Hastings Technology Metals announced that it has signed a binding terms sheet with GR Engineering Services Limited (GRES) to deliver the Yangibana beneficiation plant and associated infrastructure.
The terms sheet outlines the essential features of the Engineering, Procurement, and Construction (EPC) work, with a formal agreement integrating the negotiated terms and other usual industry conditions expected by the end of July 2023. The parties will also sign an early works agreement, which will allow GRES to begin work immediately while awaiting the final agreement’s entry.
“The appointment of GR Engineering, one of Australia’s leading process engineering companies, for the construction of the Yangibana plant marks an important milestone on Hastings’ path to first rare earth concentrate production by late 2024. Achieving a fixed price EPC contract significantly reduces the risk of ongoing cost increases, which was a key objective set by the Hastings Board for interim CEO Alwyn Vorster when he joined in late 2022,” Hastings Executive Chairman Charles Lew said.
GRES will design and build the Yangibana beneficiation plant for $210 million, including engineering, manufacturing, procurement, installation, commissioning, and testing of the facility in less than 18 months. The facility will have a feed capacity of one million tonnes per year and an output capacity of 35,000 tonnes per year for rare earth concentrate. The start of mobilisation and construction is planned for Q3 CY2023.
“With $221 million in contractual commitments already made to date on the world-class Yangibana project, we remain confident it is well-positioned to move into main construction in Q3 CY2023, establishing Hastings as a significant player in the critical minerals sector and generating strong returns for our shareholders,” Lew stated.
In 2019, Hastings hired DRA Global as its Engineering, Procurement, and Construction Management (EPCM) contractor to handle front-end engineering and design (FEED) work to advance the early design stages, while the project scope was refined and project funding strategies were advanced. DRA Global has made significant progress on the design and engineering work to date, with approximately 50% design maturity reached under the existing EPCM type services contract.
Following a thorough and systematic review of the project’s capital expenditure over the last three months, Hastings has determined that a fixed-price EPC contract is the best option for significantly reducing overall project risk.
“Hastings also acknowledges the quality engineering and design work completed by DRA Global since 2019, which has enabled Hastings to progress critical path activities during the early stages of the project,” Hastings Chief Executive Officer Alwyn Vorster said.
Vorster added, “The EPC contract is an important outcome of the project review initiatives which are close to being finalised and will set out the overall project execution strategy, capital cost and schedule, enabling the Company to clarify its medium to long term funding requirements.”
