VHM’s flagship Goschen rare earths and minerals sands project in north-west Victoria has seen a major milestone.
An optimisation review has resulted in a capital expenditure reduction for Phase 1 from $483 million to $337 million.
VHM reviewed capital costs for the project in conjunction with the completion of initial detailed engineering design for the base plant, early contractor involvement in key offsite infrastructure, and selection of a mining services partner.
Major cost reductions were seen in civil works, road and pipeline construction.
“The development process of detail design and early contractor involvement to optimise our approach has delivered capital benefits which indicate that Goschen is one of the lowest capital cost rare earth projects in Australia,” VHM chief executive officer Ron Douglas said.
“Optimisation of capital costs is a normal part of asset management. We are in an environment where fiscal discipline is the first line of defence to cyclic trends and DFS stage estimates will always be refined once foundation plant design inputs, and principal mining services are in place.
“While this is one of the most challenging markets to construct and operate in recent years, the reduction of our capital costs ensure that this project is competitive and at the bottom of the cost curve.”
The recent conclusion of the Inquiry and Advisory Committee (IAC) public hearing also marks an important milestone in Goschen’s progress towards a ministerial decision.
The hearing concluded on April 30, and the IAC has 40 business days to prepare and issue their recommendation report to the Victorian Minister for Planning.
Following a favourable ministerial outcome, the Goschen mining licence application will then be assessed by the Earth Resources Regulator.
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