Alkane Resources Ltd (AX:ALK) has announced that it has signed a memorandum of understanding (MoU) (via its wholly owned subsidiary Australian Zirconia) with Siemens(DE:SIEGn) relating to its flagship Dubbo Zirconium Project (DZP). The purpose of the MoU is to advance the DZP, in particular to state each party's intention with respect to the procurement of Siemens’ equipment and operational solutions, and future offtake of products produced by the DZP. This follows Alkane’s 16 August announcement relating to a major zirconium agreement with a UK specialist chemicals firm. In our view, both agreements de-risk financing of the estimated A$1.3bn capex requirement for DZP and move it closer to the construction phase.
This MoU details Alkane’s and Siemens’ joint intention to enter into separate agreements for the purpose of progressing and implementing business opportunities such as offtake agreements for DZP products (eg rare earth products, specifically those related to the production of NdFeB permanent magnets, as well as the rare metals niobium, zirconium and hafnium in oxide, alloy or finished form), in addition to Siemens’ products and services. Such products and services relate to advanced infrastructure management systems, process automation solutions, power solutions, mechanical plant and services and product lifecycle management (including asset management, service and maintenance of systems supplied).
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