Del Rio couldn't speak too much about the process the company will use, as it's in the process of putting a patent on it. However, Arturo Albornoz of BioLantanidos told Bloomberg that the company will use a tank-leaching process with biodegradable chemicals, digging up the clays before returning them, cleaned, back to the ground.That's a key consideration, as Del Rio noted that "Chile has high environmental restrictions for permitting." Indeed, most media attention has focused on the fact that the process to be used by BioLantanidos is more environmentally friendly than methods used in China to extract rare earths from ionic clays. Project economics In terms of economics for the project, Del Rio said that it's important to note that BioLantanidos won't have one large area under construction. Rather, the company has found it's more economic set up multiple, small plants and operations at each high-grade zone of the clay deposit. To reach its goal of 10,000 tonnes of rare earth concentrate production per year, the company will build roughly 20 plants that will produce about 500 tonnes of concentrate per year. Del Rio also stated that the capex for the plants is expected to be "extremely light" at about $10 million each. The company expects to start producing from a pilot plant at the project this June, and will build its first pilot plant next year. Currently, BioLantanidos doesn't think it's worth it to set up its own rare earths separation process in Chile, and has had several conversations regarding the sale of its concentrate to rare earths processors elsewhere. However, Del Rio said the company wouldn't necessarily be opposed to separating rare earths itself in the future. "There are many technologies being developed right now. We are totally open to it," he said. Operating costs and rare earth prices Speaking to Hykawy about BioLantanidos, he said he believes "[t]he project is definitely worth keeping an eye on" as "having a sizeable source of heavy rare earths outside of China would be noteworthy." As Del Rio noted, dysprosium is expected to make up about 45 percent of the concentrate value for the project.
However, Hykawy had concerns about the costs of removing clay from the ground. "In China, the dirt is not being moved," he explained. "If you are moving large quantities of dirt, you are at a cost disadvantage to the Chinese." Del Rio said that operating expenditures are estimated to be about $10 per kilogram of concentrate for BioLantanidos.More broadly, Hykawy stressed the importance of having a cost-effective project. "While at one time I was hopeful that buyers would pay a premium for rare earths produced through a secure, non-Chinese supply chain, those days are gone," he said, suggesting that buyers see security of supply and environmental friendliness as added benefits rather than points worth paying a premium for. "[T]he major selling point for any new rare earth project is to show potential investors that they can make money selling at Chinese prices," he said. "That is not going to be easy." Watch this space Of course, being a private company, BioLantanidos might not seem immediately relevant for many investors. Still, in terms of watching the rare earths space as a whole, the company could be worth keeping tabs on. "In the short term, obviously [more heavy rare earths supply] would drive down prices of rare earths even farther, which is not exactly welcome right now," said Hykawy. "Longer term, the whole industry has to get serious about how to build demand for these materials, and the easiest way to do that is obviously to lower their cost." Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. Related reading: Don Lay of Medallion Resources Talks Rare Earths Prices Rare Earths in Chile: The Next Big Thing? from Rare Earth Investing News