Australian Strategic Materials Ltd (ASX:ASM) (OTCMKTS:ASMMF) will begin detailed design engineering work on a metals processing plant in Korea, following a scoping study that confirmed its economic potential.
The Korean Metals Plant will initially be used to produce high-purity neodymium iron boron (NdFeB) powder and titanium powder, which can be used to create rare earth permanent magnets, currently in high demand in Korea.
ASM’s board has approved US$1.5 million for detailed design engineering of the plant, which will provide a fully engineered scope of works and further refine capital estimates before a final investment decision, which is due to occur by June this year.
“An excellent foundation”
ASM managing director David Woodall said the scoping study was an important plank in its goal to commence providing critical metals to the Korean manufacturing sector.
“Our ability to commercially produce high-purity critical metals for advanced technology manufacturers in Korea gives ASM an excellent foundation to be an independent fully integrated critical metals producer globally,” he said.
“Korea is phase one. Once complete, this will provide the template for future ASM metals plants in other regions.
“We’ll now continue to progress our ‘mine to manufacturer’ strategy using our pilot plant furnaces in the second half of 2021, with the production of titanium and rare earth permanent magnet alloy powders.”
Shares in the company, which has a market cap of approximately $633.3 million, have been up as much as eight per cent to A$5.75.
Promising economics
ASM estimates capital expenditure on the plant will be in the region of US$35-45 million, with annual revenues of up to US$190 million and annual EBITDA of up to US$50 million.
It plans to expand the plant’s 5,200 tonnes per annum capacity to over 16,000 tonnes by 2024, with commercial production of titanium and NdFeB metal powder from ASM’s existing Korean commercial pilot plant set to begin this quarter.
In addition to the NdFeB and titanium powders, ASM has forecasted creating hundreds of tonnes of titanium metal, nickel-titanium alloy, dysprosium metal and zirconium metal by 2026.
Good signs in testing
Ziron Tech, a subsidiary of ASM co-created through Korean Government funding, developed and patented an innovative, low-cost, low-energy metallisation process to create the NdFeB and titanium powders, and it has been proven to stand up to rigorous testing.
Powders produced at a pilot plant by the Ziron Tech team have already been used by the Korean Institute of Rare Metals (KIRAM) to produce rare earth permanent magnets.
KIRAM produced two kilograms of pre-sintered permanent magnets and has carried out successful tests, confirming the magnetic properties and quality.
This testing provides a strong indication that ASM’s NdFeB alloy is suitable to produce rare earth permanent magnets that are commercially in demand.
- Daniel Paproth