Alkane Resources (ASX: ALK) has committed 100 per cent the niobium production of its Dubbo Zirconia Project (DZP) in central west New South Wales (NSW) to a joint venture (JV) with a European firm.

The commitment is the result of a fourth memorandum of understanding (MOU) inked by Alkane and its JV partner. With an expected ferro-niobium production of 1 million tonnes per year, the MOU is valued at $95 million per annum.

"Probably six months ago or eight months ago we would have talked about the smaller 400,000 tonnes a year operation, but the million tonne a year operation is almost guaranteed now," Proactive Investors quoted Alkane Managing Director Ian Chalmers.

The MOU is expected to contribute 22 per cent of the total sales revenue of Alkane of $432 million.

Niobium is used for steel production, alloys, jewelry, coins and medical applications, particularly for hypoallergenic products. In the steel industry, niobium is used for making cars, gas pipelines and buildings because of its strength, comparatively light weight and resistance to corrosion.

Besides nobium, Alkane has several gold and copper prospects at different stages of advance in NSW. The mining firm's feasibility study indicated a potential 50,000 to 60,000 ounces of gold a year at its project site at Tomingley, south west of Dubbo.

Several firms are interested in inking with Alkane MOUs for heavy and light rate earth concentrates. The DZP has zirconium, hafnium, tantalum, yttrium and other rate earth element deposits.

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