Australian Strategic Materials seeking investors for Dubbo rare earths project

Hyundai Engineering & Construction Co

30/11/2022 04:33

SYDNEY, Nov 30 (Reuters) - Rare earths producer
Australian Strategic Materials (ASM)  ASM.AX  is seeking
investors for its Dubbo project in New South Wales state, the
company's chief executive Rowena Smith said on Wednesday. 
    "So we are looking for offtake partners who will then take
an equity portion in the project," Smith told Reuters at the
Australia-Korea Business Council (AKBC) conference in Sydney. 
    "We are in conversation with a number of parties at the
moment about that potential," she said. Investment from South
Korea, where ASM already has some operations would be the "first
and strongest option", she said. 
    Australia is pushing for investment from geopolitical allies
for its critical minerals sector amid a global drive by
automotive, aerospace and other industries to diversify supply
chains. The also push comes as investment from China falls off. 
        ASM says on its website that the Dubbo site contains
light and heavy rare earths, zirconium, niobium and hafnium.
  
    ASM signed a contract with South Korea-based Hyundai
Engineering this year for work on the Dubbo project, 400 km (250
miles) northwest of Sydney. It also has an existing investment
in South Korea with its Korean Metals Plant. 
    "We would be looking for an equity contribution of about
20%-40% of the Dubbo project," she said. 
     The capital forecast for the Dubbo project is about A$1.67
billion ($1.12 billion), and the company is forecasting free
cash flow of over A$400 million a year once it is in production.
    Any investor in Dubbo "may also choose to choose to take an
equity position in the Korean Metals Plant as well," she said. 
    Smith said ASM wants to have a deal in place by mid-2023. 
        The company is also talking to companies in the United
States, Japan and Europe, she said. 
  
    ($1 = 1.4948 Australian dollars)
 (Reporting by Praveen Menon in Sydney; Additional reporting by
Melanie Burton in Melbourne; Editing by Tom Hogue)
 ((praveen.menon@thomsonreuters.com; Reuters Messaging:
praveen.menon.thomsonreuters.com@reuters.net; Twitter:
@Journopraveen))