The backers of a rare earths mining project in the arid plains of western South Africa say they have the answer to challenging China’s dominance in global supply chains – a by-product that is also crucial to the clean energy transition.
Producing rare earths used to make permanent magnets for wind turbines and electric vehicles (EVs) can be complex and is often unviable due to the costs, helping to explain the European Union’s decision to put the Zandkopsdrift project on its list of “strategic” mining ventures to reduce its dependence on China.
“We’re expected to be … the lowest-cost producer of magnet rare earths outside China,” Philip Kenny, chair of project owner Frontier Rare Earths, said in a media statement in February.
Zandkopsdrift aims to produce 4,000 metric tons of magnet rare earths per year by 2030 – equal to 17% of the EU’s projected needs. Last month, the miner signed an agreement with French company Carester SAS, which will separate and process the mine’s rare earths at a large-scale facility being built in France.
Central to the company’s business plan for Zandkopsdrift’s rare earths output is a by-product – battery-grade manganese, which the project aims to produce more cheaply than anywhere else in the world.
Manganese is increasingly used in the cathodes of lithium-ion EV batteries. Manganese-rich lithium-ion batteries significantly reduce the need for other minerals such as nickel and cobalt, which have been associated with social and environmental impacts in the Democratic Republic of the Congo and Indonesia. However, nearly all of the manganese sulphate used in batteries is currently produced by China.
“We will be the lowest (battery-grade manganese) cost producer in the world. We will have a production cost approximately 20% of China’s,” James Kenny, the company’s CEO, told an EU minerals conference in Brussels last year.
‘Untested’ processing route
While the model is promising, combining rare earth extraction with battery-grade manganese production at a commercial scale is an untested processing route, said Gaylor Montmasson-Clair, an energy consultant and analyst based in Pretoria.
“The production costs claimed are certainly eye-catching and, if verified, would be disruptive,” said Montmasson-Clair, who specialises in issues related to the transition to a green economy.
“However, there is a significant gap between prefeasibility projections and operational reality,” he said, noting that commercial production of rare earths is particularly sensitive to rates of mineral extraction and the costs of chemicals involved in the process.
The project – which will produce the rare earth compounds neodymium, praseodymium, dysprosium and terbium oxide – remains at the feasibility stage, with a Definitive Feasibility Study due for completion in mid-2027.
“We won’t know the true cost curve until the definitive feasibility study is complete and, ultimately, until the plant is running,” Montmasson-Clair added.
Frontier Rare Earths did not respond to repeated requests for comment.
Troubled mining legacy
The project fits in with South Africa’s aim to become a key supplier of critical minerals as countries scramble to secure up supplies of rare earths – a group of 17 elements that are needed to produce a diverse range of goods, including technologies for the clean energy transition.
President Cyril Ramaphosa signed a partnership on critical minerals with the EU in November, and the Industrial Development Corp (IDC), a state development finance institution, has invested $20 million in Zandkopsdrift.
Like other countries with a long and troubled mining legacy, South Africa wants to ensure that the mistakes of past mining booms are not repeated.
That means limiting the damage and disruption to the surrounding environment and communities, creating local jobs and adding value to raw materials exports by processing minerals domestically.
A commitment to meeting higher standards
Frontier Rare Earths has committed to an assessment by the US-based Initiative for Responsible Mining Assurance (IRMA), a voluntary global certification system for socially and environmentally responsible mining that gives miners an opportunity to show they are going beyond compliance.
“The intention is for the IRMA Standard to be useful early in the planning and development process so that future mines are developed in ways that reduce harm from the start,” Aimee Boulanger, IRMA’s executive director, told Climate Home News.
“The full audit report is made public, including the score for each requirement and the auditors’ notes on what evidence they found,” Boulanger said.
Steps pledged by the company for Zandkopsdrift include water-recycling systems to minimise consumption in the semi-arid Namaqualand region where it lies, local procurement targets and tailings storage facilities that are designed to prevent acidic mine drainage.
Additionally, under South Africa’s flagship Black economic empowerment programme, local communities will also hold a 26% stake in the project.
And as a means to add value and create extra jobs, the IDC holds an option to buy up to 10% of Zandkopsdrift’s production at prevailing market prices, subject to it being used in further downstream processing in South Africa.
“That clause is crucial,” said Montmasson-Clair. “It suggests Pretoria sees value beyond simply digging and exporting. The question is whether South Africa has the industrial capacity to absorb that material, or whether this will catalyse new local beneficiation industries.”
“Who actually benefits?”
Despite the promises of economic benefits, some local people in Namaqualand are wary about the prospect of new mining projects in the semi-desert region, formerly a major diamond-producing area.
Water shortages are a constant worry here, especially among small-scale cattle farmers, and memories of past environmental abuses by mining companies linger.
“We have seen these promises before,” said Sarah Baartman, chair of the Namaqualand Communities Mining Forum, a group formed to demand greater control over mining activities on their land due to concerns over environmental degradation and a lack of economic benefits and public consultation.
“The question is always: who actually benefits? Every mining company says they will be different. Then the water tables drop, dust coats our livestock, and when the mine closes, we are left with contaminated land.”
