Australian Strategic Materials Ltd (ASX:ASM) has secured an additional supply of rare earth oxides from Vietnam as the company readies to ramp up production at its high purity critical metals plant in South Korea.
ASM has signed a binding agreement with Vietnam Rare Earth Company (VTRE) for 100 tonnes of feedstock this year, with both parties agreeing to further negotiate for a longer term supply agreement.
The Korean Metals Plant (KMP) in Ochang will produce critical metals and alloys using ASM’s patented, energy efficient metallisation process.
The plant is an integral part of ASM’s vertically integrated mine-to-metals business model and will be supported by raw material mined and processed at the company’s Dubbo Project in Central West NSW.
Additional security
“This agreement will ensure we have the feedstock needed to continue the ramp-up of production at KMP, as anticipated sales contracts progress this year,” ASM managing director and chief executive officer Rowena Smith said.
“While ASM remains committed to developing the Dubbo Project and processing Dubbo Project materials through the KMP, a longer term agreement with VTRE will provide the KMP with a multi-source feedstock option.
“This additional security of feedstock supply for the KMP, will, in turn, allow us to broaden our options for oxide sales from Dubbo once the project is up and running.”
High quality products
VTRE chair Luu Anh Tuan added: “VTRE is very happy to be progressing this partnership with ASM.
“With the synergies between our two companies, together, we can build a global rare earths supply chain that delivers our customers and partners with the highest quality products and service.“
The pricing for the US dollar-denominated feedstock will be calculated using a formula-based mechanism referencing published market prices for neodymium-praseodymium oxide.