Hastings Technology Metals (ASX: HAS) has inked an offtake deal with Thyssenkrupp Raw Materials for the future supply of mixed rare earth carbonate (MREC) from its Yangibana project in Western Australia.
The memorandum of understanding signed between the parties is a non-binding agreement to supply 5000 tonnes per annum of MREC for a period of 10 years.
This deal is the fourth MOU to be signed for an offtake agreement and bumps the company’s supply commitment up to 73% of Yangibana’s projected production.
Thyssenkrupp is a German multinational conglomerate with 670 subsidiaries worldwide and is one of the world’s largest steel producers.
According to Hastings, the parties are aiming to reach agreement for an exclusive commercial offtake contract for Germany, as well as the supply chain of German and other European companies worldwide.
The formal agreement will be subject to Hastings starting operations and production of MREC from the Yangibana mine, as well as other conditions typical of commercial offtake contracts.
Under the deal, the MOU will lapse if there is no agreement executed within 36 months of signing the MOU.
Hastings executive chairman Charles Lew said the company planned to raise a “substantial” amount of equity during the year and was currently in talks with global financial institutions for project finance loans.
“The execution of this MOU is an important step to providing the capital markets and project finance bankers with confidence to work with Hastings to bring this world class rare earth mine into production,” Lew said.
Yangibana rare earths project
The Yangibana rare earths project is located in Western Australia’s Gascoyne region.
The processing plant is expected to commence production in late 2019, with an estimated annual output of 15,000 tonnes of MREC.
In the process of completing both beneficiation and hydrometallurgy pilot plants, MREC samples were produced, which were high in neodymium and praseodymium content. These materials are critical for the production of permanent magnets and other technology applications.
According to Hastings, the MREC will be capable of being further separated and refined to produce several individual rare earth oxides outside of Australia.
Shares in Hastings were up 6.67% by afternoon trade.