Rare Earths, Dubbo Project, Growing Korea Relationship

Australian Strategic Materials (ASM) is a company focused on mining and processing rare earth elements and critical minerals that has a strong partnership with Korea. Business Korea conducted a written interview with ASM CEO Rowena Smith to ask her about her company's business activities, its Dubbo Project, and its relationship with Korea. She provided some unique insights on the first supply contract to a Korean company and her vision for the future of the growing relationship between her company and Korea as a whole. The following are excerpts from the interview.

Q: Could you explain your company's business?

A: ASM is an Australian company building a global rare earths and critical minerals business. We are a vertically integrated ‘mine to metals’ producer of critical minerals and high-tech metals needed to help solve the energy and technology challenges of today and the future.

The company's Dubbo Project is a long-term resource of rare earth elements, zirconium, niobium and hafnium located in New South Wales, Australia. In Dubbo, we have a globally significant, high-quality resource in which we have invested significantly in research and development to ensure we will have a product suite that will meet market needs.

In Korea, ASM has its wholly owned subsidiary KSM Metals. KSM Metals runs our Korean Metals Plant, which produces high-tech metals used in clean energy and advanced manufacturing industries. We signed our first sales contract for NdPr metal in September last year with Korean magnet company NS World and our first sales contract of NdFeB alloy in May this year with US company, Noveon.

We collaborate closely with industry, research institutions and the government to help Korea secure the critical minerals, rare earths, and high-tech metals it needs for its manufacturing industries.

Q: Please introduce ASM's Dubbo project.

A: The Dubbo Project site has a significant rare earths and critical minerals resource including neodymium, praseodymium, dysprosium, terbium, zirconium, niobium and hafnium. The project is construction ready with all major approvals and licences in place.

The project has a 20-year life of mine, based on current reserves, with potential for another 50 years based on resources and subject to approvals. The project is also close to infrastructure - just 25 km from the major Australian town of Dubbo, 400 km northwest of Sydney.

Dubbo also has compelling ESG credentials, with biodiversity offsets, the potential to use renewable energy, and our strong commitment to the local community.

Q: How important is the eco-friendly aspect of operation at the Dubbo Project?

A: ASM's Dubbo Project is not only focused on providing an alternative and secure source of critical metals, but it also puts a great emphasis on producing in an eco-friendly and sustainable manner, targeting net zero carbon emissions. Therefore, ESG principles are an essential pillar of the company's ethos.

For us, what's important is delivering that supply with ESG as a priority, as we are producing the minerals and metals that will enable the clean energy transformation it is important that our supply chain is also sustainable. Our entire process chain at ASM is very much focused on minimizing any environmental impact.

About one-third of the rare earth mine land owned by ASM is operated as a ranch to raise cattle and sheep. These operations help contribute to ASM's ongoing commitment to managing and monitoring biodiversity.

Q: What made you decide to build a plant in Ochang?

A: The Ochang metals plant was chosen as it enjoys logistical advantages with its close proximity to major manufacturers in Korea.

Ochang is a strategically important location for us as it is situated in the heart of an important manufacturing and technology precinct, which provides us with access to manufacturers and customers who have a need for the high-tech metals that can be produced at our metals plant. This enables us to collaborate with them on product development and technical work to refine our product suite to serve their needs.

The objective of what we're trying to do in Korea is to ensure that Korea has the resources it needs to support its manufacturing businesses, for as long as possible. One of our major goals was to use innovation that was developed in Korea to de-risk the Korean supply.

It is clear that there is a natural bond that exists between manufacturing-focused Korea and resource-rich Australia. Australia's and Korea's respective advantages, business culture, and shared values make us perfect partners to develop our business, using Australian natural resources and Korea's access to skills and technology. This mutual collaborative relationship between the two countries is the strengthening of the trade relationship in securing a long-term stable supply chain for Korean manufacturing.

We have also received great support from the North Chungcheong provincial government to locate our plant in the Ochang Financial Investment Zone.

In Korea, there are many companies that develop and produce electric vehicles, electronic appliances, and wind power generators, and industries related to those products have also developed. Our intent is to establish a partnership that would match supply of the critical minerals in Australia and demand in Korea to support these industries, to the benefit of both of us. In addition, Korea is currently dependent on China for its supply of rare earths. Our Dubbo Project provides an alternative and reliable rare earths and critical minerals supply chain for Korea.

ASM successfully built a commercial metal plant in Ochang and started producing strategic metals and rare earth alloy products from last year.

Q: It's interesting that you acquired Korean company Ziron Tech. Please share your story about that.

A: ASM acquired a 5% stake in Ziron Tech in 2019 to obtain access to clean metal process technology. It secured management rights by getting an additional 90% stake in Ziron Tech in November 2020. Since then, the company has changed its name to Korea Strategic Materials Technology (KSMT). KSMT has developed, what we call the LK Process. This uses less energy and produces high-grade metal alloys without the need for chlorination. This reduces the subsequent chlorine gas hazards. The LK Process is an alternative to the traditional Kroll Process for production of titanium, zirconium and hafnium metals. The LK Process is also an alternative to the traditional production methods for dysprosium and terbium metals.

Q: There was an opening ceremony at the Ochang plant last year. How are things coming along at the plant?

A: Our Korean Metals Plant is producing saleable neodymium praseodymium (NdPr) metal.

In September last year, ASM signed its first sales agreement for NdPr metal, marking another significant milestone for the Korean Metals Plant. The sales agreement was for 10 tonnes of NdPr metal to NS World, a Korean magnet maker, with first deliveries complete and sales to conclude in the December quarter.

In May this year we signed our first agreement for the sale of neodymium iron boron (NdFeB) alloy with US customer, Noveon. Commissioning our strip alloy castor was successfully completed in the first quarter of this year and we are now working on the development of customer specific NdFeB strip alloys to meet our contractual commitments. We expect first delivery of the NdFeB strip alloy to occur in the coming months.

We have also been progressing commercial scale commissioning of ASM's innovative metallization technology (the LK Process) for producing copper titanium alloy.

Q: What kinds of rare earth metals and alloys are produced by KSM Metals and how much can the Ochang plant produce?

A: The initial plant installation has the capacity to produce Neodymium praseodymium metal, Neodymium/iron/boron (NdFeB) alloy and Copper titanium alloy. Neodymium products in particular are highly valued for their application in permanent magnets. These are important components in electric vehicles, wind turbines and other renewable energy technologies.

The installed capacity is 2,200 tpa. This is 600 tpa of NdFeB alloy and 1,600 tpa of CuTi alloy. Capacity can be expanded to 5,600 tpa. This expansion is dependent on securing further offtake contracts.

Q: How do you supply the raw materials for production?

A: In April this year ASM signed a binding agreement with Vietnam Rare Earth Company (VTRE) for the purchase of rare earth oxides from Vietnam to be used as feedstock at KMP. This agreement begins a strategic partnership with VTRE which will provide greater oversight of ASM's supply chain and supporting our ESG commitments. Once the Dubbo Project comes into production, we intend to supply raw materials from Dubbo to the Korean Metals Plant which will be supplemented from ongoing supply from VTRE. The multi-source feedstock broadens ASM's options for oxide sales from Dubbo once the project is up and running.

Q: What is the reason you are paying attention to the rare earths market?

A: We identified the rare earths and critical minerals deposit at Dubbo in the 1980s, when there were only niche markets for these elements. The massive expansion of renewable energy, as we move towards net zero, is driving exponential growth in demand for rare earths and critical minerals. This means with the Dubbo Project, we now have the right resource at the right time. We are very excited about the opportunity to develop the Dubbo Project and integrate it with our Korean Metals Plant for the benefit of Korean industry.

Q: What are your future plans?

A: Korea is a key partner for the Dubbo Project, and through this project, ASM can supply rare earths and other critical metals to Korea. The goal is to supply critical metals including rare earths mined from Australian mines to the world to countries including the United States and Europe. ASM has eco-friendly process technology that uses less energy and emits less pollutants than conventional methods. With ESG management becoming increasingly important, ASM will grow into a more environmentally friendly and transparent company that cares for society.