Rare earth developer secures cost reductions, strengthens global supply chain strategy, and positions for growth.
Australian Strategic Materials Limited (ASX: ASM) has announced significant progress at its flagship Dubbo Project in New South Wales, following the completion of a Heap Leach Scoping Study in July 2025. The study outlines a simplified development pathway that reduces upfront capital costs, lowers operating expenses, and accelerates the timeline to production.
The Dubbo Project is one of Australia’s most advanced critical minerals developments. Its potential to produce light and heavy rare earth oxides—including neodymium, praseodymium, terbium, and dysprosium—comes at a time of heightened global demand for secure, diversified supply chains.
Key Findings from Heap Leach Scoping Study
ASM reported that the heap leach development option could transform project economics by lowering costs and simplifying execution.
Highlights include:
- ~56% reduction in forecast capital expenditure from the A$1.67 billion estimate in 2021.
- Operating costs forecast to be in the lowest quartile among ex-China rare earth producers.
- Pre-tax NPV₈% of A$1.47 billion across multiple pricing scenarios.
- Forecast internal rate of return (IRR) of 22.9%.
- Targeted production: 1,157 tonnes of NdPr oxide, 72 tonnes of Dy oxide, and 13 tonnes of Tb oxide annually.
The scoping study indicates the project would break even at an NdPr price of USD 87/kg, Tb at USD 1,160/kg, and Dy at USD 258/kg.
Government and Funding Support
The Australian Government awarded ASM a A$5 million grant under the International Partnerships in Critical Minerals program to support the Rare Earth Options Assessment. This funding, matched by ASM, enabled metallurgical testing and engineering studies that confirmed heap leach as a viable development pathway.
Federal Resources Minister Madeleine King highlighted the project’s role in strengthening sovereign supply capabilities, stating that the initiative “positions Australia at the forefront of global efforts to diversify rare earth supply chains”.
Strategic and Economic Benefits
ASM Managing Director Rowena Smith said the heap leach option “offers a simplified, de-risked development pathway that enhances Dubbo’s attractiveness to offtake partners and financiers.”
The company noted the approach aligns with market imperatives as global manufacturers seek alternatives to Chinese supply amid recent export restrictions.
By focusing on separated rare earth oxides in the first phase, ASM aims to simplify offtake negotiations and secure early-stage funding, paving the way for a second-phase expansion into a broader product suite.
Resource and Exploration Updates
As at 30 June 2025, the Dubbo Project’s Toongi deposit retained the mineral resource and ore reserve estimates reported in 2021. Total resources stand at 75.2 million tonnes grading 1.89% zirconia, 0.04% niobium pentoxide, and 0.74% total rare earth oxides (TREO).
In FY26, ASM will progress a Pre-Feasibility Study to advance the heap leach pathway. Workstreams include metallurgical optimisation, JORC-compliant ore reserve estimation, and pilot-scale production of separated oxides in collaboration with ANSTO.
Korean and US Expansion
The company’s Korean Metals Plant (KMP) achieved a milestone in FY25 with the first commercial sale of terbium and dysprosium metals to Neo Performance Materials in Estonia. Installed capacity for NdFeB alloy is 1,300 tonnes per annum, with design potential of 3,600 tonnes.
ASM’s Korean Metals Plant achieved its first commercial sales of terbium and dysprosium in FY25.
In parallel, ASM advanced plans for a US-based metallisation facility, having submitted a whitepaper and proposal to the Department of Defense in 2025. Site selection is expected to conclude in 2026, with construction targeted for 2027.
Market and Strategic Context
Global supply chain concerns intensified in early 2025 after China imposed new export restrictions on rare earths, including dysprosium and terbium. These measures caused temporary disruptions for European and US manufacturers, underscoring the urgency for diversified supply sources.
Demand for rare earths is forecast to rise sharply, driven by growth in electric vehicles, renewable energy, and defence applications. ASM’s Dubbo Project is positioned as one of the few advanced developments outside China capable of supplying both light and heavy rare earths.
Investor Outlook
ASM reported FY25 revenue of A$3.17 million, up 2% year-on-year. The net loss after tax narrowed to A$24.6 million, from A$25.2 million in FY24. Closing cash stood at A$19 million, compared with A$47.6 million a year earlier.
The company also secured ongoing support from export credit agencies, including a conditional A$400 million Letter of Interest from Export Development Canada, alongside prior commitments of US$600 million from US EXIM and A$200 million from Export Finance Australia.
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Final Thoughts
ASM’s heap leach breakthrough marks a pivotal step in advancing the Dubbo Project, offering lower costs, faster timelines, and stronger economics. Combined with government backing, strategic international expansion, and rising global demand, the project positions ASM as a key player in diversifying rare earth supply chains.
FAQs
1: What is the ASM Dubbo Project?
The ASM Dubbo Project is a rare earths and critical minerals development in New South Wales, supplying key elements for EVs, renewables, and defence.
2: What did the Heap Leach Scoping Study achieve?
The Heap Leach Scoping Study reduced estimated capital costs by 56% and forecast lower operating expenses with accelerated production.
3: Why is the ASM Dubbo Project important globally?
It strengthens supply chains outside China, ensuring reliable access to rare earths for advanced manufacturing and clean energy industries.
4: How is the project funded?
ASM secured A$5 million from the Australian Government and over A$1.5 billion in conditional international export credit agency support.
5: Which rare earths will the project produce?
The project will supply neodymium, praseodymium, terbium, and dysprosium oxides, in addition to other critical minerals.
