St George Mining Limited (ASX:SGQ) Signs MoU with Fangda Group
Strategic Partnership with Fangda Group
St George Mining Limited (ASX: SGQ) has entered into a Memorandum of Understanding (MoU) with the Liaoning Fangda Group, a major global steelmaker. This agreement aims to advance the Araxá niobium and rare earth element (REE) Project in Brazil. The collaboration will explore commercial arrangements potentially involving an offtake commitment from Fangda for at least 20% of niobium products generated by the Project.
Key Terms of the MoU
The MoU outlines various possibilities including funding support from Fangda for Project development, which may involve capital investment and prepayment for offtake. A binding partnership agreement is expected to be negotiated within nine months, with the potential of an exclusive five-year offtake term, and market-linked pricing agreements.
Significance of the Araxá Project
The partnership with Fangda indicates the strategic importance of the Araxá Project as a potential global supplier of niobium. St George Mining’s Executive Chairman, John Prineas, noted that securing interests from a global leader like Fangda is a vital step in de-risking the Project. Prineas stated, “The global niobium sector has only three primary producers… St George is continuing to position itself to be the next global player in niobium.”
About Fangda Group
Fangda is ranked as the 16th largest steel producer globally and is expanding its capacity significantly. The Group produces diverse steel products and is a substantial consumer of niobium, which is critical for high-strength steel applications. Additionally, Fangda has interests in mining equipment manufacturing and has been involved in the lithium battery anode material industry.
St George Mining anticipates completing the 100% acquisition of the Araxá Project in the first quarter of 2025, supported by a strong in-country team to further develop the Project.
Motley Fool contributor Kiarra Jackson has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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