Critical minerals company Almonty Industries (TSX:AII,ASX:AII,OTCQX:ALMTF) said on January 29 that it has entered into an exclusive offtake deal with South Korean molybdenum processor SeAH M&S.
Under the deal, SeAH will purchase 100 percent of the material produced from Almonty’s Sangdong molybdenum project for the asset’s entire life. Located in Korea, Sangdong is expected to start producing in 2026.
SeAH is South Korea’s largest processor of molybdenum products, as well as the second largest molybdenum oxide smelter in the world. The company is building a US$110 million metals and fabrication facility in Temple, Texas, that will provide fabricated metal products to SpaceX, the Elon Musk-led rocket and spacecraft company.
Sangdong is being developed by Almonty’s subsidiary, Almonty Korea Moly, with mining and environmental permits already in place. It is expected to produce about 5,600 metric tons of molybdenum annually over a 60 year life.
“This agreement underscores the strategic importance of (Almonty Korea Moly) and reflects strong confidence in Almonty’s ability to deliver high-quality resources,” said Almonty CEO Lewis Black in a press release.
Pricing is set at a minimum of US$19 per pound, based on the current molybdenum price of approximately US$22. Almonty said this level will ensure financial stability and a predictable revenue base as it advances Sangdong.
“The floor price provides a stable foundation and access to low-rate domestic construction lending as we advance our moly project, while keeping the material in South Korea strengthens local supply chains and supports domestic industry,’ noted Black. He added that it builds on the success of the company’s Sangdong tungsten project.
The Sangdong molybdenum project sits about 150 meters from the Sangdong tungsten project, which according to Almonty will allow enhance logistical efficiency, reduce costs and leverage shared infrastructure and expertise.
The company also emphasized that the offtake will benefit South Korea’s domestic supply chain.
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.