially, the project boasts a robust Net Present Value (NPV) estimated between US$2.4 billion and US$3.0 billion before tax, calculated at discount rates of 10% and 8%, respectively. The internal rate of return (IRR) is an impressive 162%, with a payback period of approximately three years. After tax (25% rate), the NPV is estimated between US$1.8 billion and US$2.2 billion. These figures underscore the project's strong economic potential, although the scoping study cautions that these are preliminary estimates with an accuracy range of ±30% to ±50%.

Strategic and Environmental Advantages

Tanbreez holds strategic importance as one of the few Western-aligned sources of heavy rare earth elements, critical for permanent magnets used in defense, clean energy, and advanced technologies. The project benefits from a 30-year exploitation license granted by the Greenland government, valid through 2050, and features low levels of radioactive elements such as uranium and thorium, simplifying environmental permitting and processing.

Its coastal location offers year-round access via deep-water fjords, facilitating efficient shipping to Europe and North America. The project also emphasizes local workforce development, aiming for over 90% Greenlandic employment during production phases, supported by agreements with local communities.

Funding and Next Steps

Development of Tanbreez is estimated to require approximately US$200 million in funding, covering pre-production capital and early-stage operational costs. While the company is confident in securing financing through a mix of equity, debt, and potential government grants aligned with critical minerals strategies, there is no guarantee of funding availability or terms. The project is advancing towards a feasibility study expected by the end of 2025, which will refine economic parameters and support final investment decisions.

Environmental and social impact assessments have been completed and accepted by Greenland authorities, with ongoing commitments to sustainable mining practices and community engagement. The project’s modular processing approach, with chemical refining planned offshore in the US or EU, aligns with environmental best practices and supply chain security goals.

Context Within Global Rare Earths Landscape

Compared to other recent rare earth projects in Canada, Sweden, and South Africa, Tanbreez stands out for its scale, heavy rare earth content, and strategic location. While projects like Canada’s Wicheeda and Sweden’s Norra Kärr focus on light or heavy rare earths with varying economic profiles, Tanbreez’s combination of multiple saleable minerals and Western alignment positions it as a critical future supplier amid global supply chain diversification efforts away from China.

However, challenges remain, including the remote Arctic location, infrastructure development needs, market price volatility, and the requirement for substantial capital investment. The company’s ongoing exploration, metallurgical testing, and stakeholder engagement will be key to advancing the project towards production.

Bottom Line?

As Tanbreez advances towards feasibility and funding, its vast resource and strategic positioning could reshape Western rare earth supply—if it can navigate Arctic challenges and market uncertainties.

Questions in the middle?

• How will the company secure the estimated US$200 million funding amid market volatility?
• What are the timelines and risks associated with the planned offshore chemical refining?
• Can the project’s modular approach and by-product sales sustain profitability if rare earth prices fluctuate?