3 Korean PEFs Acquire 20% Shares in Australia’s Rare Earth Mining Project

3 Korean PEFs Acquire 20% Shares in Australia’s Rare Earth Mining Project

South Korean PEF invests in Australia‘s Mining and Metals Corporation to help the country’s industry diversify the supply of key metals. A consortium of three Korean private equity companies (PEFs) signed a framework agreement with Australian Strategic Materials Ltd. (ASM) to hold the latter’s rare earth and key metals in Dubbo 20% stake in the project, New South Wales.

This investment represents the next stage of financing support for ASM’s “mine-to-metal” production operations in Australia and South Korea, and provides South Korea with a way to ensure the development of metals that are critical to its permanent magnet and advanced material manufacturing needs.

The three PEFs are ACE Equity Partners LLC, Kamur Partners LLC and Cerritos Holdings Co., Ltd. They will set up a fund to acquire a 20% stake in the ASM Dubbo project at a price of $250 million.

The three companies also plan to start a fund to invest in downstream activities, including permanent magnet manufacturing.

This investment is an important step for South Korea to diversify the supply of key metals for its key industries. The market for rare earth and other key metals is dominated by China. Given the rapid development of the renewable energy and electric vehicle industries, China itself has huge local demand. The successful implementation of ASM's "mine-to-metal" strategy will provide Korea with another key source of metal.

David Woodall, Managing Director of ASM, said: "We are very proud to participate in this strategically important project, which will bring significant upstream and downstream benefits to South Korea and Australia, and new opportunities for South Korean manufacturing."

Rare earths are used in the manufacture of permanent magnets (neodymium iron boron magnets), which are used in electric vehicle transmission systems and components, wind turbines, defense equipment, mobile phones and electronic products.

The agreement includes a 10-year NdFeB (neodymium iron boron) alloy offtake agreement for ASM Korea Metals Plant, which is currently under construction in Ochang.

Woodall said: "In opening up financing for the Dubbo project, this agreement heralds an exciting new phase of ASM's growth and brings us one step closer to implementing our 'mine-to-metal' strategy."

"We are pleased that our new Korean partner recognizes the shared value of a strategic investment opportunity that provides a new, cleaner source of key metals and alloys for the rapidly expanding market. Consolidating our ties with South Korea’s advanced manufacturing industry represents an excellent opportunity to create value for the two countries. "

The Dubbo project is a long-term polymetallic resource that includes rare earths, zirconium, niobium, and hafnium, these elements are essential for advanced and clean technology.

The relationship between ASM and South Korea to ensure the rare earth supply chain can be traced back to 2019, when it first invested in the clean metal processing technology of Australia‘s local company Ziron Tech Corp.

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