A DISAGREEMENT over the terms of a joint venture to develop a rare earth project at Nyngan has reached the Victorian Supreme Court.
One half of the partnership, Melbourne-based Jervois Mining Limited, told the Australian Stock Exchange this week it was unable to resolve a dispute with Canadian-based partner EMC Metals Corporation (EMC), and it had begun proceedings in the court to determine the latter’s entitlement to a joint venture interest in the Nyngan Scandium Project.
In February, Jervois Mining Limited announced a feasibility study EMC had provided did not meet the requirements of the exploration joint venture agreement entered in February 2010 and, as a result, had not earned its 50 per cent interest. The company did not elaborate on what EMC’s alleged shortcomings were.
The same day, EMC released a statement arguing that it had met all the requirements, which it said included delivering to Jervois Mining Limited a $1.43 million cash payment and a technical report on the feasibility of the project.
A month later, EMC announced it would “take all lawful steps to secure its proprietary rights to the 50 per cent joint venture interest in the Nyngan Scandium Project”, and that it would continue discussions with Jervois Mining Limited to try to resolve the dispute.
The two companies entered the joint venture two-and-a-half years ago to explore and develop a 9000-hectare section of land 25km from Nyngan after exploratory drilling by Jervois Mining Limited as early as the 1980s indicated its potential to yield scandium.
It is not clear what impact the dispute between the partners will have on the timeline for the development and its associated prospects when it comes to economic benefits for and job creation in the region. At the time of going to print, Jervois Mining Limited had not responded to a call from the Daily Liberal.
In the time since the joint venture was signed to establish an open cut mine and processing plant to extract about 74,000 tonnes of scandium ore a year for 20 years, a feasibility study was commissioned and environmental work was begun at the site.
An environmental assessment is yet to be prepared by the joint venture, outlining plans to resolve issues raised in the companies’ submission to the Director General of Planning & Infrastructure. Feedback to the submission included environmental, cultural and consultation concerns raised by the Central West Catchment Management Authority.
Scandium and its alloys are used in the aerospace industry, sports equipment, laser research, specialty welding wire and electronics. Its use is severely restricted because it is so scarce and there are no primary scandium mines in production in the world.