The phosphate angle that most people miss with ARU

John

Administrator
Staff member
One of the more interesting — and often overlooked — aspects of the Nolans rare earth project is the phosphate component of the ore body and how it supports both processing economics and potential by-product revenue.

Where the phosphate comes from
The Nolans deposit is hosted in an apatite-rich rare earth mineralisation system. Apatite is a calcium phosphate mineral that carries both rare earth elements and significant phosphate content. This isn’t unusual geologically, but Nolans has a relatively high apatite association compared with many rare earth projects being developed outside China.

During beneficiation and cracking, that phosphate is liberated alongside the rare earths. Rather than being treated purely as waste, it becomes part of the chemical flowsheet.

Why this matters for processing
Rare earth extraction requires substantial acid digestion — typically sulphuric or nitric acid depending on the flowsheet. Access to phosphate minerals enables downstream production of phosphoric acid as part of the chemical circuit. That has two important implications:
  1. Chemical integration: It helps underpin acid supply within the process, reducing exposure to volatile external acid markets — a non-trivial operational risk in rare earth processing.
  2. Cost efficiency: Acid consumption is one of the biggest operating cost drivers in rare earth separation. Internal generation or offsetting through phosphate streams improves operating margins.
This is strategically important because many ex-China rare earth projects underestimate reagent logistics and costs.

Excess phosphate = commercial opportunity
Nolans is expected to generate more phosphate-derived material than required internally. That surplus can be converted into saleable phosphoric acid or fertiliser products.

Potential benefits include:
  • A secondary revenue stream not directly tied to NdPr pricing cycles.
  • Lower net operating costs for rare earth oxide production.
  • Exposure to global fertiliser demand, which is structurally supported by agriculture and food security dynamics.
Strategic takeaway
The phosphate co-product doesn’t just improve project economics — it reduces chemical supply risk, which has historically derailed several rare earth projects globally. Integrated chemistry matters as much as geology in this sector. It’s one of those technical details that doesn’t make headlines but materially strengthens the long-term viability of the project.
 
BTW - from my rough modelling....the acid revenue would account for about 15-20% of total revenue. So def worth doing some research on this...
 
ARUs profit margin will be better than the bulk of the world, I don't think anyone is pricing this in due to how far away this potential is and it needs to be proved out.

Secondly, NDPR is now up to 106 USD kg, which while its a peak is now well above 100, the spot sales are starting to look really good + this acid, its a good mix, while I appreciate the slide in SP is due to the delay, I am surprised the current SP, no shorting tho, which is really good.
 
Hi @patarnoster

This is why i raise it. It should be priced in. This is not a little side hustle for ARU.

They have done the following technical work:
  • Multi-year metallurgical pilot programs processing bulk ore samples.
  • Dedicated beneficiation and hydrometallurgical testwork.
  • Flowsheet optimisation specifically to recover phosphate before rare earth separation.
  • Pilot plant processing ~15 tonnes of ore through the full circuit.
They have real metallurgical data on acid generation, recovery rates, impurity behaviour and downstream separation. And this work was all checked out by the bank/equity DD.....so it was 'bankable'. ie the funds believe that this revenue will happen.

What this means for ARU:
  • They have ~144,000 tpa merchant-grade phosphoric acid (~78,000 tpa P₂O₅ equivalent). This is substantial — equivalent to a mid-size dedicated phosphoric acid plant. Most of it is surplus after internal process needs.
  • The 2022 DFS price it was sold at was about $800...and now it is double that...and only going up.
  • So this means about 15-20% of revenue....(they had about 10%)...and look it could be less...if NdPr price keeps going up...but it is all revenue!
  • And the BEST part...is the opex savings. Having this for "free" in their ore bosy means a 20-25% reduction in their opex costs.

This is why ARU will be one of the lowest opex cost operators in the world.
 
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