Critical Metals plans $1.5B rare earths JV in Saudi Arabia

Nasdaq-listed Critical Metals Corp has executed a nonbinding term sheet with Saudi Arabian industrial conglomerate Tariq Abdel Hadi Abdullah Al-Qahtani & Brothers Company (TQB) to establish a 50:50 joint venture (JV) for the development of a rare earth processing facility in Saudi Arabia.

The proposed facility is expected to require capital investment of up to $1.5-billion (nearly SAR 5.6 billion) and would create a fully integrated mine-to-processing supply chain for rare earth materials, supporting defence, advanced manufacturing and energy transition industries aligned with the US and its allies.

Under the term sheet, the JV would process rare earth concentrates from the Tanbreez project in southern Greenland, with 25% of Tanbreez’s rare earths concentrate production allocated to Saudi Arabia for the life-of-mine under long-term, market-based offtake arrangements.

Key Details of the Deal:

- Integrated supply and processing partnership: Execution of a term sheet covering offtake rights, project financing and development, and the establishment of a 50:50 JV to build and operate a rare earth processing facility in the Kingdom of Saudi Arabia. The project will directly contribute to expanding global rare earth processing capacity outside China.

- US–Saudi Arabia alignment: Supporting Vision 2030 and strengthening the strategic defense supply chain, with the partnership targeting the supply of all finished products to the United States for use within the U.S. defense industrial base.

- Capital-efficient investment structure: Critical Metals will not issue new equity or incur project-level debt under the joint venture. The company will retain its 50% interest on a carried basis, with no capital expenditure obligations related to the construction of the processing facility.

- Strategic offtake arrangements: The joint venture framework includes the supply of 25% of Tanbreez’s rare earth concentrate production to Saudi Arabia over the life of the mine, under long-term, market-based commercial terms.

- High-tech end products: The processing facility is expected to produce separated rare earth oxides and metals, as well as advanced downstream products in later phases, including materials used in magnet manufacturing for aerospace, defense, and advanced industrial applications.

- Enhanced supply chain security: The partnership strengthens a resilient, long-term, and geopolitically diversified supply chain, linking Western-aligned upstream resources with downstream processing capabilities in the Middle East.

- Fully contracted supply structure: With the addition of a long-term commitment to supply 25% of production to Saudi Arabia, and together with previously announced agreements, 100% of Tanbreez’s rare earth concentrate output is now allocated under long-term offtake arrangements. This provides full revenue visibility and ensures secure supply to strategic markets throughout the mine’s operating life.