Australia-based mineral sands and rare earth company VHM has signed a binding offtake agreement with Shenghe Resources (Singapore) for its flagship Goschen Project.
The agreement was signed following the completion of negotiations for Goschen Project’s Phase I products- a rare earth mineral concentrate (REMC) and a zircon-titania heavy mineral concentrate (HMC).
It will entail the supply of 6,400 tonnes per annum of REMC and 100,000 tonnes of zircon titania HMC products for three-year initial term. The figures represent approximately 60% of forecast production per annum.
This agreement may also include the Goschen MREC product (Phase IA).
VHM CEO Ron Douglas said: “Shenghe is a globally recognised rare earths and mineral sands processor. This agreement between VHM and Shenghe is a strong endorsement of the world-class rare earths and mineral sands resource, and the strategic value of the Goschen Project.
“A binding offtake arrangement for first production provides a favourable influence on the bankability for the Project, and further distinguishes the staged development approach of the Goschen Project as a viable, de-risked, low capital intensity project.”
The company will seek spot sales and other commercial arrangements for the remaining 40% production.
The Goschen Project is located in the Loddon-Mallee Region of north-west Victoria, around 275 km north of Melbourne. The asset has a rare earth deposit of 413,107 tonnes of total rare earth oxide (TREO).
First production from the project is expected next year. It will produce rare earth, zircon and titanium minerals which will support green energy transition and have applications in defence.
In August 2023, Shenghe Resources Singapore signed similar offtake agreement with Australia-based Peak Rare Earths for the Ngualla rare earth project in southern Tanzania.
