Area around Ampasindava project
Australian natural resources company Harena Resources has signed a nonbinding indicative offtake term sheet with US-based United Rare Earths for the sale and purchase of mixed rare earth carbonate product.
Harena is advancing its 75%-owned Ampasindava rare earths ionic clay project in Madagascar, which is considered one of the most significant ionic clay rare earth sites in the world outside of China.
It aims to supply critical rare earth magnet metals, including neodymium, praseodymium, dysprosium and terbium into Western supply chains for the production of permanent magnets.
United is developing a rare earths hub in Tennessee, including a magnet recycling centre, a refinery and a technology centre of excellence.
The term sheet provides the key terms the parties will use in executing a binding offtake agreement, which will be valid for an initial five years with the option of extending.
The offtake will involve 50% of the product produced from Ampasindava.
The term sheet includes the concepts of take-or-pay provisions and pricing mechanisms linked to market observable indices for commodity prices where they are available.
Shipping, weighing, assay and commercial provisions are expected to be negotiated in good faith based on market standard and customary terms and conditions to be agreed prior to any binding offtake agreement being executed.
Harena MD Joe Belladonna says the term sheet with United provides a pathway for the company towards having an offtake customer in place, well in advance of the expected production of mixed rare earth carbonate from the project.
“It is a major step forward for Harena to have engaged with a company that is currently developing a rare earth downstream industry in the US, which will include rare earth separation and refining infrastructure, and magnet recycling,” Belladonna explains.
He adds that the agreement validates the quality of the Ampasindava resource and its potential to be a near-term producer of rare earth products.
In turn, United chairperson Jeff Willis comments that the term sheet gives the company confidence that it will be able to access a ready supply of rare earth oxides that are essential to United’s long-term downstream strategy in the US.
Both companies look forward to mutually beneficial collaboration going forward.