(Reuters) - Australia's Northern Minerals Ltd (AX:NTU) said on Monday it has signed a rare earths supply agreement with Germany's Thyssenkrupp AG (DE:TKAG), just days after terminating a deal with China's Lianyugang Zeyu New Materials Sales Co.
Thyssenkrupp has agreed to purchase the entirety of the heavy rare earth carbonate from the Browns Range project, Northern Minerals said in a statement.
The company did not disclose the financial terms of the deal, which takes effect immediately and includes current stockpiled product.
Northern Minerals Chief Executive Officer George Bauk said the company will benefit from the lack of price caps in the agreement, noting that Dysprosium and Terbium prices are up 60 percent and 35 percent respectively over the year to date as electric vehicles become more popular.
Prices of rare earths elements have jumped this year on speculation that China, which controls about 80 percent of the supply of materials used in everything from electric cars to smartphones, could curb their shipments to the United States due to their ongoing trade war.
"The continued shift of new car sales to electric vehicles is gaining traction, with all major carmakers introducing EV variants of existing models over the coming years," Bauk said in a statement. "With this shift, both car and component makers are accelerating plans to invest further down the production chain in order to secure surety of supply."
The new deal also includes a provision for Thyssenkrupp to work with Northern Minerals on potential future expansion of the project.
Northern Minerals cited a contract breach when it cancelled its two-year agreement with Lianyugang Zeyu on Aug. 6, but did not give further details.