Northern Minerals has cancelled its rare earths carbonate offtake agreement with China’s Lianyugang Zeyu New Materials Sales (JFMAG), following a breach of the agreement.
Northern Minerals claimed that JFMAG was in breach of the deal and did not rectify it within the required timeframe.
The two companies signed the agreement in April 2017, with Northern Minerals agreeing to supply rare earths from its Brown Range project in Western Australia.
JFMAG was set to make a prepayment of $10 million to Northern Minerals as part of the deal, with a final value being dependent on the amount of volume delivered.
Northern Minerals stated it is now “working towards securing new arrangements for offtake produced from Browns Range.”
The termination of the agreement follows speculation that China is considering cutting off rare earths supply to use as leverage in the US-China trade war.
Northern Minerals, as of July, received firm commitments from both Australian and international investors for its Browns Range project for $30 million, with payment to be split into three tranches at 6.2 cents per share.
It is the latest in a string of capital raising for the project, building on $15 million that Northern Minerals secured in April and another $22 million in June.
The Brown Range project covers an area of approximately 3595 square kilometres and is focused around the production of dysprosium and terbium. The project is the largest high grade dysprosium resource in the world, according to Northern Minerals.