St George Mining Ltd (ASX:SGQ) has struck a strategic alliance with US-based REAlloys Inc., a government-backed supplier of critical magnet materials, to advance and commercialise rare earths production from its 100%-owned Araxá Project in Brazil.
The deal positions St George as a potential supplier to the US defence and clean-energy supply chain, which has been actively seeking to diversify away from Chinese dominance in rare earths.
Strategic downstream partnership
The memorandum of understanding (MoU) with Ohio-headquartered REAlloys will see both companies collaborate across multiple workstreams. These include metallurgical test work on Araxá samples, technology reviews and optimisation of the project’s processing flowsheet to deliver rare earth products suitable for magnet manufacturing.
The partnership also provides for discussions on marketing strategies, with REAlloys considering a long-term offtake agreement covering up to 40% of Araxá’s rare earths output.
REAlloys is an established producer of high-performance neodymium iron boron (NdFeB) and samarium cobalt (SmCo) magnet materials, supplying the US Department of Defense, the Defense Logistics Agency, the Department of Energy’s Ames National Laboratory, and industrial customers in aerospace and electronics.
Araxá’s world-class resource
The Araxá Project hosts South America’s largest and highest-grade carbonatite-hosted rare earth elements (REE) deposit, and ranks as the second-highest-grade REE deposit in the Western world. Its mineral resource stands at 40.6 million tonnes grading 4.13% total rare earth oxides (TREO), alongside 41.2 million tonnes grading 0.68% niobium pentoxide (Nb₂O₅).
High-grade mineralisation has been confirmed from surface, with grades up to 33% TREO and 8% Nb₂O₅ reported from drilling. Current drilling is targeting extensions beyond the existing resource envelope, with initial assays already confirming scale and continuity that point to a potential resource upgrade.
Read more: St George Mining confirms high-grade rare earths and niobium at Araxá Project
Unlocking US market access
Executive chairman John Prineas said the REAlloys alliance underlines Araxá’s global significance.
“We are extremely excited to enter into this strategic alliance with REAlloys, which greatly bolsters the development potential for the rare earths opportunity at our 100%-owned Araxá Project,” Prineas said.
“REAlloys is one of the leading suppliers of high-performance rare earths magnet materials to the US defence and industrial sectors, which means this strategic alliance creates an attractive pathway for St George to access the fast-growing and lucrative downstream sector of the US rare earths industry,” he added.
“The Araxá Project boasts a world-class, hard-rock rare earths resource that is the same style of deposit as the two major rare earths mines outside of China — the Mt Weld mine of Lynas Corporation and MP Materials’ Mountain Pass.”
Prineas noted that the arrangement reflects broader shifts in the rare earths industry, citing the US Department of Defense’s multibillion-dollar deal with MP Materials as evidence of a supply chain realignment.
“Not surprisingly, St George is attracting strong interest from downstream players interest in the Araxá Project as they look for new sources of high-grade rare earths materials,” he added.
Local and global integration
Araxá’s development benefits from favourable logistics in Brazil’s Minas Gerais state, near established niobium producer CBMM, with government support in place to fast-track approvals. St George is also part of Brazil’s MagBras Initiative, which aims to establish a domestic rare earths-to-magnets supply chain.
Read more: St George Mining delivers rare earths sample to MagBras in push for Brazilian supply chain
At the same time, the company is positioning Araxá as a key link in ex-China supply chains for critical minerals, with the REAlloys alliance offering direct exposure to the US defence and technology sectors.