Korean investment in Australian critical minerals is rising. Over the past six weeks, Korean industrials and investors have signed MOUs with two Australian project proponents. The offtake arrangements will secure their supply chains for batteries and magnets.
ASM signs framework agreement with Korean investors
In August 2021, Australian Strategic Materials (ASM) signed a framework agreement with a consortium of Korean investors. These include Cerritos Holdings Co., Ltd, Kamur Partners LLC and ACE Equity Partners LLC.
The entities will invest US$250 million for a 20% equity interest in ASM, subject to due diligence. The investment is a sign of support for ASM's 'mine to metal' strategy for its Dubbo Project. ASM has also received a conditional letter of support from Export Finance Australia for A$200 million in debt finance.
ASM plans to develop the Dubbo Project to become a global supplier of processed critical minerals. These include zirconium, niobium, tantalum and yttrium. Minerals sourced at the Dubbo Project will feed into the metals plant ASM is building in Ochang, Korea. The plant will produce neodymium-iron-boron alloy.
The investors will also form a separate fund to set up MagnetCo Fund, a magnet manufacturing business. MagnetCo will buy up to 2,800 tpa of the alloy under a 10-year offtake agreement.
'We are very proud to be associated with this strategically important project that will give rise to significant upstream and downstream benefits for both Korea and Australia,' says Jerry Kwak, CEO, Kamur Partners LLC.
'It will usher in new opportunities for downstream permanent magnet product manufacturing.'
POSCO and Renascor Resources enter into a MOU
Korea's POSCO has signed a strategic investment and offtake MOU with Renascor Resources. The MoU covers the purchase of 20,000 to 30,000 tpa of purified spherical graphite. The graphite will be sourced from Renascor's Siviour graphite mine and planned Battery Anode Material business in South Australia. The MoU also provides for POSCO to make a potential equity investment in Renascor.
'We are delighted to be working with POSCO, a world leader in the supply of lithium-ion battery materials,' says David Christensen, Renascor's Managing Director.
'[POSCO has] an established track-record of working with Australian companies, including, most recently, Australian suppliers of battery minerals.'
Renascor's South Australian graphite project has the second largest reserves of graphite outside Africa. The MOU will help POSCO de-risk its supply chain and create a new graphite industry in Australia.
POSCO is the world's leading steel-making company. It is one of the world's largest suppliers of lithium-ion battery material. POSCO has been pursuing transactions with Pilbara Minerals (lithium) and First Quantum (nickel).
An Austrade helping hand
Austrade was an early mover in its support for both battery and critical minerals opportunities. This includes the first bilateral cooperation agreement signed by former Prime Minister Malcolm Turnbull and President Donald Trump in February 2018.
Austrade supports commercial investment in Australian critical minerals through several activities. These include leading CEO delegations to target markets and developing bespoke investment-focused value proposition publications.
Austrade and Geoscience also promoted the Lithium-ion Battery Chain report in Japan and Korea in 2019. This enabled more targeted commercial support for Austrade's critical minerals clients in these markets.
Austrade worked with ASM and Renascor over the past 18 months to raise their profiles in Korea. Austrade introduced ASM to potential investors, offtakers and technology companies. At the same time, Austrade also built Korean awareness of the need to diversify supply chains.
Critical minerals in Australia
Australia is a reliable source of critical minerals. There are greenfield investments and offtake opportunities available.
