Victory Metals and Sumitomo Cement Rare Earths Partnership with New LOI

• Non-binding LOI signed with Sumitomo Corporation for rare earth offtake
• Victory to supply up to 30% of annual production, including 50 tonnes of DyTb
• Pilot plant sales expected to start in 2027 ahead of commercial production
• Partnership builds on December 2024 MOU, extending cooperation to 2028
• Strong Japanese interest with other trading houses engaged in discussions

A Strategic Milestone for Victory Metals

Victory Metals Limited (ASX – VTM) has announced a pivotal advancement in its collaboration with Sumitomo Corporation, one of Japan's largest and most influential trading houses. The signing of a non-binding Letter of Intent (LOI) marks a progression from their initial Memorandum of Understanding (MOU) signed in December 2024, signalling a more concrete framework for cooperation centered on Victory's North Stanmore Heavy Rare Earth Project in Western Australia.

This LOI outlines Victory's commitment to supply up to 30% of its annual production, equating to approximately 1,000 tonnes of mixed rare earth concentrate (MREC) annually, including a significant allocation of up to 50 tonnes of dysprosium and terbium (DyTb) products. These heavy rare earth elements are critical components in renewable energy technologies, defence systems, and advanced electronics, underscoring the strategic importance of this partnership.

Pilot Plant and Market Positioning

Sales to Sumitomo are expected to commence from pilot plant operations as early as 2027, well ahead of full commercial production. This early engagement allows both parties to undertake technical evaluations, customer engagement, and pricing negotiations indexed to prevailing market conditions. The LOI extends through to the end of 2028, providing a clear timeline for advancing towards binding offtake agreements.

Victory Metals’ CEO Brendan Clark emphasised the significance of this development, highlighting the shared vision to establish a secure, ethical, and Western-aligned supply chain for heavy rare earths. With Sumitomo’s extensive global marketing reach and Victory’s substantial resource base, the partnership positions Victory as a flagship Australian supplier to Japan, a country at the forefront of rare earth processing and innovation outside China.

The North Stanmore Resource and Broader Implications

Victory’s North Stanmore project boasts a robust Mineral Resource Estimate of over 320 million tonnes, making it Australia’s largest indicated clay heavy rare earth resource. This scale and quality underpin the project's potential to become a critical supplier of rare earth elements essential for the global transition to clean energy and advanced technologies.

Sumitomo Corporation’s involvement, with its 400-year history and diversified global operations, adds significant credibility and strategic weight to Victory’s ambitions. The partnership also reflects broader geopolitical trends as countries seek to diversify supply chains away from China, the dominant player in rare earths, towards more secure and ethically sourced alternatives.

Moreover, Victory’s engagement with other Japanese trading houses suggests a growing interest in Australian rare earths, potentially opening further avenues for collaboration and market expansion.

Bottom Line?

Victory Metals’ evolving partnership with Sumitomo sets the stage for Australia to play a pivotal role in the global rare earths supply chain amid rising geopolitical and technological demand.

Questions in the middle?

• When will binding offtake agreements be finalised following the LOI?
• How will pilot plant performance influence commercial production timelines?
• What role will other Japanese trading houses play in Victory’s future sales?