ASM project launched as our second rare earths producer

Australian Strategic Materials (ASM) has kickstarted its Dubbo, NSW rare earths project with the signing of a $340.7 million ($US250m) framework agreement with a South Korean consortium.

A consortium of South Korean Investors will receive 20 per cent of the equity in the holding company owner of the Dubbo project, with the partners planning a second fund which will enter into an offtake agreement for NdFeB (neodymium-iron-boron) alloy to be manufactured at ASM’s Korean Metals Plant.

The agreement marks ASM’s emergence as a second, significant source of critical rare earths outside of China – Australia’s Lynas Rare Earths is the only other major producer.

While some will question ASM’s decision to develop a domestic Korean permanent magnet manufacturing business to utilise output from the planned mine at Dubbo, it recognises the partnership between Korea and Australia to develop processing technology, and the wish of industrial nations such as Korea to control the value chain for critical metals.

The Dubbo Project contains rare earths, zirconium, niobium, and hafnium, all critical to products such as computer hard drives, smart phones and, in defence, electronic displays, guidance systems, lasers, and radar and sonar systems.

ASM Chair, Ian Gandel, said the agreement creates a pathway for ASM to develop the Dubbo Project and execute its ‘mine to metal’ strategy.

Gandel said: “We welcome the encouragement received from the South Korean business community and Government, which are grounded in strong relationships.

“We would also like to thank the Australian Government for its interest and support for our projects.”

The investing partnership is three unrelated Korean private equity firms – Cerritos Holdings Co., Ltd, Kamur Partners LLC and ACE Equity Partners LLC – which will arrange strategic investment from major Korean industrial companies.

ASM recently announced conditional finance support from Export Finance Australia (EFA).

ASM managing director, David Woodall said the agreement opened the financing pathway for the development of the Dubbo Project.

Woodall said: “We are delighted our new South Korean partners have recognised the mutual value of the strategic investment opportunity represented by our integrated manufacturing capability that offers a new, cleaner source of critical metals and alloys to a rapidly expanding market.

“Cementing our ties with South Korea’s advanced manufacturing sector represents an incredible opportunity to create value from our Dubbo Project.”

Picture: ASM/framework agreement

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