Hyundai Motor inks long-term deal to receive rare earth from Australia

[Source : Arafura Resources]

Hyundai Motor Group has secured a stable delivery of rare earth materiasloxide essential for making electric cars from Australia, enhancing its EV supply chain ecosystem heavily affected by Chinese companies.

The South Korean auto giant group Monday announced it signed a binding agreement with Australia’s Arafura Resources for a supply of up to 1,500 tons of a rare-earth oxide per year. The long-term deal signed in Seoul last weekend is an extension of a memorandum of understanding signed by the two parties in May.

Under the agreement, Arafura will deliver contract quantities of Neodymium-Praseodymium (NdPr) oxide from its Nolans project in Australia’s Northern Territory to Hyundai Motor over seven years from 2025. NdPr will be used in the making of electric motors of EVs.

Rare earth is a key raw material in making an EV, along with lithium, nickel, and cobalt, which are used in battery manufacturing. An average of 3 kg of rare earth is used to make one electric car.

Arafura Resources is an Australian mineral exploration company headquartered in Perth, Western Australia. It was listed on the Australian Stock Exchange in 2003.

By Lee Young-wook and Minu Kim