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ASM’s rare earth project moves to staged foreign investment

Manufacturing News

Australian Strategic Materials (ASM) which is developing a rare earths mine at Dubbo in New South Wales and value-added metal manufacturing plant in South Korea has moved to a staged investment approach to to match development work underway for the project.

The company announced that Korean KCF Energy Co. Ltd (KCF), a company owned by the company’s Korean Consortium backers, has agreed to invest US$15 million of equity funding in ASM.

This will be followed by further equity investments as milestones are delivered through front-end engineering and design and early design of key work packages being negotiated with Hyundai Engineering and Construction (HEC).

The equity steps involve the Consortium:

  • Facilitating a strategic investor to acquire 10 per cent of ASMH shares for US$125 million
  • Making an additional US$105 million equity investment in ASM (which would be subject to shareholder approval)
  • And investing US$50 million via a convertible bond for a 30 per cent stake in KSMM (ASM’s subsidiary that owns its Korean Metals Plant).

The Korea Consortium is comprised of Cerritos Holdings Co., Ltd, Polo Equity Partners LLC (f.k.a. Kamur Partners LLC) and ACE Equity Partners LLC who in 2021 agreed to a $US250 million equity investment for 20 per cent in the Dubbo Project.

The new arrangements will also see a the Korean Consortium sign a 2,800 tonne, five -year offtake agreement for the supply of the key permanent magnet alloy Neodymium Praseodymium (NdPr).

ASM Managing Director David Woodall said: “We welcome this investment in ASM from our Korean partners as we continue discussions and agree on terms to progress our Dubbo Project and importantly ASM’s mine-to-metals strategy.

“The potential transactions represent a phased investment …and are an endorsement of ASM’s significant progress in Korea. This includes the delivery of our first metals plant in Korea, which is an alternative supplier of strategic metals.”

ASM’s proprietary processes convert oxides into high-purity metals, alloys and powders using up to 70 per cent less energy than conventional methods.

Picture: Australian Strategic Materials: Neodymium Praseodymium (NdPr) alloy produced at its Korea metals pilot plant

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