The company is now assessing possible locations for the plant, including Onslow in WA’s northwest coastal region and Estonia under the terms of an MOU with the Estonian government. Alternatively, Hastings may look at undertaking the HM processing in Saudi Arabia.
The final decision on the location will be subject to further analysis of possible avenues of finance and the potential to evolve a workable “mine-to-magnet” supply chain.
Hastings’ MOU with Saudi Arabia opens up the possibility that the kingdom could also be a likely site for its stage two plant, ahead of further funding discussions with possible Saudi joint venture partners.
Hastings says rare earths magnet products produced in Saudi Arabia are well positioned to supply components into original equipment manufacturers and other Tier 1 suppliers in Europe, the United States and Middle East markets.
Under the terms of the MOU and collaboration, Saudi’s Ministry of Investment will support Hastings to refresh its bankable feasibility study subject to the HM plant being located in the kingdom.
The ministry would also help secure joint venture partners to facilitate the development and signing of an agreement to develop the stage two plant in Saudi Arabia.
Additionally, the ministry will assist with access to possible Saudi-based funding and identify suitable local partners for all stages of business establishment.
This could include the Saudi Industrial Development Fund, which has the capacity to lend up to 75 per cent of the project cost and provide further assistance to Hastings as required, including easing its pathway through the various licensing, legal, compliance and regulatory matters in the kingdom.
Hastings executive chairman Charles Lew said:“Hastings is pleased to have signed the MOU with MISA as the company continues to progress its two-stage development strategy at Yangibana as part of our vision to create an integrated mine-to-magnet supply chain. Hastings looks forward to working with the Saudi Government to assess plans for the construction of a hydrometallurgical plant and downstream facilities in the KSA as well as working to secure KSA JV partners and development financing support.”
Hastings says it obtained the required industrial investment licence from the Saudi Ministry of Industry in October, enabling it to kick off its required due diligence work in Saudi Arabia.
The company’s collaboration with the ministry involves four phases to be put in place with its joint venture partners.
The first phase involves construction and management of an HM to produce a mixed rare earth carbonate at an annual production capacity of 15,000 tonnes which would employ Hastings’ HM plant, currently sitting in storage in Perth, in Western Australia.
The second phase includes construction of a solvent extraction plant to produce rare earth oxides, while the third stage would establish a refining and downstream processing facility.
The final phase would involve setting up a rare earths concentrate supply from local Saudi mines.
Inside the structure of the MOU, JL Mag Rare-Earth Company (JL Mag) is the designated off-take entity for downstream products from the third phase.
Notably, JL Mag is the world’s leading producer of rare earths permanent magnets by volume and is acknowledged as the world leader in the application of grain boundary diffusion technology for magnets.
The company is listed on the Hong Kong Stock Exchange and has a market capitalisation of HK$27.8 billion (A$5.5 billion).
JL Mag will become a 9.8 per cent investor in Hastings with the vice president (international) of JL Mag, Han Yu, becoming JL Mag’s nominee on the Hastings board.
JL Mag’s global customer base includes the world’s top 10 new energy vehicle manufacturers, eight of the world’s top 10 variable-frequency air-conditioner compressor manufacturers and five of the world’s top 10 wind turbine generators.
Hastings says it has been approached about opportunities to relocate its stage two plant to Saudi Arabia over the past 12 months. It recently appointed Mohammed Mugaibel as the kingdom’s country representative to accelerate its joint venture company formation in the kingdom and help update the bankable feasibility study and obtain the necessary regulatory approvals.
Mr Mugaibel has more than 20 years’ experience and has worked previously with Saudi groups and government entities such as Saudi Basic Industries Corporation, Ma’aden and Dussur within their business development teams.
Mr Mugaibel holds a Bachelor of Chemical Engineering from Oregon State University, in the US, and a Masters in Business Administration from Kennesaw State University, in the US State of Georgia.
Hastings’ new MOU with Saudi Arabia offers a multitude of advantages – practical, financial, technological and social – that appear to offer myriad avenues of assistance to enable the company to realise its primary objective of getting its Yangibana rare earths-niobium project off the ground and its products into the marketplace.
Combined, the four development phases represent a strategic opportunity for Saudi Arabia to realise its Vision 2030 industrial diversification and to become a major participant in the global rare earths magnets supply chain, which could also fulfill Hastings’ “mine to magnet” objective.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
