Critical metals producer Australian Strategic Materials (ASX:ASM) has signed a binding agreement with Vietnam Rare Earth Company (VTRE) for the purchase of rare earth oxides (REO) from Vietnam.
Under the agreement, VTRE will deliver 100 tonnes of product for the remainder of 2023 to be used as feedstock at the company’s Korean Metals Plant (KMP). The pricing for the feedstock will be determined using a formula-based mechanism referencing published market prices for neodymium-praseodymium (Nd-Pr) oxide.
Additionally, Australian Strategic Materials says both parties have committed in good faith negotiations for a longer term supply agreement.
Commenting on the agreement, Australian Strategic Materials Chief Executive Officer (CEO) and Managing Director Rowena Smith says: “This agreement will ensure we have the feedstock needed to continue the ramp-up of production at KMP, as anticipated sales contracts progress this year.
“This agreement will ensure we have the feedstock needed to continue the ramp-up of production at KMP, as anticipated sales contracts progress this year”
In sourcing the required oxides from Vietnam and building our relationship with VTRE, we are also ensuring greater oversight of our supply chain, which supports our sustainability and governance commitments to both our customers and shareholders.
While ASM remains committed to developing the Dubbo Project and processing Dubbo Project materials through the KMP, a longer term agreement with VTRE will provide the KMP with a multi-source feedstock option. This additional security of feedstock supply for the KMP, will, in turn, allow us to broaden our options for oxide sales from Dubbo once the project is up and running.”
Vietnam Rare Earth Company Chair Luu Anh Tuan says the company is very happy to be progressing this partnership with Australian Strategic Materials.
“With synergies between our 2 companies, together we can build a global rare earths supply chain that delivers our customers and partners with the highest quality products and services.”
Australian Strategic Materials reports the agreement with Vietnam Rare Earth Company follows from the non-binding memorandum of understanding (MoU) signed in December 2022 with Vietnam Rare Earth Company and Korea’s Chungcheongbuk Province.
Australian Strategic Materials is a vertically integrated producer of critical metals for new growth industries, high technologies, and sustainable energy solutions.
The company’s Dubbo Project near the namesake town in central New South Wales is considered prospective for light and heavy rare earths, as well as zirconium, niobium, and hafnium. The company intends to develop the project to produce metal oxides in the form of chemicals, powders, and metals which will be refined into critical metals at its Korean Metals Plant in the Ochang Province of South Korea.
Vietnam Rare Earth Company is a Vietnamese light rare earth compound manufacturer with an aim of becoming a producer and supplier of rare earths.
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