St George Mining has forged a strategic alliance with United States-based magnet materials group REAlloys to commercialise the company’s high-grade Araxá rare earths project in Brazil.
The memorandum of understanding with REAlloys opens the door to collaboration on metallurgical test work, technology reviews and processing optimisation with the industry specialist.
REAlloys, which supplies the US Defence Logistics Agency, the Department of Energy laboratory and industrial giants in defence and aerospace, will test St George’s rare earths oxalate samples from Araxá to maximise recoveries of high-value magnet rare earth elements such as neodymium-praseodymium.
The partnership importantly affords REAlloys an option to secure a long-term offtake agreement for the project’s high-grade resources, covering up to 40 per cent of its future production.
The alliance comes on the back of recent major US market shifts, such as the Department of Defence's multi-billion-dollar partnership with California-based MP Materials and MP Materials' $500 million deal with Apple for recycled rare earth magnets.
REAlloys says it can bring its advanced metallisation and alloy capabilities to the table, as it works to carve off a substantial slice of the US market’s national defence stockpiles and critical minerals infrastructure.
St George says that in addition to providing a potential long-term supply option, the alliance will help commercialise Araxá’s large, high-grade rare earths inventory by leveraging REAlloys’ innovative technologies.
The recent rare earths supply chain intervention by the US defence department through its multi-billion-dollar deal with NYSE-listed MP Materials illustrates the re-alignment of the global rare earths market status quo that is now underway – led by key players in the US.
St George Mining executive chairman John Prineas said: “REAlloys is one of the leading suppliers of high-performance rare earth magnet materials to the US defence and industrial sectors, which means this strategic alliance creates an attractive pathway for St George to access the fast-growing and lucrative downstream sector of the US rare earths industry.”
Araxá is a carbonatite-hosted niobium and rare earths monster within the Brazilian mining jurisdiction of Minas Gerais.
The company is rapidly expanding its fully owned existing resource of 40.6 million tonnes at 4.13 per cent total rare earth oxides (TREO), with 0.78 per cent magnet rare earth oxides and 41.2Mt at 0.68 per cent niobium oxide.
The mineralisation starts at surface within a resource area defined by more than 500 high-grade intercepts, including hits up to a staggering 8 per cent niobium oxide and 33 per cent TREO.
Araxá features a world-class, hard-rock resource that is now growing well outside the resource envelope. The same style of deposit is crucial to western supply chains. The two major rare earths mines outside of China and Brazil are the Mt Weld mine of Lynas Corp in Australia and MP Materials’ Mountain Pass mine in California.
Unsurprisingly, St George is now attracting strong interest from downstream industry players and the eyes of a red-hot rare earths market, with the company’s share price moving up about 75 per cent in the past two weeks.
St George says it is still flat strapped in an extensive drilling program at Araxá to upgrade the resource and explore undrilled areas.
Recent assays from a zone more than 1 kilometre east of the main resource have confirmed high-grade mineralisation intercepts, including a 14-metre hit running 2.63 per cent TREO from 1m.
The MoU is currently non-binding, with each party covering its own costs. It is not exclusive, which would allow St George to pursue additional partnerships.
As ex-China supply chains take shape amid rising demand for electric vehicles, renewables and defence technologies, the alliance with REAlloys could propel Araxá toward production, delivering substantial value in a market ripe for non-Chinese rare earth sources.
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By Andrew Todd
