Rwenzori Rare Metals (RRM), a subsidiary of Australian-based mining company Ionic Rare Earths Limited (IonicRE) awaits a mining lease, and ultimate permission to start development that will place Uganda on the map as a rare earth metal producer, after China.
“All roads for Rare Earth Elements (REE) lead to China, but RRM will work with partners to provide a non-Chinese supply to the west in the USA and Europe,” said Mr. Warren Tregurtha, CEO of Rwenzori during the Mineral wealth Conference in Kampala.
Rwenzori holds an exploration license for the Makuutu Rare Earth Project, which covers the districts of Mayuge, Bugiri, and Iganga in Eastern Uganda. These districts bear two kinds of rare piles of REE- hard rock which has radioactive activity and ionic absorption clay deposits, which do not have any radioactive activity.
The piles of rare earth which he described as a good deposit cut across 40 km covering an area of 300 square kilometers.
Project suitability
Warren made the Keynote Address, he described the Makuutu project as suitable because it enjoys all advantages required for conducive exploration, mining, and marketing.
Firstly, he explained, the deposits are located near a highway that provides a linear route to overseas markets through Kenya’s port of Mombasa. Secondly, the Makuutu project contains 44% REE which is highly valuable as well as 43% magnetic. The resource basket is around 532 million tons which guarantees a long mine life. Besides, there is a global search for alternative supply/sources of REE.
“That positions us quite nicely because we are one of the few ionic deposits outside of China and that makes us of real interest to the rest of the world,” Warren remarked.
What are Rare Earths and why are they important?
REE comprises a set of seventeen metallic elements with unique properties. Chemical, catalytic, magnetic, metallurgical, and phosphorescent.
“REEs are important because they are considered transformational since they make ordinary metals perform way beyond their natural capacities. REEs are fundamental inputs in economies because they are used in many green applications.” Warren explained.
The global discussion to transform from fossil fuels has seen countries like Norway, Denmark, Iceland, Ireland, Slovenia Sweden UK, France, Spain, and Japan place deadlines when they stop the use of fossil fuels. Which range between 2025 and 2050.
In some applications, the REE cannot be substituted for example in high-value, niche medical applications like Magnetic Resonance Imaging machines, Positron Emission Tomography Imaging, and X-Rays.
REEs are also important in electronic devices as permanent magnets in speakers, computer components, global positioning systems, sonar, defense systems, and lasers. REEs are also an important input in enabling 5G technology, Erbium Doped Fibre Amplifiers (EDFA) is used to compensate for the loss of an optical fiber in long-distance optical communications and can amplify optical signals simultaneously. No Erbium, no 5G.
REEs are also used in making crucial defence applications, for example, the F-35 travels at a speed of up to 2,000 km per hour and uses 4000 kg of REE. The Arleigh Burke DDG -51 uses 2,550 kg of REE and nuclear-powered submarines -SNN. use up to 4000 kg of REE. The good news he, said the Makuutu has most of the REEs.
What does it take to develop a REEs Mine?
The Rwenzori project has a JORC mineral resource estimate at 532 million tons which means that for every a million kg of ore, the company can process and get 650 kg out. At peak, Rwenzori intends to process 5 million tons of ore per annum.
“The processes are a serious and significant operation that will commercially start at small-scale operations and will take 18 months with gradual rump up of activities. A demonstration plant will be constructed in the interim to reduce operational risks in six months and around 70,000 tons of processing,” Warren said.
In infrastructure, he said that Rwenzori is very fortunate to be at Makuutu which is next to a power station, good roads, railway infrastructure, and communication infrastructure with access to water and access to industrial centers around Jinja and Kampala. He said there is nothing stopping Rwenzori from the infrastructure point of view, yet the infrastructure is one of the hurdles that many mining investors encounter
On risks and country tenure, Warren said that some would-be investors do not have an appreciation of Africa. He showed 2019 data showing the African Risk Map in which Uganda is not even listed as compared for example to Zambia, South Africa, Angola, and Tanzania which were listed as moderate countries to invest in.
Uganda isn’t also on the Fraser Institute Annual Survey, which is an assessment of how mineral endowments and public policies like taxation, and regulatory uncertainty affect exploration investments. This says that Uganda hasn’t attracted sufficient mining investment to be put on the list and therefore remains largely unknown. “As Ionic, we are going out there and telling everybody that Uganda is a good place to invest. When we get it right, Uganda will be on the list and more people will start to come,” he said.
On Financing, Warren said the Makuutu project will require capital of between $ 190 million and $230 million. He said the company will raise the capital from the stock markets. Other funds will be sourced from the banks and trade partners who will come in when the product is available.
Warren also said that Rwenzori is doing engagements with stakeholders including, MEMD, area MPs, district leaderships, National Environment Management Authority (NEMA), radio shows, and the Busoga Kingdom with whom there is a taskforce it is engaging with. The Company held Environment Impact Assessment public hearings that were attended by 3,800 and 65,000 online followers.
Corporate Social Responsibility
On Corporate Social Responsibility, Warren said that they have renovated 17 boreholes, the Buwaya police post, renovated the Natura Resources office B block in the Bugweri district.
During COVID-19, the company donated Protective Equipment (PPE) to Buwaiswa Health Centre in Mayuge, Makuutu Health Centre in Bugweri, and Buwunga Health Center in Bugiri. Also donated are 86 tree seedlings to the Mayuge district in commemoration of water and environment week, and footballs to 16 primary schools across the project area in Mayuge, Bugweri, and Bugiri.
On skills development, Warren said that they are sponsoring 2 Ph.D. students at Australian University, and UCT in South Africa. He said that is part of the company’s broader community engagement and speaks to one of Rwenzori’s values is developing a prosperous, safe, and healthy future for the Makuutu project.
Warren explained that the Social License to operate also involves the international community and Ionic is a member of the UN Global Compact, which looks at the sustainability of operations, traceability of supplies, environment, human rights, labour standards, and anti-corruption.
“When we speak to international investors, these are the standards that we are held as a result these are the standards we are going to employ in our company practices. Ionic will deliver an annual communication on the progress to the UN Global Compact in early 2023”.
He said that the Makuutu project is an opportunity for the company, the government, and the community to work together.
Generally, he said it takes around 10 years from start to finish. The company is going to be around for a very long time, probably 50 years, therefore, partnership and relationships are very key. He said that they are also committed to the highest level of ESG standards.