Hastings eyes US$53M first-year revenue from Thai rare earths plant

The countdown to Hastings Tecnology Metals’ maiden revenue stream is officially on after the company pulled the curtain back on a proprietary flowsheet for its Kabin Buri Hydromet Plant in Thailand.

The company says that the facility remains on track for first production of mixed rare earth chloride flake in the final quarter of this year, with unaudited estimates projecting a massive $US53.4 million (A$74.68M) in year-one revenue.

Hastings’ push into Thailand’s Eastern Economic Corridor via the Kabin Buri hydromet plant appears a savvy strategic play, potentially delivering near-term cash flow from a globally connected industrial hub.

Better still, the timing looks spot on, with that revenue stream likely to underpin the development costs of its flagship Yangibana rare earths and niobium joint venture in Western Australia. By moving downstream now, Hastings is effectively accelerating its transition from a pure-play miner to a vertically integrated producer far earlier than previously envisaged.

‘Hastings is on a clear, near-term path to first MREC production.’

Hastings Technology Metals chief executive officer Vince Catania

The numbers attached to the Thai play are eye-catching. In the first year, the plant is expected to pump out 6000 tonnes of mixed rare earth chloride (MREC) for a solid estimated pretax profit of $US21.6 million (A$30M). Under the current structure, Hastings’ 49 per cent interest would net the company $US10.6 million (A$15M) in its first year alone.

However, the real growth story lands during the plant’s second year of operations. Following a planned $US3 million expansion, production is expected to double to 12,000 tonnes per annum of MREC.

At the boosted rate, the plant’s annual revenue is projected to double to an eye-watering $US106.8 million (A$149M), with pretax profits climbing to a hefty $US43.8 million (A$61.25). Looking further ahead, the company is already eyeing a massive fivefold scale-up to 30,000 tonnes annually,

Hastings Technology Metals chief executive officer Vince Catania said: “With feed stock secured and a proven seven-stage process ready for commissioning, Hastings is on a clear, near-term path to first MREC production.”

The company has recently cleared the pathway to revenue generation by nailing a cornerstone two-year offtake agreement with Enuo Holdings for 5000 tonnes of African monazite concentrate annually.

The high-grade African feedstock packs a punch, delivering a 54 per cent total rare earth oxide grade. The concentrate is also loaded with 20 per cent of the lucrative magnet metals powering the world, neodymium and praseodymium, rounded out by significant volumes of dysprosium and terbium.

Technically, the plant uses a proven seven-stage process, involving caustic cracking and hydrochloric acid leaching to convert the monazite concentrate into premium-grade MREC. The refined product is highly sought after by global oxide separation facilities as it can be used immediately, avoiding the extra cost and time needed to dissolve it again.

Operating in Thailand also provides a structural cost advantage. Hastings expects materially lower unit costs than in Western jurisdictions, thanks to cheaper electricity and reagents, as well as a deep pool of local engineering talent.

For Hastings, the Kabin Buri plant appears to offer a slicker, capital-light downstream pathway for early cash flow. Kabin Buri bridges the gap, allowing the company to bypass its immediate need for a yet-to-be-built local hydromet plant in Australia to process its expected rare earth concentrate.

Once the plant is ramped up to full capacity, the company expects to have the flexibility to treat multiple third-party suppliers. This could also include concentrate from its own impressive Yangibana rare earths project in WA, if Hastings and its JV partner assess it as the preferred route for Yangibana ore.

Hastings and Wyloo, its 40 per cent joint venture partner at Yangibana, sit on a 21m-tonne ore reserve grading 0.9 per cent total rare earth oxides. However, what sets it apart from its peers is a 37 per cent ratio of EV magnet rare earths of neodymium and praseodymium.

The current Yangibana plan is to upgrade the ore in WA through a proposed local hydromet plant still to be built. But Wyloo chief executive Luca Giocovazzi says the new Thailand facility could emerge as a valuable strategic alternative for the joint venture.

Giocovazzi said: “It represents a capital-efficient downstream pathway and a fast route to market for one of the world’s highest-grade NdPr deposits. Wyloo is working closely with Hastings and we look forward to jointly exploring the economic benefits of this processing option.”

The countdown to cash flow is well and truly on for Hastings. With a savvy pivot to a capital-light model in Thailand, they appear to have turned a long-term development story into a potential near-term revenue generator.

Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au