Australia’s Alkane Resources (ASX:ALK) advanced its Dubbo Zirconia Project (DZP) further by gaining mining rights from the New South Wales government’s industry department. Located in the Central West region of Australia, the mine was granted technical approval in May 2015 by the New South Wales state government's planning department and forwarded the recommendation to the NSW Department of Industry Division of Resources and Energy for granting mining lease rights to the project.

With only the formality of Environment Protection Licence (EPL) left as the final step in the approval process, DZP mine is geared for the production planning. Once the approvals will be received, Alkane's wholly-owned subsidiary, Australian Zirconia Limited (AZL) will proceed towards construction, said a press release.

Key details

The $1.2 billion project will make Alkane a strategic world producer of zirconium products and heavy rare earths. It will start production in 2017, according to Alkane Resources Managing Director, Ian Chalmers. The DZP mine is located 25 kms to the south of regional centre Dubbo and commands large in-ground resources of zirconium, hafnium, niobium, tantalum, yttrium and many rare earth elements.

For several years the company has been working on a flow sheet of sulphuric acid leach and perfected solvent extraction methods to produce a slew of products. All the processes have been demonstrated in pilot plants and products have also been evaluated.

Strategic significance

DZP’s customers are based in major economies such as United States, Japan and European countries, which consider the valuable metals as “strategic” and “critical.”

Factors like supply risk, economic importance, skewed availability of substitutes and tight production time frame keep these products in high demand and suppliers like DZP will have a good time in export markets. The DZP mine enjoys a reserve of top ten strategic metals and oxides. The mining company is trying to diversify supply base to gain recognition and support from more companies and governments.

Analysts are of the view that diversity of the DZP’s products and markets will provide more stability to revenue streams and broad base the markets besides buffering the shocks coming from the ups and downs in market cycles.

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