ASM inks deal to sell rare earths to US magnet maker

Australian Strategic Materials (ASX: ASM) has inked a five-year agreement to supply neodymium iron boron (NdFeB) alloy from its Korean Metals Plant (KMP) to magnet maker USA Rare Earth LLC.

The deal will secure about 60% of privately-held USA Rare Earth’s metal and alloy needs for the making of permanent magnets for electric vehicles (EVs) and wind turbines until it begins using materials from its own Round Top Mountain reserve in Texas. The Round Top project is under an 80-20 joint venture between USA Rare Earth and Texas Mineral Resources (US-OTC: TMRC).

First supply of NdFeB alloy from ASM’s KMP in South Korea is expected in 2024, which will be sent to USA Rare Earth’s Stillwater facility in Oklahoma.

“ASM provides us with predictable access to a non-Chinese supply of rare earth metals,” USA Rare Earth CEO Tom Schneberger said. “[It] allows us to ramp up our initial production and accelerate our goal of generating revenue, while we continue to construct our own mine.”

ASM officially opened KMP in May last year to produce critical metals and alloys to customer specifications. The initial focus will be on NdFeB and titanium alloy. The plant is located in Ochang province, about 115 km south of Seoul.

In May, the Australian firm signed a similar deal with another U.S.-based rare-earths magnet maker, Noveon Magnetics, to sell 100 tonnes of the alloy. It is also developing its own rare-earths mine Dubbo in New South Wales.