Australian Strategic Materials Ltd (ASX:ASM) has signed a non-binding business agreement with the Chungcheongbuk Province in Korea and the Vietnam Rare Earth Company (VTRE).
The agreement will see the three entities co-operate to build a global rare earths supply chain.
Under the terms of the agreement:
- VTRE and KSM Metals Co., Ltd (ASM’s subsidiary) (KSMM) agree to use reasonable endeavours to agree on the long-term supply of rare earth oxides from VTRE to KSMM.
- VTRE will use reasonable endeavours to develop their mine to ensure they have the capacity to supply rare earth oxides to KSMM with a value of approximately US$50 million in total over five years commencing in 2023, if commercial terms relating to supply can be agreed upon.
- The Chungcheongbuk provincial government agrees to provide administrative assistance to VTRE and KSM Metals to facilitate the supply of rare earth oxides from Vietnam to Korea. The long-term supply of rare earth oxides from VTRE to KSMM is intended to ensure certainty of the feedstock required for ASM’s Korean Metals Plant, before the Dubbo Project commences operation.
ASM continues to develop the Dubbo Project and process Dubbo Project materials through the Korean Metals Plant.
The company is an emerging vertically integrated producer of critical metals for new growth industries, high technologies and sustainable energy solutions.
Its "mine to metals" business model is to extract, refine and manufacture high-purity metals and alloys, supplying direct to global technology manufacturers.
The Dubbo Project is near the Australian town of Toongi, 25 kilometres south of Dubbo, in central-western New South Wales, and around 400 kilometres northwest of Sydney and Newcastle. Both these major cities connect to Dubbo via road and rail.
The project is construction ready, with all major permits approved.
ASM intends to develop the Dubbo Project to produce metal oxides in the form of chemicals, powders and metals at its Dubbo site that will be available in a range of standard and customised specifications, based on market requirements.
“We are delighted for this opportunity to work together to secure the supply of rare earth oxides before our Dubbo Project comes online,” ASM CEO Rowena Smith said of the agreement signing.
“This will support long-term sales agreements and production ramp-up at our Korean Metals Plant.
“We also greatly value this continued show of support for ASM by the Chungcheongbuk provincial government in Korea and look forward to growing our relationship with VTRE in Vietnam.”