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Northern Minerals Secures New Rare Earths Offtake Deal
The new deal between Northern Minerals and Germany’s thyssenkrupp Materials Trading is effective immediately.
Australian critical metals miner Northern Minerals (ASX:NTU,OTC Pink:NMEX) has secured a new offtake agreement for its rare earths after canceling a previous deal last week.
Last Tuesday (August 6), the rare earths producer terminated a rare earth carbonate offtake agreement with China’s Lianyungang Zeyu New Materials Sales, claiming that the Chinese firm was in “breach of the agreement” and had not worked to rectify the breach “within the required timeframe.”
The new deal between Northern Minerals and Germany’s thyssenkrupp Materials Trading (FWB:TKA) is effective immediately and encompasses all heavy rare earth carbonate produced at the company’s Browns Range pilot plant in Western Australia.
In addition to Northern Minerals providing thyssenkrupp with rare earth carbonate, the two companies have agreed to work together on implementing new separating technologies, as well as on any future expansions of the Browns Range project.
Heavy rare earth carbonate has a number of technological uses. Most importantly, dysprosium — one of the heavy rare earths — is used to manufacture the high-strength magnets vital to the electric and hybrid vehicle sector, as well as wind turbines.
The various uses of heavy rare earths in relation to green technology make the metals increasingly important to companies and countries around the world looking to shift towards cleaner energy consumption and greenhouse gas reduction.
“The continued shift of new car sales to electric vehicles is gaining traction, with all major carmakers introducing EV variants of existing models over the coming years,” George Bauk, CEO and director of Northern Minerals, said in a press release. “With this shift, both car and component makers are accelerating plans to invest further down the production chain in order to secure surety of supply.”
As demand for rare earths grows globally, the ability to procure them has become controversial in recent months. China, the leading producer and refiner of rare earths, has occasionally flexed its might by threatening to limit export of the technology metals.
During the current and ongoing trade war, speculation that China may cut off rare earths supply to the US has been heavily discussed. As a result, the US is currently looking to bolster its domestic production and refinement capabilities ahead of any embargoes.
The fear that much-needed rare earths may be hard to secure may be part of the reason thyssenkrupp looked to secure an offtake agreement with a heavy rare earths producer.
“Northern Minerals Limited is one of the few suppliers of rare earths outside China, so we are really looking forward to a successful collaboration between the companies. As the exclusive marketer of these high-quality products we have the opportunity to strengthen our customer relationships long-term and expand our positioning in this field,” noted Wolfgang Schnittker, CEO of thyssenkrupp.
Northern Minerals expects to enter continuous steady state production at Browns Range by mid-2020.
Shares of Northern Minerals were up 4.77 percent on Monday (August 12), trading at AU$0.067.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
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Originally from Calgary, Georgia has been right at home in Toronto for more than two decades. Graduating from the University of Toronto with an honors BA in journalism, she is passionate about writing on diverse topics, including resources, arts, politics and social issues.
At INN Georgia covers a wide range of topics, including energy, battery and critical metals and diamonds. In her spare time, Georgia enjoys watching documentaries and experiencing Toronto's vibrant food, arts and cultural scene.
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Originally from Calgary, Georgia has been right at home in Toronto for more than two decades. Graduating from the University of Toronto with an honors BA in journalism, she is passionate about writing on diverse topics, including resources, arts, politics and social issues.
At INN Georgia covers a wide range of topics, including energy, battery and critical metals and diamonds. In her spare time, Georgia enjoys watching documentaries and experiencing Toronto's vibrant food, arts and cultural scene.
Learn about our editorial policies.