A resources exploration company will drill test for rare earth elements in South Australia’s Mallee region, after initial results have been “encouraging”.
Kaili Resources Limited carried out testing in September 2025 at a number of roadside sites in its three tenements, around Lameroo, Karoonda and Karte, about 200 kilometres east of Adelaide.
Following testing, the company penned a letter to the ASX sharemarket to report on the results.
Principal geologist Mark Derriman told the ABC that while it was clear there were rare earth elements in the Mallee, higher concentrations would need to be found to warrant any future mining plans.
“We do our drilling, and we send the samples into a laboratory in Adelaide, and they come back with the elements and that’ll give us a parts per million (ppm) value,” Mr Derriman said.
Total Rare Earth Oxide (TREO) is the measurement used to determine the combined concentration and oxide value from all rare elements found in a sample at a specific location.
Dysprosium is a rare earth element used in magnets because of its resistance to demagnetisation at high temperatures. (Supplied: Northern Minerals)
Mr Derriman said its September results were encouraging, but ideal concentrations would need to be almost double this amount.
“We did get three [results] that were between 400 and 550 ppm, so that’s certainly very encouraging,” he said.
“Other explorers working in and around our tenements are achieving the same levels and higher than we’ve received.
“We’re encouraged by others getting up towards about 1,000 ppm total earth oxides.”
Mr Derriman said the company would conduct more drill testing along public roadsides in the first quarter of 2026, with holes about 250 or 500 metres apart.
From the ground to the globe
There are about 17 rare earth elements, which can be found at the bottom of the periodic table.
Despite their title, they are not as rare as their name suggests.
But they are in demand around the world for their use in many items, including magnets, motors, electrical products, medical equipment, and batteries.
The majority of Kaili Resources’ tenements in South Australia fall within the Southern Mallee District Council area, which has a strong farming identity.
Kaili Resources Limited says it will conduct further drill testing for rare earth elements in SA’s Mallee in early 2026. (Supplied: Kaili Resources Limited)
The region is home to broadacre and livestock properties, despite being a marginal rainfall area.
Mayor Ron Valentine said while the exploration showed there was potential to mine rare earth elements in his district, the process would need more in-depth investigation and consultation.
Southern Mallee District Council mayor Ron Valentine says he is cautiously optimistic about the initial detection of rare earth elements in his district. (Supplied: Southern Mallee District Council)
“I’m cautious for future generations because we don’t want to be the generation that just digs everything up and there’s nothing left,” he said.
“I’m always nervous about that, but you can’t stop progress either, so it’s cautious optimism.
“As long as they do it correctly and the state government has the right controls in place, then I think let’s find out what the next step is.”
Still early days
Mr Derriman said his company focused on exploration, not mining, and more consultation would be done if a significant concentration of mineralisation was found in the next round of drill testing.
He said landholders could be contacted to conduct tests on private properties, and Kaili Resources Limited would look to hold community presentations in Lameroo or Pinnaroo to answer questions.
The US Geological Survey shows Australia was equal-fourth in global rare earth mine production in metric tonnes in 2024. (ABC News Graphics)
“That involves talking to landholders and talking [about] compensation and access, and that can take a while,” he said.
How critical minerals power our daily lives from the moment we wake up
An SA government spokesperson said mining played a significant role in contributing to the state’s economy.
“Exploration, with proponents working and engaging appropriately within the communities in which they operate, is the lifeblood of new mining projects,” they said.
“We are world-class regulators with a ‘do no harm’ mandate, and explorers and miners operate within a strict regulatory framework that prioritises the safety and wellbeing of people, communities and the environment.”
China has the world’s largest rare earth reserve and leads the global production and processing market.
In 2024, Australia was the equal fourth-largest rare earth mining country, along with Nigeria and Thailand, mining 13,000 tonnes of rare earth materials, data from the US Geological Survey found.
