Australian Strategic Materials Raises $55m To Fund Korean Expansion And US Growth Plans

Australian Strategic Materials (ASX: ASM) has raised $55 million through an institutional placement to accelerate alloy production at its Korean Metals Plant (KMP) and progress its downstream rare earth expansion strategy.

The placement, which the company conducted at $1.20 per share, attracted strong participation from new and existing institutional investors across Australia and overseas, including significant support from US-based funds.

Managing director Ms Rowena Smith said the successful raising reflects international recognition of ASM’s metallisation capability and provides full funding to complete the next phase of growth.

Accelerated Production Growth

Funds from the placement will drive completion of Phase 2 ramp-up activities at the KMP, where ASM is looking to double capacity to 3,600 tonnes of neodymium-iron-boron (NdFeB) alloy per annum.

The company described the KMP as a cornerstone in its “mine-to-metals” strategy, that enables it to deliver rare earth metals and alloys directly into Western supply chains.

The Phase 2 program will require approximately US$8m in capital expenditure over an 18-month period and, once complete, is forecast to generate annual revenues of around US$204m and EBITDA of approximately US$26m, supported by existing long-term supply agreements with magnet manufacturers.

Beyond the immediate expansion, ASM is evaluating a potential Phase 3 uplift to 5,600 tonnes per annum, alongside a second facility planned for the US to meet rising Western demand for non-Chinese sources of the rare earth alloys essential for EVs, wind turbines, and advanced defence applications.

Global Supply Chain Security

Ms Smith said the placement is happening at a time of heightened global focus on securing critical minerals supply chains as export restrictions and geopolitical tensions continue to increased urgency among governments and industry.

“In this unpredictable and volatile environment, the KMP represents an established, stable producer of rare earth metals and alloys, and offers a long-term, secure supply of critical materials,” she said.

The company will use the strengthened balance sheet to advance additional expansion opportunities, including support for a potential American Metals Plant (AMP) that would leverage ASM’s Korean expertise to service the US magnet industry.

The proposed AMP would begin with a 2,000-tonne-per-year alloy capacity, employing up to 150 skilled workers and establishing a non-China feedstock pathway for US-based manufacturers, with the company currently assessing several state-based incentive options.

ASM – which views its growing network of partnerships with magnet makers in the US, Korea and Europe as critical to its long-term strategy – has signed a five-year sales and tolling framework with USA Rare Earth, and recently executed a memorandum of understanding with Neo Performance Materials to expand its heavy rare earth sales.

Dubbo Project And Strategic Funding Position

Alongside its downstream expansion, ASM continues to advance the Dubbo project in New South Wales as a long-life source of rare earths and critical minerals.

Export Finance Australia, the US Export–Import Bank, and Export Development Canada have provided more than $1.5 billion in conditional debt funding support for the project, positioning it as one of the most advanced rare earth developments outside China.

ASM expects to hold approximately $84m in cash following completion of the placement, strengthening its capacity to manage near-term debt obligations in Korea while maintaining flexibility for ongoing project development, capital Ms Smith said would give the company momentum to pursue its broader growth objectives across multiple jurisdictions.

“This strongly supported placement reflects growing global recognition of ASM’s proven capability in downstream rare earth metallisation and our broader mine-to-metals strategy—we are seeing multiple opportunities to collaborate with government and industry peers to strengthen ASM’s position across the rare earth supply chain,” she added.