Southern Alliance Mining (SAM) QNS signed a memorandum of understanding (MOU) to acquire two rare earth mines in Perak and Johor Bahru in Malaysia, just two weeks after it said it was in advanced talks to buy the mines.
The signing of the MOU gives SAM a 40% stake in MCRE Resources Sdn Bhd (MCRE), which operates an ion adsorption clay rare earth mine in Perak, and a 100% stake in Paramount Synergy Sdn Bhd (Paramount), which owns an ion adsorption clay rare earth mine in Johor but is still in the exploration mining phase.
SAM is a producer of high-grade iron ore produced in Malaysia, and is listed on the Catalist Board of Singapore Exchange (SGX). It owns two other mines in Malaysia, an iron ore producing mine in Chaah, and a gold mine in Johor.
Speaking at the signing of the MOU on April 17, Lim Wei Hung, executive director and chief operating officer of SAM said that the acquisition of the two rare earth mines is “a significant step towards accomplishing our diversification goals”.
MCRE has 2,161 hectares of mine, and has 33,000 tonnes of rare earth oxide, according to its report in 2022. Paramount has 1,863 hectares of mine and has drilled 1,200 holes.
Lim clarifies that the rare earth materials extracted are non-radioactive rare earth elements (NR-REE), which was a point of contention among the public as many misunderstood rare earth materials to be radioactive.
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Lim says that MCRE had obtained all its operating and mining licences, and commenced mining operations in 2022 with the application of the in-situ leaching method, whereby a liquid is injected into the ground to extract the rare earth mineral, instead of excavating the land. It exported its first batch of rare earth carbonate in February 2023.
“A major consideration for SAM was ensuring that the disruptive environmental impact as a result of its rare earth mining operations is minimised,” said Lim. “In this regard, MCRE has adopted the in-situ leaching method to extract NR-REE carbonates which does not involve massive open pit mining and therefore, helps to preserve the natural landscape with an overall low carbon emission footprint.”
According to SAM, MCRE is the first Malaysian company to have an exclusive right to utilise this mining method for rare earth from China in Malaysia.
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Meanwhile, Paramount is currently in its exploration phase.
Shares in Southern Alliance Mining closed at 82 cents on April 17.
