Australian Rare Earths Limited (ASX: AR3) has released the results of a Pre-Feasibility Study for its flagship Koppamurra project in South Australia, presenting a development case defined by low capital intensity and rapid payback. The study outlines an initial 12-year mine life, with a base case post-tax net present value of A$858 million and an internal rate of return of 99%. With an initial capital expenditure requirement of A$178 million, the company expects to reach full capital recovery in less than one year from the start of production.

The project relies on shallow, free-digging open-pit mining of ionic adsorption clay mineralization. This operational approach, combined with a simple heap leach flowsheet, is intended to keep costs manageable and facilitate rapid progressive rehabilitation. The facility is expected to produce an average of 1,860 tonnes of total rare earth oxides annually. The specific product mix, which includes neodymium, praseodymium, dysprosium, and terbium, is highly sought by manufacturers of permanent magnets as western markets seek to secure supply chains independent of current Chinese export controls.

"The PFS reflects years of careful, methodical work across drilling, environmental studies, metallurgical testwork and engineering, and I'm proud to share these results. We have been deliberate and strategic at every step - designing the project and positioning the business for long-term success."

— Travis Beinke, Managing Director and CEO, Australian Rare Earths Limited

The project’s development pathway is supported by ongoing technical efforts, including the use of ANSTO’s new piloting facility in Sydney. The company is currently the first in Australia to operate a continuous pilot-scale circuit specifically for ionic clay rare earth ore. This pilot program is crucial for producing representative samples and gathering the engineering data necessary for advanced discussions with potential offtake partners. This technical work complements a broader project strategy that has benefited from a A$5 million grant under the Australian government’s International Partnerships in Critical Minerals program.

Looking ahead, the company is maintaining its momentum by prioritizing subsequent development milestones. The current project schedule is focused on the initiation of a Detailed Feasibility Study, which will build upon the foundational work established in this pre-feasibility analysis. Additionally, management is actively preparing for the formal submission of a Mining Lease Application, which is targeted for later in 2026. These steps are aimed at advancing the project toward a final investment decision while continuing to refine the environmental and technical parameters required for long-term production.

The potential for mine life extension remains a significant component of the project’s future outlook. While the current mine plan is based on a maiden ore reserve of 26 million tonnes, the company maintains a substantial exploration target that suggests the resource base could be expanded through further drilling. By positioning Koppamurra as a capital-efficient, long-life asset within a stable tier-one mining jurisdiction, the company aims to establish itself as a reliable supplier for Western supply chains as global policy shifts demand more diversified sources for critical magnet materials.

Read the full announcement: Koppamurra Pre-Feasibility Study