India approves $1.88bn to develop critical minerals sector
The funding illustrates India's efforts to reduce its reliance on imports of minerals such as lithium.
Almonty Industries (TSX, ASX: AII), a global producer of tungsten concentrates, has entered an exclusive offtake agreement with SeAH M&S, the largest processor of molybdenum products in South Korea.
Under the agreement, SeAH will purchase all material produced at Almonty’s Sangdong molybdenum project in Korea, which is targeting production by the end of 2026 with an anticipated mine life of 60 years. At full capacity, it is expected to produce approximately 5,600 tonnes of molybdenum annually.
The project is in close proximity to the tungsten project (also named Sangdong) being developed by Almonty. The tungsten project is said to host one of the largest resources in the world, and the site of what was once the leading global tungsten producer for 40 years, accounting for over half of the world’s supply.
The location of the two projects, according to Almonty, will allow for significant synergies that enhance logistical efficiency, reduce costs, and leverage shared infrastructure and expertise.
SeAH, owner of the second-largest molybdenum oxide smelter in the world, is currently building a $110 million facility in Temple, Texas, that is slated to provide fabricated metal products to Elon Musks’ Space Exploration Technologies, as well as to the US defense and civilian aerospace sectors.
SeAH — owner of the second-largest molybdenum oxide smelter in the world — is currently building a $110 million metals and fabrication facility in Temple, Texas
The offtake includes a hard floor price of $19.00/lb. (prior to the deduction of treatment charges), which Almonty believes would ensure financial stability and a predictable revenue base as it advances the Sangdong project. The current price of molybdenum is approximately $22.00/lb.
Almonty also notes that South Korea has large metals and shipbuilding industries that are currently almost entirely dependent on imported molybdenum, with China being the largest single source of the metal.
By supplying material from the Sangdong mine to SeAH, South Korea’s domestic supply chain will be strengthened with reduced dependence on foreign imports and local manufacturers should greatly benefit, the Toronto-based miner said.
“We are thrilled to partner with SeAH M&S, a highly respected leader in the Korean market,” Almonty CEO Lewis Black said in a press release on Wednesday, adding that the agreement “reflects strong confidence in Almonty’s ability to deliver high-quality resources.”
“The floor price provides a stable foundation and access to low-rate domestic construction lending as we advance our moly project, while keeping the material in South Korea strengthens local supply chains and supports domestic industry,” Black said.
Almonty Industries shot up to a new 52-week high of C$1.29 on the offtake agreement announcement. By 1:45 p.m. ET, it traded at C$1.25 for a 13.6% intraday gain and a C$331.8 million ($230m) market capitalization.
Comments