Australian Strategic Materials Ltd (ASX:ASM) (ASM) has awarded a conditional contract to Hyundai Engineering Co., Ltd. (HEC) for engineering, procurement and construction definition work (EPCD) for the Dubbo Project in Central West New South Wales.
This conditional contract was awarded to the South Korean-based company by ASM subsidiary Australian Strategic Materials (Holdings) Limited (ASMH).
The EPCD includes an Association for the Advancement of Cost Engineering standardised estimate (AACE Class 2 capital cost estimate), an operating cost estimate, a detailed project schedule, major project plans and early-stage engineering documentation.
“One of world’s leading EPC firms”
ASM managing director David Woodall said ASMH was delighted to have signed the EPCD contract with HEC for the Dubbo Project.
“We are thrilled to have HEC, one of the world’s leading EPC firms, seeking to partner with us on the Dubbo Project,” he said.
“With this signing, ASM moves one step closer to developing our Dubbo Project and progressing our vision for a vertically integrated strategic materials business.”
Completion of the EPCD will allow HEC to produce an open book cost estimate for the Dubbo Project. This will form the basis of an EPC offer by HEC to deliver the project.
Contract conditions
Conditions of the EPCD contract are:
- The contract price for the EPCD is A$46.7 million and is fixed for three months;
- ASMH will make payments based on the delivery of milestones;
- ASMH will make an initial non-refundable payment of A$500,000 to reimburse HEC for mobilisation expenses incurred;
- Conditions precedent to commencement of the work are all necessary approvals from both parties, and ASMH has issued HEC with a Notice to Proceed (NTP);
- Upon receiving the NTP, HEC will commence the work, which is anticipated to take approximately 14 months;
- If after three months ASMH has not issued a NTP, the contract price may be varied by mutual agreement based on reasonable and demonstrated costs; and
- If the NTP is not provided within 12 months of signing either party can terminate with no further obligations.
Emerging 'mine to metals' producer
ASM is a vertically integrated materials business and emerging 'mine to metals' producer of critical metals.
The company’s 100%-owned cornerstone Dubbo Project is a potential long-term resource of rare earths, zirconium, niobium and hafnium.
It represents an alternative, sustainable and secure source of these metals, critical for a diverse range of advanced and clean technologies.
ASM’s metals business is founded on an innovative metallisation process that converts oxides into high-purity metals, alloys and powders using less energy than conventional methods.
A pilot plant in South Korea demonstrated the commercial scalability of the process and successfully produced a range of high-purity metals and alloys, including titanium, neodymium, praseodymium, dysprosium and zirconium.
Following this success, ASM’s first metallisation plant has been opened in South Korea to initially supply a range of critical metals, including rare earth metals and alloys, zirconium and titanium.