Strategic Partnership with SeAH M&S
Almonty Industries Inc. has successfully secured an exclusive offtake agreement with SeAH M&S, a major player in the global molybdenum processing industry. SeAH, the largest molybdenum processor in South Korea and the second-largest molybdenum oxide smelter in the world, will purchase 100% of the molybdenum produced at Almonty's Sangdong Molybdenum Project for the life of the mine. This strategic collaboration ensures a reliable and stable supply of molybdenum, which is essential for various high-tech industries such as defense and green energy.
Sangdong Molybdenum Project Overview
The Sangdong Molybdenum Project, located in Gangwon Province, South Korea, is a pivotal asset for Almonty. Fully permitted for both mining and environmental standards, the project is expected to commence production by 2026. The mine's projected lifespan spans 60 years, with an annual production capacity of 5,600 metric tons of molybdenum at full capacity. This will position Almonty as a significant supplier in the molybdenum market, especially given the increasing global demand for the material.
Ensuring Financial Stability with a Floor Price
To ensure the financial security of the project, the offtake agreement includes a hard floor price of US$19.00 per pound of molybdenum (prior to treatment charges). This price point guarantees a predictable revenue base for Almonty as it advances the Sangdong Molybdenum Project. With the current price of molybdenum around US$22 per pound, the deal offers stability and aligns with the projected growth of molybdenum demand.
Synergies with the Sangdong Tungsten Project
A unique advantage of the Sangdong Molybdenum Project is its proximity to Almonty’s Sangdong Tungsten Project, just 150 meters away. This proximity allows Almonty to leverage shared infrastructure, optimize logistical efficiency, and reduce costs. The synergy between these two projects enhances their combined economic value and positions Almonty for further success in the critical materials sector.
Strengthening South Korea’s Domestic Supply Chain
One of the key benefits of this offtake agreement is the positive impact on South Korea's domestic supply chain. Currently reliant on imported molybdenum, primarily from China, South Korea’s metals and shipbuilding industries will be able to access a stable, locally sourced supply of molybdenum. This reduces the nation’s dependence on foreign imports, strengthens its industrial base, and boosts local manufacturers who depend on molybdenum for production.
Supporting the Aerospace and Defense Sectors
SeAH M&S is also investing in a US$110 million fabrication facility in Temple, Texas, aimed at supplying fabricated metal products to SpaceX and the U.S. aerospace and defense industries. This facility will further deepen the collaboration between Almonty and SeAH, providing critical materials for high-tech industries. As these sectors grow, the demand for molybdenum is expected to rise, making the partnership even more valuable.
CEO’s Remarks on Strategic Collaboration
Lewis Black, CEO of Almonty, expressed his excitement about the partnership with SeAH M&S: “We are thrilled to partner with SeAH M&S, a highly respected leader in the Korean market. This agreement underscores the strategic importance of our Sangdong Molybdenum Project and strengthens local supply chains, supporting South Korea’s industrial growth and energy sovereignty.” Black emphasized that the collaboration not only benefits both companies but also contributes to addressing the rising demand for molybdenum in critical industries worldwide.
