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South African Rare Earths Mine Bought by Canadian Great Western Minerals Group Reopens

More and more mining companies are scrambling to join the rare earth metals ( REM ) bandwagon. And the faster they get to produce the elements and sell to the market, the better the global demand will neutralize away from China's hands.

Great Western Minerals Group Ltd. of Canada had recently re-opened the Steenkampskraal mine after it was abandoned in 1963 when global demand for thorium went bust. Its old buildings are being torn down, the mine shaft being modernized, and the entire site being geared up to meet present environmental safety rules and regulations.

The Canadian company bought the mine from South African company Rare Earth Extraction Co. Ltd. (Rareco), saying it is faster and cheaper to renovate an old mine like Steenkampskraal than to start from scratch. Production is expected to begin January 2013 with expected output of 5,000 tons of rare earth oxide a year.

"The site is cleared and mine refurbishment is well under way, with completion of the shaft refurbishment by year end," Jim Engdahl, president and chief officer of Great Western, told GlobalPost news.

Great Western also had to deal with the highly radioactive waste left behind when the previous Anglo American company operating Steenkampskraal abandoned it in the 1960s. But it is now being brought up to concur with present environmental standards.

Experts and analysts had pointed out that the earth has an abundance of REM scattered everywhere, but processing REM is costly and difficult, thus the claim "rare."

With this knowledge, Great Western entered into a tentative agreement to construct a rare earth separation plant in nearby town of Vrendendal. This will be with a joint venture with Chinese company Ganzhou Qiandong Rare Earth Group Ltd. which, according to Great Western, has 20 years of operational experience in processing rare earth oxides and metals.

Jack Lifton, founder of the industry consultancy Technology Metals Research, had earlier said that only a number of non-Chinese firms will actually flourish in exploring the REM industry due to lack of technology and expertise. He noted the world's REM separation capacity is 99 per cent Chinese.

There are currently about 244 companies challenging China's dominance in the global supply of REM. However, only less than 4 per cent will prove to be profitable, according to data from Technology Metals Research.

China is the world's major stronghold of rare earth metals, controlling 95 per cent of the REM market.

Read more:

Challenges Faced in Mining Rare Earths Trickier Than Imagined

Unstable Supply of Rare Earths Likely in the Future: Study

Foreign Companies Vie for Madagascar Rare Earths

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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