ASM Signs Three-Way MOU to Enhance Rare Earth Element Supply Chain

Australian Strategic Materials Limited (ASX: ASM), a leading rare earth element (REE) producer, has announced the signing of a non-binding Memorandum of Understanding (MOU) with ASX-listed nickel producer Blackstone Minerals Limited (ASX: BSX) and rare earth element refiners, Vietnam Rare Earth Company (VTRE).

Collaborative Efforts to Strengthen REE Supply Chain

The three-way agreement establishes a framework for collaboration among the companies in various areas, including:

Identifying and securing REE mining opportunities in Vietnam to serve as feedstock for VTRE's REE refinery.

Strengthening the parties' capabilities in securing REE mining concessions.
Potential co-investment by Blackstone, ASM, and VTRE.

Securing long-term offtake of REE oxides.

Under the new MOU, VTRE has the opportunity to explore ways to increase its REE oxide production by utilizing the beneficiation plant at Blackstone's Ban Phuc Nickel Mine (BPNM) in Vietnam. The BPNM facility can be used to process locally sourced REE ores, which are then refined at VTRE's established REE refinery.

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Building on Existing Relationship

This MOU is an extension of ASM's existing relationship with VTRE and demonstrates the commitment of both companies to explore long-term supply agreements and manufacturing opportunities. In April 2023, ASM signed a binding agreement with VTRE for the purchase of rare earth oxides from Vietnam, which would be used as feedstock at ASM's Korean Metals Plant (KMP). The intention is to progress this agreement to a further long-term supply agreement.

Positive Outlook for the Sector

ASM's Managing Director & CEO, Rowena Smith, expressed optimism about the potential of this collaboration, stating, "This MOU has the potential to drive a more collaborative approach within the rare earth elements and critical minerals sector and deliver positive outcomes for all parties involved. We have already established a strong relationship with the VTRE team, and I am excited by the progress they are making to increase their oxide production capacity. "

VTRE Chair, Mr. Luu Anh Tuan, also expressed enthusiasm for the MOU, saying, "I welcome the opportunity to work with Blackstone on this MOU and building a long-term relationship, extending my existing relationship with ASM. This is a great opportunity to develop the full value chain for rare earths in Vietnam. "

Establishing a World-Leading Rare Earths Business

The MOU was signed at a formal ceremony at the Australian Embassy in Hanoi, Vietnam, witnessed by His Excellency Andrew Goledzinowski, Australian Ambassador to Vietnam. Commenting on the MOU, Ambassador Goledzinowski stated, "Glad to see Australian and Vietnamese companies partnering together to form new critical minerals supply chains. Both countries are playing a role in diversifying and de-risking the availability of rare earth elements. This agreement leverages Australia's world-leading regulatory frameworks for mining and resources, and Vietnam's abundant labor supply and strong manufacturing base. "

With this MOU, ASM, Blackstone, and VTRE aim to progress discussions towards establishing a world-leading fully integrated rare earths business. This collaboration has the potential to enhance the rare earth element supply chain and contribute to the sustainable development of technology and manufacturing industries.

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