Suvo has taken its first step towards securing a new long-term agreement to supply up to 10,000tpa of refined kaolin products to Rezel Catalysts Corporation.

Under the binding memorandum of understanding and collaboration agreement, which includes a 1,000t initial purchase order for Pittong kaolin, the two companies will seek to define a five- to 10-year supply agreement for refined kaolin products.

Rezel will also work with Suvo Strategic Metals (ASX:SUV) to develop further specialised, high-quality catalyst-grade premium kaolin products and technical solutions for the global catalysts industry.

Kaolin samples from the company’s Pittong operations in Victoria have already met all of Rezel’s quality evaluations, and testing will be conducted on material from its White Cloud project in Western Australia.

This is a big step forward for Suvo as Rezel is a leading global catalyst, zeolite, and molecular sieve producer with annual capacity of 50,000t and work is underway for a capacity expansion to produce premium quality fluid cracking catalysts and zeolites.

Adding interest, Rezel was co-founded by its technology holder Dr Zhou Runsheng and Shenghe Resources Holdings, the world’s second largest rare earths supplier.

“This agreement not only highlights the high tech markets that can be addressed with both Pittong and potentially White Cloud products, it also significantly underpins the upgrades we are currently reviewing for our Pittong operations,” Suvo executive chairman Robert Martin said.

Dr Zhuo said that Rezel was extremely satisfied with the quality of the company’s products and would like to establish a long-term and stable partnership.

“We will continue to expand bilateral cooperation with them, both technically and commercially, not only on Suvo’s Pittong operations but potentially their White Cloud kaolin project also,” he added.


Further work

Rezel’s successful initial evaluation of Suvo’s refined kaolin sample will be followed by additional evaluation based on Rezel’s specification and quality required for premium quality catalysts.

These further tests will examine samples of different sizes at different stages.

Should these tests be successful, the two companies will then proceed with defining a commercial business agreement that will see Suvo sell Rezel between 5,000t and 10,000t per annum of refined kaolin.

Suvo currently produces about 25,000tpa of refined kaolin from Pittong but has recently kicked off an aggressive upgrade program to increase production capacity, a move that could well be underpinned by a long term supply agreement with Rezel.

This article was developed in collaboration with Suvo, 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.