St George Mining Ltd (ASX:SGQ, OTC:SGQMF) has entered a collaboration with the State of Minas Gerais and Brazilian industrial group Lima & Pergher to assess the development of a rare earths processing centre that could form a key part of Brazil's domestic mine-to-magnet supply chain.
The proposed Minas Gerais Rare Earths Processing Centre would process material from emerging projects across the state, including St George's Araxá Rare Earths-Niobium Project, and could produce refined materials suitable for downstream magnet manufacturing.
The parties have signed a Protocol of Intent establishing a framework to evaluate the centre, including the potential for its joint construction and operation. The initiative was unveiled at the EXPOSIBRAM mining conference in Belo Horizonte.
The processing centre would target the midstream portion of the rare earths supply chain, with the ability to handle feedstocks including rare earth concentrates, mixed rare earth carbonate and oxalate.
Its potential products could feed downstream users including MagBras, which is developing Brazil's first rare earth magnet-making facility.
Lima & Pergher, through its START chemical and industrial division, operates a major industrial complex at Uberlândia in Minas Gerais that could host the centre.
St George would contribute technical expertise and potentially supply rare earths feedstock from Araxá, while also helping connect the project with international processing technology providers.
The Minas Gerais Government would support licensing, supplier relationships and applications for state tax incentives.
St George executive chair John Prineas said establishing domestic processing could strengthen Minas Gerais' position in global rare earths production and complement development of Araxá.
Araxá provides potential feedstock
The proposal follows a major resource upgrade at Araxá earlier this month.
The project now hosts a JORC mineral resource of 111.2 million tonnes at 3.57% total rare earth oxides (TREO) and 0.57% niobium pentoxide, further expanding what the company says is the largest and highest-grade hard-rock rare earths resource in South America.
The upgrade also establishes Araxá as hosting the world's largest undeveloped Measured niobium resource, while Measured and Indicated resources have increased 155% to 75.2 million tonnes at 3.64% TREO, and 0.58% niobium pentoxide, containing around 2.7 million tonnes of TREO, including 520,000 tonnes of neodymium-praseodymium oxides.
St George is continuing discussions with potential offtake counterparties in the US, Asia and Europe, while international groups have also expressed interest in supporting the proposed processing centre through arrangements that could include technology licensing.
Comparison of rare earth deposits based on mineral tonnage. Source: Terra Studio
Under the collaboration framework, St George and START will assess establishing the facility at START's Uberlândia industrial complex and could form a new company to jointly own and operate it.
Operations are targeted to begin by 2030, subject to a final investment decision and necessary licensing approvals.
START's existing site spans more than 500,000 square metres and offers established industrial zoning, power, roads, utilities, chemical-processing infrastructure and access to an experienced workforce.
No construction commitment has yet been made. Any decision to proceed will require a definitive agreement, with funding contributions to be determined as part of a future investment decision.