Great Western Minerals Group (GWMG) has entered into a heads-of-terms agreement with Chinese firm Ganzhou Qiandong Rare Earth Group (GQD) to build a rare earth separation plant in South Africa, near GWMG’s Steenkampskraal operation.

Under the terms of the agreement, a new joint venture (JV) firm called Great Western GQD Rare Earth Materials will be created, with GWMG holding a 75% interest and GQD holding the remaining 25%.

The JV will provide services such as design, manufacturing, construction, commissioning and operation of the planned separation facility.

The plant will be fed with rare earth chloride from GWMG’s Steenkampskraal monazite mine and with feedstock from sources in the region.

GWMG president and CEO Jim Engdahl said the firm’s team of metallurgists will work closely with GQD’s team to finalise process and plant design in order to commence construction of the plant in early 2012.