MELBOURNE (Reuters) — Australian Strategic Materials said on Tuesday it had agreed to sell neodymium iron boron alloy from its South Korean metals plant to U.S.-based rare-earth magnet maker Noveon Magnetics, sending its shares up by more than a quarter.
Under the agreement, the company will sell 100 tonnes of the alloy, which is used in making permanent magnets for electric vehicles and wind turbines, to Noveon until March 2024. Rare earths are used in products from batteries to missiles.
The Australian rare earths developer is building out its Dubbo mine and processing plant 400 kilometers (250 miles) northwest of Sydney for which it is seeking customers and finance.
In the meantime, it will supply its Korean Metals Plant with feedstock of rare earth oxides from Vietnam, having signed a deal earlier this month.
Western governments such as the United States, South Korea, Japan, Germany and France are setting out supportive policies to build out rare earths supply chains in a bid to diversify away from China which produces around 90% of rare-earth magnets.
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“What’s super exciting in the last six months is that we’re seeing those policies being developed and being developed in a collaborative way across jurisdictions,” said CEO Rowena Smith.
“For us now to have a mined source of rare earth oxide from Vietnam going into a Korean metals plant, that we’re producing then not just metal but an alloy that is now going into the States,” she said. “It’s cutting edge.”
ASM said it was looking to develop a long-term partnership with Noveon for the off-take of rare-earth materials as it builds out its supply and customer base, and looks for supply deals for material from its Australian mine.
After separating and refining rare earths in Australia, it plans to set up metals alloy plants in client jurisdictions because magnet production is highly confidential, she added.
Shares traded last at 1.215 Australian dollars, up 19.6%.