Funding Uncertainty Looms Despite Browns Range DFS Confirming Project Viability
Northern Minerals has completed a Definitive Feasibility Study for its Browns Range Heavy Rare Earths Project, confirming its technical and financial viability as a critical new source of dysprosium and terbium outside China.
- DFS confirms 11-year mine life with A$592M pre-production capital
- Project to produce ~17,500 tpa xenotime concentrate rich in critical heavy rare earths
- Long-term offtake agreement secured with Iluka Resources for downstream refining
- Robust economics with base case pre-tax NPV of A$187M and IRR of 12%
- Strong government support and ongoing funding discussions with export credit agencies
Strategic Heavy Rare Earths Supply Chain Opportunity
Northern Minerals Limited (ASX, NTU) has announced the completion of a Definitive Feasibility Study (DFS) for its 100%-owned Browns Range Heavy Rare Earths Project, located in Western Australia's East Kimberley region. The DFS validates the project's technical and financial viability, positioning Browns Range as a near-term, significant source of dysprosium and terbium; two heavy rare earth elements (HREEs) critical for clean energy technologies, defense systems, and advanced electronics.
With China dominating approximately 99% of global HREE production and refining capacity, Browns Range offers a strategic alternative supply chain that aligns with global efforts to diversify critical mineral sources. The project benefits from its location in Western Australia, a Tier 1 mining jurisdiction, and enjoys strong government and community support, including executed native title agreements with Traditional Owner groups.
Project Highlights and Economic Outlook
The DFS outlines an 11-year life of mine (LOM) with a production plan combining open pit and underground mining methods focused on the Wolverine deposit. The project aims to produce approximately 17,500 tonnes per annum of xenotime concentrate at around 25% total rare earth oxides (TREO), containing roughly 4,350 tonnes of TREO annually. Dysprosium and terbium constitute about 70% of the concentrate's value, underscoring the project's high-value rare earth basket.
Financially, the project forecasts a pre-production capital expenditure of A$592 million and operating costs averaging A$31.25 per kilogram of TREO. Under CRU International Limited's base case pricing scenario, Browns Range delivers a pre-tax net present value (NPV) of A$187 million and an internal rate of return (IRR) of 12%, with a post-tax payback period of seven years. A divergence case reflecting potential price premiums for non-China supply boosts the pre-tax NPV to A$705 million and IRR to 21%, shortening payback to 5.6 years.
Robust Technical Foundations and Processing
The project leverages a proven processing flowsheet validated by extensive bench-scale and pilot plant test work, including operations at the Browns Range Pilot Plant from 2017 to 2021. The processing circuit involves crushing, grinding, magnetic separation, and flotation to produce the xenotime concentrate, which will be transported to Iluka Resources’ Eneabba Rare Earth Refinery in Western Australia under a binding long-term supply agreement.
Infrastructure at the site includes an operational camp, airstrip (planned for upgrade), and access roads, facilitating accelerated construction and operational readiness. The power supply will be provided by a hybrid diesel-solar station targeting up to 44% renewable energy penetration, reflecting the project's commitment to sustainable practices.
Strategic Partnerships and Funding Pathway
Northern Minerals has secured a strategic partnership with Iluka Resources, which includes a binding contract to supply 30,500 tonnes of TREO contained in xenotime concentrate. This partnership not only guarantees a downstream processing pathway but also strengthens Australia's domestic rare earths value chain, reducing reliance on Chinese processing.
Funding discussions are actively underway with export credit agencies in Australia, the US, and Europe, alongside strategic investors interested in the equity component. While no binding commitments have yet been secured, Northern Minerals is confident in its ability to raise the necessary capital, supported by the project's strategic importance and robust DFS outcomes.
Outlook and Exploration Upside
The DFS also highlights significant exploration upside within Northern Minerals’ extensive tenure of over 5,600 square kilometers across Western Australia and the Northern Territory. Ongoing drilling and technical work aim to expand the resource base and potentially extend the mine life beyond the current 11-year plan.
Market fundamentals for dysprosium and terbium are expected to strengthen over the coming decade, driven by surging demand for permanent magnets in electric vehicles, wind turbines, and emerging technologies such as robotics. The geopolitical imperative to diversify supply chains away from China further enhances the strategic value of Browns Range.
Bottom Line?
With a robust DFS and strategic partnerships in place, Northern Minerals is poised to advance Browns Range into production, but securing funding remains the critical next hurdle.
Questions in the middle?
- Will Northern Minerals secure the full A$592 million funding required to commence construction?
- How will rare earth oxide price volatility and geopolitical tensions impact project economics?
- What is the potential for resource expansion beyond the Wolverine deposit to extend mine life?
