Australian mining firm FYI Resources has signed a binding heads of agreement to acquire Minhub Operations (MOPL) in stages, marking its entry into the rare earths market.

MOPL has partnered with Arafura Rare Earths, an Australian company that produces rare earth metals.

MOPL was specifically established to build and operate a mineral processing plant in the country and aims to facilitate the development of rare earth mineral sand deposits that currently have significant barriers to entry.

The partnership between MOPOL and Arafura is exploring options to develop the Minhub Project, a high-return rare earth metals and mineral sands processing hub in Darwin, Northern Territory, Australia.

The Minhub Project has been proposed as a collaborative, staged development strategy that aligns with feedstock projects and the development of Arafura’s Nolans project.

Minhub’s feasibility study is anticipated to be completed early next year.

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According to FYI, its acquisition of MOPL can help quickly move into the development and construction phases of the Minhub project with Arafura.

MOPL also has well-developed relationships with stakeholders, including upstream concentrate suppliers.

With the assets and relationships, FYI can develop its own capabilities to create a project that can provide downstream value addition and develop the rare earths supply chain in Australia.

The acquisition of MOPL will follow a feasibility study for the project early next year with the goal of simultaneously developing the Minhub and Nolans projects.

FYI Resources managing director Roland Hill said: “This is an exciting opportunity for FYI and demonstrates our commitment to being a key contributor to Australia’s critical minerals sector. While we continue to advance and de-risk our core high-purity alumina (HPA) project, the planned acquisition of MOPL will create a great opportunity to be part of a unique integrated rare earth production strategy with Arafura that complements our production intentions, as well as assist Australia’s sovereign supply objectives for critical minerals.”

As part of the acquisition, FYI will receive 50% of MOPL for a consideration of four million shares in FYI.

It has further committed to providing a minimum of A$450,000 ($305,100) for the feasibility study of the Minhub facility.

Conditional to the completion of the feasibility study, the remaining 50% of shares in MOPL may be purchased by the company by issuing 15 million shares or by paying A$2.5m ($1.69m).