PERTH (miningweekly.com) – Rare earths developer Arafura Resources has signed a memorandum of understanding (MoU) with South Korean chemical manufacturer OCI Company to establish a joint venture (JV) separation plant in South Korea.

The MoU follows a letter of intent signed in June last year. In the subsequent months, the two companies had collaborated to examine the strategic benefits for the establishment of a JV separation plant.

Arafura said on Thursday that the purpose of the MoU was to examine and negotiate proposals for OCI to supply reagents for the Nolans project, in the Northern Territory, and in particular to the rare earths separation plant.

OCI would provide assistance to Arafura to access infrastructure and critical services for the operation of the separation plant, while the two parties would also collaborate on research and development.

Further, the JV would investigate the possibility of establishing a business model under which the parties would jointly fund the establishment of the separation plant and toll process Nolans mixed rare earth intermediate or carbonate product.

In addition, OCI was also pondering an equity investment in Arafura.

“We are extremely pleased to have OCI as a potential JV partner in the Nolans rare earths separation plant. OCI’s expertise in chemical manufacturing coupled with the location of an existing plant in a chemical precinct, plus its inclusion in the Seamegneum Free Economic Zone, de-risks a key aspect of the Nolans development,” said Arafura MD Gavin Lockyer.

Arafura is hoping to start production at the planned A$244-million Nolans project in 2019, with production targeted at 20 000 t/y of rare-earth-oxide equivalent.

The company has previously stated its intention to establish a rare earths separation plant within an established offshore chemical precinct, and said on Thursday that it had identified and shortlisted a number of sites with suitable road, rail, port and related infrastructure.