Ann: Bell Potter Unearthed Conference 2024, page-22

Some notes

KMP

• Feedstock sources in short term to come from Vietnam, Australia, Europe and USA
• Initially as stop gap awaiting Dubbo but then to continue as supplementary
• Not a lot of non-China oxide supply in 2024 which is a constraint to KMP ramp-up – better in 2025
• KMP 600T/a at present – ramping to 3600T/a as customers come on board
• NS World a Korean customer since 2022
• Two US ‘start-up’ customers for NdFeB since then
• Noveon for 100T initially but then a long term partnership
• USA Rare earths for 60% of their needs over 5 years
• Over ‘half a dozen’ other potential customers in advanced stages of product validation – in Korea,US and Europe

Dubbo

• Trying to secure offtakes in parallel to the engineering studies being completed – Hyundai and Bechtel
• Capex of $1.67B in2021 but now anticipating ~$2B even with optimisation
• Seems like most of over-run in the NPI (Non Production Infrastructure) aspects?
• Broadened funding search beyond Korea last year to Japan, Europe and US
• Now have strong momentum with bankable offtakes and strategic investment parties
• Credit agencies in US, Canada and Germany have much simplified process/access to ECA funds and discussion are well advanced there
• Seems like US money is likely the easiest to access for Dubbo and Rowena flying back to US ‘next week’ to continue discussions

Q&A

KMP Progress

• Quality/production rate good but difficult at low scale
• Scaling slower thananticipated
• As new ‘start-up’ customers (US based) experiencing commissioning delays and established players (Europe based) having long/complex validation processes
• One of the validation process for an established player has been underway for 18 months already – but now at last stage of large commercial samples before offtake signed
• Established players will only use KMP output as a supplementary supply to their existing supply chain – initially at least
• Looking to supply directly to the Tier 1 component producers, who have multiple car manufacturer customers, rather than to the car manufacturers direct

Metal PricingPremium

• China pricing is not a true market price and not really relevant to contracts being negotiated – but is the only current reference point - lacks transparency, heavily subsidised and potentially manipulated
• Pricing mechanism being discussed is what is sustainable with a floor for ASM and a cap for the customer
• There is no ESG premium per se as the entry point for any discussions with buyers is having strong ESG credentials
• Customers want security of supply and volume first and then pricing is a factor

Dubbo

• Next 6 months will see;
• ASM securing new feedstock for KMP
• Securing funding (CR?) to complete the Dubbo engineering design
• ECA and customer offtake progress
• No customers want Dubbo oxides direct but rather the metal products
• Many are asking for a metals plants on their own jurisdiction that will use Dubbo oxide and potentially third party oxide as well
• The KMP can relatively simply be replicated to other locations