SASKATOON - Great Western Minerals Group Ltd. (TSXV:GWG), a Saskatchewan-based miner, said in a Wednesday press release it has struck a deal to supply rare earth metals to Aichi Steel Corp., a part of the Toyota group of Japanese companies.
The agreement involves Great Western's wholly owned subsidiary Less Common Metals Ltd., or LCM, the Canadian company said Wednesday.
The deal will secure a long-term supply of rare earth metals for Aichi, a specialty steel producer that has plans to expand its so-called MagFine business, the production of magnet powder used to build powerful bonded magnets.
Last fall, China suspended exports of rare earth metals to Japan over a diplomatic dispute, raising concerns in Japan about the country's dependence on Chinese supply.
LCM produces rare earth metals and alloys to the worldwide magnet industry and has been supplying Aichi with neodymium iron boron alloys for more than 10 years.
“Given our ambitious plans for the expansion of our MagFine product, it will be critical, for us and our customers, to secure a reliable, non-Chinese source of rare earths and alloys on whom we can rely to supply the majority of our alloy requirements long into the future,” said Y. Honkura, senior managing director at Aichi.
Great Western “will be a key factor in providing this security via its mine at Steenkampskraal in South Africa and its LCM facility in the United Kingdom. The signing of this Co-operation Agreement ensures ASC will benefit from a long term supply commitment securing alloy of the very highest quality for years to come.”
Jim Engdahl, CEO of Great Western, said the long-term deal “will provide the cornerstone of demand for our rare earth products over the coming years.”
“This co-operation agreement ensures a guaranteed market for an important segment of the rare earth alloys we produce. It also provides a level of stability to our Company that enables us to evaluate the expansion of our planned operations at Steenkampskraal in expectation of increasing demand.”
Great Western is an integrated rare earths processor. producing alloys used in the battery, magnet and aerospace industries.
The company's wholly owned subsidiaries are LCM in Birkenhead, U.K. and Great Western Technologies Inc. in Troy, Mich. Great Western also holds interests in six rare earth exploration and development properties in North America.
In Wednesday trading on the TSX, Great Western shares rose seven cents to 84 cents, a gain of more than nine per cent.