Hastings Technology Metals (ASX:HAS) has signed a non-binding heads of agreement (HoA) for a commercial offtake agreement for rare earth concentrate produced at the Yangibana Rare Earths Project in Western Australia.
The company says the HoA with Neo Performance Materials (TSX:NEO) is an important step forward in a potential strategic partnership between the 2 parties to strengthen their shared vision for an integrated mine-to-magnet rare earth supply chain.
Under the agreement, Hastings will supply up to 25,000 tonnes of annual concentrate production from stage one of Yangibana to Neo for use as additional feedstock at Neo’s rare earth separation facility in Sillamäe, Estonia.
The 10-year initial term will begin with the production of stage one concentrate in Q1 2025, which will be processed into mixed rare earth carbonatite (MREC) by a third party. This will continue until MREC is produced by Hastings at stage two of Yangibana, at which stage the offtake agreement is expected to evolve to supply up to 10,000 tonnes per annum of MREC.
Prior to the start of operations at Hastings’ planned stage two hydrometallurgical plant in Onslow, Neo and Hastings will cooperate to arrange the processing of the stage one concentrate into MREC prior to delivery to Neo’s facilities.
Hastings reports pricing for the concentrate will be determined using a mutually agreed formula based on the neodymium, praseodymium, dysprosium, and terbium content in basket value, referencing a published representative price for these elements with regards to the Total Rare Earth Oxide (TREO) content of the delivered concentrate.
The company says toll treatment and third-party processing fees for the stage one concentrate remain to be negotiated and will be applied as a set-off against the payment to Hastings.
Hastings reports it will work towards executing a binding offtake agreement by Q1 2023, and both parties have committed to cooperating to further evaluate joint downstream processing opportunities, including the production of oxides, metals, and alloys.
Both companies expect to complete future studies to determine whether the end product demand justifies future production increases from the Yangibana mine.
Commenting on the agreement, Hastings Technology Metals Executive Chair Charles Lew says: “The signing of the heads of agreement builds on Hastings’ strategic investment in Neo Performance Materials, representing a significant step forward in our vision to advance synergies between both companies, with a view to creating a fully integrated mine-to-magnet supply chain.
“… we see a unique opportunity to be a major player in building a European-centric magnetic supply chain during this decade”
We share this vision with our partner Wyloo Metals, who has been very supportive in our mine-to-magnet strategy as we see a unique opportunity to be a major player in building a European-centric magnetic supply chain during this decade.
This agreement with Neo represents the first step in a strategic partnership that will establish Hastings as a reliable supplier of rare earth feedstock to the European permanent magnets industry and further strengthens the staged development strategy for the Yangibana Project, with a pathway to early project cashflows from stage one concentrate sale.”
Also commenting, Neo Performance Materials CEO Constantine Karayannopoulos says: “This initiative supports Neo’s strategic efforts to continue to globally diversify our sources of rare earth feedstock and to provide our customers with maximum supply chain optionality.
The Yangibana resource is an attractive potential source of magnetic rare earths Nd-Pr in particular, and it could contribute to meeting the feedstock targets of our planned Estonia magnet manufacturing facility as well as a potential future expansion in North America. Neo looks forward to working towards a definitive agreement with Hastings on the material from the Yangibana project.”
Hastings Technology Metals is a Perth-based rare earths company with a goal to become the world’s next producer of neodymium and praseodymium concentrate, which are ‘vital’ components in the manufacture of the permanent magnets used in electric vehicles, wind turbines, robotics, medical applications, and digital devices.
Neo Performance Materials is an industrial materials manufacturer that specialises in magnetic powders and magnets, specialty chemicals, metals, and alloys.
Write to Harry Mulholland at Mining.com.au
Images: Hastings Technology Metals Ltd
