October 22, 2010 (Source: Bloomberg) -- Great Western Minerals Group Ltd. and the Rare Earth Extraction Co. Ltd., known as RareCo, said they may revive production of rare earths at the Steenkampskraal mine in South Africa’s Cape Province.

Great Western commissioned a study to assess prospects at the mine, 400 kilometers (250 miles) north of Cape Town, James Engdahl, the Toronto-listed company’s president and chief executive officer, said yesterday in a phone interview from his offices in Saskatoon, in the Canadian province of Saskatchewan.

The companies said the site, due to begin production in 2013, will be mined by Steenkampskraal Monazite (Pty) Ltd., which is 74 percent-owned by RareCo and 26 percent owned by black South African investors. Great Western owns 20 percent of RareCo and has factories in the U.K. and Canada that require rare earths.

China, which produces more than 90 percent of the world’s rare earths, reduced its second-half export quota for the minerals by 72 percent in July. Prices have climbed sevenfold in the last six months for cerium oxide, a rare earth used for polishing semiconductors, and other elements have more than doubled, according to Metal-Pages Ltd. in London, which tracks rare-earth prices.

Rare earths are a group of 17 chemically similar metallic elements, such as lanthanum, cerium, neodymium and europium. The elements are used in radar, high-powered magnets, mini-hard drives in laptop computers, catalytic converters for vehicles, electric-car batteries and wind turbines.

The Steenkampskraal mine was forced to close more than a decade ago after China "flooded the market, which cut prices," RareCo Chairman Trevor Blench said in a phone interview from Cape Town today.

The mine has the greatest volume of rare earths per metric ton of ore, Engdahl said, and can meet 1 to 2 percent of global demand for the minerals.

Engdahl said early estimates suggest it will cost about $15 million to bring the mine into production. Great Western Minerals may consider a secondary listing on the Johannesburg Stock Exchange in the future, he said without giving a date.