Tronox Holdings plc TROX has entered into a cooperation and investment agreement with JX Advanced Metals Corporation (“JXAM”) to jointly advance rare earth and critical minerals opportunities in Australia and the United States. The agreement is aimed at developing additional value from Tronox’s mineral resources while supporting the diversification of rare earth supply chains for applications such as semiconductors, advanced electronics, robotics, automotive and defense.
Tronox and JXAM Advance Rare Earth Projects
Under the agreement, Tronox and JXAM will each fund 50% of approximately $32 million in planned investment. The funding will support several development activities, including a definitive feasibility study for a proposed rare earth cracking and leaching facility in Australia, a pre-feasibility study for a proposed rare earth oxide refinery in the United States and the development of a U.S.-based pilot facility capable of producing initial quantities of high-purity rare earth oxides.
The Australian facility is being considered for the Rockingham Industrial Zone in Western Australia, near Tronox’s existing Kwinana titanium dioxide facility. The U.S. refinery is proposed for Tronox-owned land adjacent to its Hamilton, MS, facility. The proximity of these projects to Tronox’s existing operations could allow it to leverage its established infrastructure, mineral resources and processing expertise.
The proposed Australian and U.S. facilities are expected to have the potential to produce up to 10,000 tons per year of total rare earth oxides.
Tronox Eyes Joint Venture for Rare Earth Projects
The current agreement focuses on determining the technical, economic and commercial feasibility of the proposed projects. If the studies demonstrate sufficient viability, Tronox and JXAM intend to explore establishing a joint venture to finance, construct and operate the facilities.
The companies are also engaging with government-backed financing institutions, including the U.S. Export-Import Bank, Export Finance Australia and relevant Japanese financial institutions, as they evaluate potential funding alternatives for the projects.
The cooperation could also provide a framework for evaluating additional critical minerals and materials contained in Tronox’s mineral resources, including niobium, scandium, zirconium and hafnium.
Price Performance of TROX
Shares of TROX are up 2.1% over the past year compared with the industry’s 2.1% fall.
TROX’s Zacks Rank & Key Picks
TROX currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Ternium S.A. TX, Avient Corporation AVNT and Innospec Inc. IOSP. TX and AVNT currently sport a Zacks Rank #1 (Strong Buy), while IOSP carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TX’s current-year earnings is $6.54 per share, implying a 201.4% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the negative average surprise being 11.1%.
The Zacks Consensus Estimate for AVNT’s current-year earnings is pegged at $3.2 per share, indicating a 13.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 3.4%.
The Zacks Consensus Estimate for IOSP’s current-year earnings has moved up 3.9% over the past 60 days. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 12.9%.
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Tronox Holdings PLC (TROX): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).