May 9 (Reuters) - Australia's FYI Resources Ltd (FYI) said on...

May 9 (Reuters) - Australia's FYI Resources Ltd (FYI) said on Tuesday it had signed a deal for the staged acquisition of Northern Territory-based Minhub Operations rare earths project.

The company would venture into processing mineral sands to produce key rare earths products used in lithium-ion batteries for electric vehicles, and de-risk its core high purity alumina project, it said in a statement.

In a separate deal, Minhub Operations and Arafura Rare Earths Ltd (ARU) have agreed to develop the Minhub project. Arafura would get the first right of offtake for neodymium (Nd) and praseodymium (Pr) and other rare earth concentrate produced from Minhub, according to the statement by FYI.

Australia is building up a critical minerals processing industry, as Western nations look to diversify away from dominant producer China.

Alongside Arafura and feedstock partners, FYI said the acquisition would develop a production strategy for the critical rare earths essential for decarbonisation.

FYI is targeting a feasibility study for the Minhub project in early in 2024, and aims to progress Minhub alongside Arafura's NdPr-focused Nolans Project, it added.