Mackowski Success Factors for Rare Earths Development – Part 6
Posted on September 25, 2014 by Steve Mackowski
Steps 4, 5 and 6. Pilot Plants for Beneficiation, Extraction and Separation. Pilot Plants are classically used to prove the flow sheet and to provide chemical and engineering data for the design of the Project, particularly the processing sections. With reference to the "Mine to Market Place strategy", this is where the first samples are produced that a potential end user can look at in his assessment of your project. So again a MUST.
Step 7. Environmental Approval. I"m a little less insistent here for the purpose of looking at the "Mine to Market Place strategy". You will have identified all of the issues in the baseline environmental studies conducted as part of the Scoping Study, and those issues will have been appropriately evaluated, plans made etc such that there are no surprises. Questions can be answered and queries investigated. In our current success factor context, this step is not being considered.
Step 8. Marketing Plan. What are the phases? How do we quantify? How do we rank?
Do we have a vision for the market place that we wish to service? That is, its geography, its products, its quality requirements. Does it make production sense? Can it work?
Have we signed "Letters of Intent" with potential end users? Do these letters meet the philosophical visions? Ie domestic production chain only.
Has a "Memorandum of Understanding" been signed? Is it binding?
Has an "Off Take Arrangement(s)" been agreed? Have binding contracts been negotiated and finalized?
Has the completion of the marketing plan resulted in the project being in a financial position that will enable the project to fund the Definitive Feasibility Study (DFS)?
Has the completion of the marketing plan resulted in the project being in a financial position that will enable the project to fund the Construction and Start Up? (generally dependent on the financial success of the DFS)
Grading the significance of these 6 phases is a challenge in developing diligent ranking methodology. It is not linear. It takes considerable time and effort to progress through these phases as any current developer of an REO project can attest. As far as I am aware, after Molycorp and Lynas, there are no REO developments that have completed the 6 phases. An understanding of where each project fits here is critical in determining that project"s chances of success. It is also a very good reflection on the capability of the Board and Management as to how they are progressing through their Marketing Plan (Dudley"s Step 8)...
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