BAKU, Azerbaijan, September 24. Ferro-Alloy Resources Limited (FAR), a vanadium producer and developer of the Balasausqandiq vanadium deposit in southern Kazakhstan, has signed a non-binding memorandum of understanding (MoU) with US rare earths separation company Maglut Heavy Industries Inc. for the potential supply of mixed rare earth concentrate (MREC) from Balasausqandiq ore, the company said.
Under the MoU, FAR could supply Maglut with up to 1,000 tons of MREC per year as a by-product of vanadium processing at the planned Balasausqandiq project.
The companies are also evaluating an intermediate project at FAR's existing operation that could produce up to 100 tons of MREC per year, subject to confirmation of its economic viability.
The MREC would be recovered from residual leach solutions generated after vanadium extraction. This could allow FAR to recover additional value from the same ore stream without changing the core vanadium processing flowsheet.
Initial test work by Maglut on a Balasausqandiq ore sample indicated the potential to separate all 16 rare earth elements (REEs) present in the sample, including yttrium, neodymium, praseodymium, dysprosium and terbium.
Purities of more than 99% were achieved for the economically important REEs within two separation stages. The average overall recovery during the separation process was approximately 91.4%, while around 90.25% recovery was achieved in a single precipitation and calcination step to produce rare earth oxides.
FAR said the test work was aimed at assessing the technical potential of Maglut's separation platform and was not optimized for Balasausqandiq material. Further test work, process optimization, engineering and economic evaluation will be required.
Maglut has developed a proprietary chromatography-based platform for separating and refining high- and ultra-high-purity rare earth elements, including yttrium, neodymium and dysprosium, for the US market.
The proposed initial supply term under the MoU is five years from first production, with options for successive five-year terms. The MREC specification and pricing mechanism have yet to be agreed, while all commercial, technical and other terms remain subject to definitive agreements.
FAR said it is discussing the next phase of test work and optimization with Maglut and US strategic partners, including potential financing support for this work and the Balasausqandiq vanadium project.
The company has also commissioned SRK Consulting (UK) Limited to update its existing mineral resource estimate for Ore-Body 1 at the Balasausqandiq deposit. The initial update will include yttrium, while other REEs could be incorporated later if a limited-scope assay program currently being conducted by Intertek Minerals proves successful.
FAR previously said that historical assays had confirmed the presence of REEs in Balasausqandiq ore. Based on grades from its 2012 drilling campaign, the company estimated the in-situ value of yttrium alone in Ore-Body 1 at around $3.6 billion over the life of mine, or approximately $110 per ton of ore treated.
FAR stressed that this figure represents an in-situ value only and does not account for metallurgical recovery, operating costs or downstream processing. It should not be considered an estimate of revenue, cash flow or project value.
FAR CEO Nick Bridgen said the agreement with Maglut could position Balasausqandiq as a potential source of rare earths supply outside China.
"Securing reliable, non-Chinese supply of REEs has become a strategic priority for the United States and its allies. This MoU with Maglut is an important step in positioning Balasausqandiq as a potential future contributor to that supply chain, alongside our core vanadium business.
What makes this opportunity particularly attractive is its simplicity. The REEs would be recovered from the leach solutions that our planned vanadium process already generates, offering the potential for additional value from the same ore stream without altering the core flowsheet," Bridgen said.
He added that Maglut's initial test work had shown high purities and strong indicative recoveries, while further work would be needed to optimize the process and assess its economic viability.
FAR said the MoU is non-binding and does not guarantee that definitive agreements will be signed, that the intermediate project will proceed or that REE production will be achieved.
Listed on both the London Stock Exchange and the Astana International Exchange, Ferro-Alloy Resources Limited is a Guernsey-registered company that, through its wholly owned subsidiaries, holds the rights to explore, develop and exploit the Balasausqandiq vanadium deposit in the Kyzylorda Region of southern Kazakhstan.
Balasausqandiq is a two-phase vanadium project with significant by-products, targeting a planned annual output of 22,400 tonnes of vanadium pentoxide.
