The product includes neodymium and praseodymium that is mined and processed at Hastings’ Yangibana project in Western Australia.

Neodymium and praseodymium are critical raw materials used in the manufacture of permanent magnets, a key component of electric motors.

This will be supplied to Schaeffler over an initial period of 10 years.

“This contract represents a very important milestone in the development of Hastings as an emerging supplier of rare earth carbonate from Australia to Germany, an industrialised nation with a growing demand for a critical raw material used in many advanced technologies where a permanent magnet is needed,” Hastings executive chairman Charles Lew said.

The agreement also represents further security that Hastings will be eligible for a German Government loan to support its mine and processing plant construction.

Hastings flagged a possible expansion of its partnership into other downstream rare earth processed products with Schaeffler.

The two companies announced their commitment for a long-term partnership last year in a bid to enable Schaeffler to develop an independent supply chain for its e-motor business for the electric vehicle industry.