• Namibia Critical Metals raises Lofdal’s development cost to $347.9 million, up from $207 million in 2022.

• The project delivers a post-tax NPV of $275.5 million and an IRR of 19%, with a 4.2-year payback.

• Japan’s JOGMEC already owns 40% of Lofdal after investing $17 million.

The Lofdal rare earths project ranks among several potential new mines under development in Namibia. Namibia Critical Metals estimated its cost at $207 million in 2022 based on a 16-year development plan.

Namibia Critical Metals now expects the project to require $347.9 million in total investment, according to a prefeasibility study released on Dec. 3. The company confirms that the figure exceeds the 2022 preliminary economic assessment.

“The increase in capital expenditures reflects inflation since the 2022 preliminary economic assessment, the expansion of the hydrometallurgical scope, the integration of pre-stripping and the revision of energy-infrastructure requirements,” the company states in the release.

The investment will fund the construction of a mine designed to produce 1,478 tonnes per year of total rare earth oxides (TREO). The output includes dysprosium, terbium and yttrium, which manufacturers primarily use in wind-turbine magnets. The company estimates a 13-year mine life and projects that developers can recover capital in 4.2 years.

The document reports a post-tax net present value of $275.5 million and a post-tax internal rate of return of 19%. Namibia Critical Metals says it will continue to optimize these metrics, notably through further exploration. The company adds that Lofdal already holds “all necessary permits, with a 25-year licence,” which allows construction to start once financing is secured.

The company has not disclosed its financing strategy or a development timetable.

The development of Lofdal comes as rare earths gain strategic importance in the race for critical minerals, with major powers seeking to reduce dependence on China for supply chains.

Japan has already strengthened its position at Lofdal. Through a joint-venture agreement with Namibia Critical Metals, Japan Oil, Gas and Metals National Corporation (JOGMEC) holds 40% of the project after investing about $17 million. The objective is to secure a “long-term sustainable supply of heavy rare earths for Japan.”

This article was initially published in French by Aurel Sèdjro Houenou

Adapted in English by Ange Jason Quenum