VHM finds a potential Mitsui cornerstone buyer for Goschen mineral sands

• Non-binding term sheet covers 50% of Goschen HMC production, capped at 65,000 tonnes per annum
• Proposed three-year offtake with a possible three-year extension
• Pricing linked to zircon and titanium dioxide markets on an FOB Australian port basis
• Mitsui may consider trade finance, subject to due diligence
• Discussions continue over offtake covering up to 100% of HMC production

Mitsui term sheet covers half of Goschen HMC

VHM Limited (ASX:VHM) has secured a proposed buyer for up to 65,000 tonnes a year of heavy mineral concentrate from its Goschen Rare Earths and Mineral Sands Project, adding a second major commercial thread to the Victorian development. The non-binding term sheet with Mitsui & Co. covers 50% of Goschen’s HMC production for an initial three-year period from first production, with a possible further three-year extension by mutual agreement.

The agreement sets out more defined commercial terms than the letter of interest announced in July 2025, but it is not yet a binding offtake contract. VHM said the parties are well advanced in negotiating that definitive agreement, while also discussing increased volumes that could eventually cover up to 100% of Goschen HMC production.

The proposed pricing formula will be linked to prevailing zircon and titanium dioxide prices, with sales made on a free-on-board Australian port basis. That structure gives the arrangement exposure to market prices rather than locking in a fixed price, so the eventual revenue contribution will depend on both the final formula and commodity conditions at the time of shipment.

Potential trade finance adds a funding angle

Mitsui may also, at its discretion and subject to due diligence, consider providing VHM with a trade-finance facility connected to the offtake. The possibility extends the relationship beyond product sales and could support working-capital management, although neither the facility nor its terms have been committed.

The announcement arrives as Goschen moves through the financing phase described in VHM’s refreshed feasibility study. That study projected a pre-tax NPV of A$807 million but left financing, lender due diligence and a Final Investment Decision as key steps before construction. The proposed Mitsui arrangement therefore addresses part of the commercial case, while leaving the larger project-funding question unresolved. VHM has also previously secured a binding agreement with Iluka Resources for 100% of Goschen’s rare earth concentrate and a A$40 million funding package, captured in the Iluka offtake and funding deal.

Chief executive Andrew King said the term sheet provided a pathway towards a “cornerstone HMC customer” and potential working-capital and trade-finance support. He also described Mitsui as an experienced international commodity-market partner. The company’s broader commercial progress can be set against the refreshed Goschen feasibility study, which put the project’s funding requirement under renewed focus.

Binding contract remains the next test

For VHM, the immediate milestones are specific: convert the non-binding term sheet into a binding offtake agreement, settle the final pricing mechanics and determine whether Mitsui proceeds with trade finance. The company is also seeking additional HMC commitments, potentially covering the remainder of Goschen’s production, but those discussions remain incomplete.

Bottom Line?

The Mitsui term sheet improves Goschen’s commercial profile, but its investment significance will depend on a binding contract, committed finance and the final funding package needed for construction.

Questions in the middle?

• When will VHM and Mitsui execute a binding offtake agreement, and what final volumes will it commit?
• Will Mitsui’s proposed trade-finance facility proceed after due diligence, and on what terms?
• Can the additional HMC discussions and other funding sources close the gap to Goschen’s Final Investment Decision?