St George Mining Eyes 40% Offtake Deal for Araxá’s 40.6Mt Rare Earths Resource
St George Mining has formed a strategic alliance with US-based REAlloys Inc to advance the commercialisation of rare earths from the Araxá Project in Brazil, positioning itself within the growing US rare earths supply chain.
- Strategic alliance signed between St George Mining and US rare earths processor REAlloys
- REAlloys to conduct metallurgical test work and technology review on Araxá rare earths
- Potential long-term offtake agreement for up to 40% of Araxá rare earths production
- Araxá Project hosts one of the world’s highest-grade rare earth deposits outside China
- Ongoing drilling program aims to upgrade resource and expand mineralisation footprint
Strategic Alliance with US Rare Earths Processor
St George Mining Limited (ASX:SGQ) has announced a significant step forward in its rare earths ambitions by entering into a strategic alliance with REAlloys Inc, a US-based manufacturer of high-performance magnet materials. This partnership aims to commercialise the high-grade rare earth elements (REE) from St George’s Araxá Project in Minas Gerais, Brazil. REAlloys, known for its contracts with US government agencies including the Defense Logistics Agency and the Department of Energy, brings advanced metallurgical expertise and access to critical US markets.
Unlocking Araxá’s World-Class Rare Earths Resource
The Araxá Project is recognised as one of the world’s largest and highest-grade carbonatite-hosted rare earth deposits, boasting a JORC-compliant resource of 40.6 million tonnes at 4.13% total rare earth oxides (TREO). This places Araxá among the top rare earth projects globally, comparable to the Mt Weld mine in Australia and Mountain Pass in the US. The alliance with REAlloys is designed to leverage this resource through metallurgical test work, processing optimisation, and marketing strategies, with the goal of producing rare earth products tailored for magnet manufacturing.
Pathway to US Market and Offtake Potential
REAlloys will undertake test work on rare earth oxalate samples from Araxá to maximise recovery of high-value magnet rare earths such as neodymium and samarium. The companies are also reviewing innovative processing technologies to enhance product quality. Importantly, the alliance contemplates a long-term offtake agreement for up to 40% of Araxá’s rare earth production, providing St George with a potential anchor customer and a direct route into the US rare earths supply chain, a sector currently undergoing strategic realignment amid geopolitical supply concerns.
Ongoing Resource Expansion and Development Momentum
Alongside this downstream collaboration, St George is actively drilling at Araxá to upgrade and expand its mineral resource. Early results have confirmed high-grade rare earth and niobium mineralisation beyond the current resource boundaries, highlighting the project’s growth potential. The company is also engaged with the Brazilian government’s MagBras Initiative, aimed at developing an integrated rare earth supply chain within Brazil, further supporting Araxá’s development prospects.
Strategic Implications and Market Positioning
John Prineas, Executive Chairman of St George, emphasised the strategic value of the alliance, noting that it positions the company to tap into the lucrative US market for rare earth magnets, a critical component in defence, aerospace, and clean energy technologies. The partnership with REAlloys, which is preparing to list on NASDAQ, also aligns St George with a key player in the US government’s efforts to secure domestic rare earth supply chains. While the offtake agreement remains subject to final negotiation within 120 days, the collaboration marks a pivotal milestone in advancing Araxá towards production.
Bottom Line?
As St George advances metallurgical studies and formalises offtake terms, the Araxá Project is poised to become a cornerstone of Western rare earth supply chains.
Questions in the middle?
- Will REAlloys secure a formal offtake agreement within the 120-day window?
- How will ongoing drilling results impact the scale and grade of the Araxá resource?
- What role will the MagBras Initiative play in accelerating Araxá’s development and processing capabilities?
