St George Mining (ASX: SGQ) has signed a Memorandum of Understanding with the Liaoning Fangda Group that provides a framework for ongoing collaboration between the two groups in relation to development of the advanced, high-grade Araxá niobium-REE project in Minas Gerais, Brazil.
St George and Fangda will consider commercial arrangements that may include:
- an offtake commitment whereby Fangda may secure a minimum 20% of potential niobium products from Araxá
- the provision by Fangda of funding support for the development of Araxá including through an investment in St George and/or pre-payment for offtake
- technical advice and support for mine development and construction
Fangda produces approximately 20 million tonnes of steel products per year, ranking 16th among the world’s top steel producers, and is expanding capacity to 50mtpa to potentially become a global Top 5 producer. Fangda is a large consumer of niobium products, essential for its high-strength steel products used in construction, bridges, ships, autos and heavy mining equipment.
The MoU with Fangda recognises the long-term strategic importance of the Araxá project as a potential global supplier of niobium products.
“The relationship with Fangda – through potential financial and technical support as well as mine development – is another key milestone in de-risking the project,” St George executive chairman John Prineas said.
“The global niobium sector has only three primary producers – the global leader being CBMM, with its flagship project located immediately adjacent to Araxá. With extensive near-surface niobium mineralisation already confirmed by historical drilling at Araxá – including more than 500 intercepts of +1% Nb2O5 – as well as access to existing regional infrastructure, St George is continuing to position itself to be the next global player in niobium.
“St George’s ability to attract global giants like Fangda speaks volumes to the potential of Araxá and also recognises the high-performance in-country management established by St George to drive project development.”
St George has entered into a conditional binding agreement for the 100% acquisition of the Araxá project and expects to complete the acquisition in Q1 2025. In anticipation, St George has assembled a highly experienced team in Brazil to oversee the first stage of on-the-ground exploration work and development studies.
