Modern Mining August 2015

NIOBIUM

Panda Hill project makes progress ASX-listed Cradle Resources (Cradle) is making good progress on the development of its Panda Hill niobium project in Tanzania and expects to make a decision on whether to proceed with the construction of a mine early next year. The results of a pre-feasibility study (PFS) undertaken on the project were released earlier this year and indicated that Panda Hill could be developed as a highly economic operation based upon a base case mining scenario of 2 Mt/a. If Panda Hill does become a mine, it will mark the emergence of Cradle as the first new commercial-scale niobium producer since the 1970s.

N iobium (which decades ago used to also be known as columbium, a name which still lingers on in the term ‘columbite/tantalite’ or ‘coltan’) is not a well-known commodity. Cradle refers to it as a ‘boutique metal’ and it is mainly used as an alloy in steel making, finding particular application in the production of High Strength Low Alloy (HSLA) steels. The metal has a long history of stable prices – the price increased steadily from US$34/kg in 2008 to US$42/kg in 2014 – and Cradle believes this upward trend will continue, with a likely growth in demand of around 25 % expected over the next six years. Roughly 84 % of world production is in the hands of one company – CBMM of Brazil, a private company 70 %-owned by a Brazilian banking family. The only other two producers of any significance are Anglo American, which, like CBMM, mines its niobium in Brazil, and Magris Resources, whose niobium assets – pre- viously held by IAMGOLD – are in Canada’s Quebec Province. Africa has no formal niobium mines although very small quantities of nio- bium ore are produced from artisanal operations in several African countries, including the DRC. Since the existing players all reportedly have the capacity to increase production, Cradle – if it does mine at Panda Hill – will be entering a market where there is no basic supply shortfall and where price is largely dictated by CBMM. It reasons, however, that the sheer quality of its resource – which lends itself to low-cost mining methods – plus the fact that Panda Hill would account for only a tiny part – perhaps 5 % – of world production should ensure that there is a place for a new supplier in the market.

While Cradle has only been involved with Panda Hill since 2013, the deposit has been subjected to exploration over a period of decades and in the 1950s and1960s was even trial mined by a joint venture which included the then NV Billiton, a predecessor company of today’s BHP Billiton. With a total mineral resource of 178 Mt at 0,5 % niobium pentoxide or Nb 2 0 5 (and an exploration target of a further 200 to 400 Mt at between 0,4 and 0,6 % Nb 2 0 5 ), Cradle believes the deposit to be the most via- ble undeveloped niobium project worldwide. Apart from the excellent geology, another plus for the project is its location just 26 km from the major regional centre of Mbeya in south-western Tanzania. The area is well- served by infrastructure (including the new Songwe international airport) and is also home to a burgeoning mining sector based upon the reopening of the old Lupa goldfield, which was intensively mined from the 1930s to the 1960s before production tailed off. Shanta Gold com- missioned the New Luika Gold Mine, roughly 100 km north of Mbeya, in 2012 and there is a strong possibility that at least one other opera- tion will follow. Cradle, which currently owns 50 % of Panda

28  MODERN MINING  August 2015