The MoU is with major shareholder and strategic partner Shenghe and establishes a framework to enter future binding agreements.
It covers two key areas; (1) product off-take and marketing of rare earth products produced from Kvanefjeld, and (2) strategic development execution.
The off-take amount is for 32,000 tonnes per annum of contained rare earth in chemical concentrate, or 34,000 tonnes per annum of contained rare earth in mineral concentrate.
Greenland’s managing director John Mair said: “This MoU represents an important milestone in the relationship between the company and Shenghe.
“The agreement builds on the strategic cooperation agreement entered into in 2016 that saw Shenghe become our major shareholder.
“It demonstrates the strong intention of both parties to establish a framework for the commercialisation of the Kvanefjeld project.”
A blueprint for Kvanefjeld’s future
The MoU, in essence, provides a blueprint for how Greenland Minerals and Shenghe intend to cooperate in developing the Kvanefjeld project.
Shenghe is capable and has the intent to process the volumetrically significant output from Kvanefjeld given their large-scale processing and marketing capabilities.
Shenghe ability to provide the critical link from mine to the marketing of industry-ready rare earth products sets Greenland Minerals apart from other emerging rare earth companies.
MoU: acquisition and marketing of project output
Shenghe has expressed an intent to acquire all rare earth output produced from Kvanefjeld at international traded prices.
It has also agreed to enter a supplementary marking arrangement with Greenland Minerals for rare earth output it does not acquire.
MoU: strategic development plan
The strategic development plan for the project considers a staged development pathway and a non-China based separation plant.
The plan also encompasses a process to identify collaboration partners as required for financing and construction.
Finalising EIS for lodgement
Greenland Minerals is currently finalising the environmental impact assessment (EIA) for lodgement ahead of the public hearings process to obtain a mining licence.
The social impact assessment (SIA) which is also necessary for the public hearings was lodged in late July 2018.