RareX eyes early cash-flow with fertile phosphate MOU for Cummins Range Project
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RareX has signed a binding Memorandum of Understanding (MoU) with Ord River District Co-operative Ltd (ORDCO) to progress commercial off-take and product development opportunities for phosphate products from its Cummins Range Project.
The potential products and by-products from RareX’s (ASX:REE) proposed mine site and rare earths refinery include phosphoric acid, rock phosphate, mono super phosphate (MSP), double super phosphate (DSP), mono ammonia phosphate (MAP), double ammonia phosphate (DAP) and gypsum – all of which are currently imported to the region from interstate and international suppliers.
The MOU follows the company’s recent scoping study and metallurgical testwork results which confirmed the potential to produce a valuable phosphate co-product as part of the rare earths production at Cummins Range.
The MoU also considers undertaking studies to evaluate the potential to capture carbon credits.
The east Kimberley is the largest producer of irrigated horticulture in the region, powered by the Ord Irrigation Scheme as water from Lake Argyle and Lake Kununurra is diverted and gravity fed through kilometres of open channels to irrigate farmlands.
And the total area of intensive agriculture and the demand for fertilisers is increasing quickly across the Ord River Irrigation Area (ORIA), which has expanded from a historical base of around 15,000 ha to approximately 21,000 ha and developments that will bring the area to 28,000 ha are underway with the potential to increase to 60,000 ha or more.
Outside the ORIA, value-add developments on many stations, such as dryland cropping using wet season rainfall, are now resulting in significant cropping areas.
“At the current time, all fertiliser requirements for the ORIA and surrounding farms are purchased internationally or from southern distributors by ORDCO on behalf of growers,” ORDCO CEO Dan Raymond said:
“ORDCO is partnering with RareX to locally source and develop a range of farm fertiliser products from their Cummins Range Project.
“If successful, this will significantly change the cost of fertiliser inputs for the northern agriculture sector and help to breakdown another barrier to successful farming in the north.”
RareX is confident there is a “significant opportunity” with the MOU to add further value to the Cummins Range project – with the potential to generate early cash-flow from the local distribution of direct-application phosphate products ahead of the commencement of rare earth production.
“In choosing to collaborate with ORDCO, we are pleased to be working with local communities in the region where we operate as part of a sustainable venture that could deliver significant benefits to stakeholders across the district,” MD Jeremy Robinson said.
“From a commercial perspective, we also like the opportunity to potentially develop early cash-flow by selling phosphate products locally ahead of the full development of our rare earths business.”
This article was developed in collaboration with RareXLimited, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.