Australia Strategic Materials Ltd (ASX:ASM) has signed a joint development agreement with Dongkuk Refractory and Steel (DK R&S) to construct a 250 kilograms per day commercial test plant in South Korea.
ASM’s subsidiary Australian Strategic Materials (Holdings) Limited and the subsidiary of Dongkuk Industries (KOSDAQ:005160) will utilise the innovative and patented low emission, high purity metal-refining technology of Ziron Technology Corporation in which ASM is acquiring a 95% interest.
The proposed plant is being designed, developed, assembled and installed to verify a 250 kilograms commercial grade continuous reduction system using the ZironTech patented metal-refining technology.
Design, assembly and verification of the 250-kilogram reduction furnace will be undertaken at the facilities operated by DK R&S under the supervision of a temporary joint task force, with the completed furnace jointly owned by ASM and DK R&S.
To prove technology at scale
ASM managing director David Woodall said: “The agreement with DK R&S brings together the strengths of ASM with its innovative metal technology and DK R&S, a leading innovative manufacturer of metals and refractory products within the Korean and global markets.”
“This production facility will prove Zirontech’s patented low emission, high purity metal-refining technology at scale, paving the way for a 3,000 to 5,000 tonne per year metal plant in Korea.
“Our team in Korea is now progressing the confirmation of the continuous commercial metal production process with significant benefits for Korea, Australia, and the global customers that are faced with changing dynamics in the critical metals supply chain.”
The company has a market cap of approximately $375 million and shares have been up more than 11% to an intra-day high of $3.50.
Commercial test plant
Total budget for the commercial test plant is US$1 million, which is split in a 60:40 ratio between DK R&S and ASM.
The basic and detailed design of the commercial test plant is scheduled to be completed within four months from the date of the agreement
Ownership of relevant intellectual property is retained by ASM and the agreement will terminate if the testing is not successful within 12 months of signing.
Dongkuk Industries Group
Established in 1974, DK R&S has been supplying refractories, fine ceramics, steel manufacture to various industries globally and domestically within Korea for more than 46 years.
Dongkuk Industries Group was founded as Daewonsa in 1967 and is recognised as a global leader of cold-rolled steel, refractories and tubular wind power towers.
The group, which includes Dongkuk Industries, Dongkuk Refractory and Steel, Dongkuk Structural and Construction and DK DongShin, is recognised in Korea for innovation and the development of technology.
Partner discussions
ASM continues to progress strategic partner, offtake and financing discussions in Korea.
These discussions are preliminary in nature and are incomplete and it is uncertain whether any of these discussions will lead to a proposal for the consideration of ASM’s directors or shareholders.