St George Mining Limited announced on January 15, 2025, that it has signed a Memorandum of Understanding with the Liaoning Fangda Group, one of the world’s largest steelmakers, to explore collaboration opportunities for the development of the Araxá niobium-rare earth elements Project located in Minas Gerais, Brazil. This agreement sets the stage for potentially significant support in terms of offtake agreements, project financing, and technical expertise.
Key Terms of the MoU:
• Fangda could acquire at least 20% of the niobium products from the Araxá Project.
• The MoU may lead to an exclusive five-year offtake agreement with an option to extend.
• Fangda may provide funding for the project’s development through equity investments or prepayment arrangements.
• St George and Fangda will jointly assess financing options for advancing the project.
The MoU serves as an important strategic step in de-risking the Araxá Project by securing a potential commercial relationship with one of the world’s foremost steelmaking companies. Fangda’s vast steel production capacity, currently at 20 million metric tons annually and set to grow to 50mtpa, highlights the increasing global demand for niobium, a critical element for producing high-strength steel used in various industries such as construction, mining, and transportation.
Fangda’s Steelmaking Dominance:
Fangda, ranked 16th among the top steel producers globally, is a key consumer of niobium. The metal is essential for manufacturing high-strength steel, which is widely used in construction, automotive, and heavy machinery industries. This strategic alliance not only secures a market for Araxá’s niobium products but also provides Fangda with a critical resource to support its growth in the steelmaking sector.
Fangda’s investment and technical support will be crucial in advancing the project through feasibility studies and towards a final investment decision. The MoU also provides a framework for St George to pursue other strategic partnerships with potential investors to ensure the project’s success.
The Araxá Niobium Project’s Global Importance:
The Araxá Project is strategically positioned next to the CBMM’s world-renowned niobium operation. St George is focusing on unlocking the value of its large niobium mineralisation, evidenced by over 500 intercepts of +1% Nb2O5 from historical drilling. With access to regional infrastructure, the project is poised to become a significant global player in the niobium supply chain.
In addition to steel production, Fangda’s interest in niobium also extends to emerging applications, including its use in lithium-ion batteries. This partnership presents an exciting opportunity to expand the market for niobium across multiple industries.
Araxá Project Development:
St George has made significant progress in acquiring the Araxá Project, with completion expected in Q1 2025. The company has assembled a strong team in Brazil to oversee exploration and development work, ensuring the project’s timely progression.
About Fangda:
Liaoning Fangda Group is a global leader in steel production, operating multiple steel plants and a large-scale mining equipment manufacturing business. Fangda’s expansion plans aim to increase annual steel production to 50 million metric tons, which would propel it into the top five global steelmakers. The company is also involved in diverse industries, including mining, aviation, and lithium battery technology, positioning Fangda as a key player in both the steel and energy sectors.
