Brazilian Rare Earths plans demerger of Amargosa bauxite-gallium project

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Brazilian Rare Earths Limited has announced plans to demerge its Amargosa Bauxite-Gallium Project in Brazil into a new ASX-listed company, Alurion Resources Limited.

The proposed move would establish Alurion as a standalone bauxite and critical minerals company with its own management team, board and capital structure, while Brazilian Rare Earths continues focusing on its rare earth and broader critical minerals portfolio.

The Amargosa project, located in Bahia, Brazil, hosts a JORC-compliant mineral resource estimate of 568 million tonnes, including 98 million tonnes of direct shipping ore (DSO) bauxite grading 41.9 per cent Total Available Alumina (TAA).

According to the company, the project has undergone more than a decade of exploration work, including earlier exploration activities carried out by Rio Tinto.

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Brazilian Rare Earths said the initial development strategy for Amargosa is based on direct shipping bauxite production without requiring major beneficiation plants or tailings infrastructure, helping reduce upfront capital costs and potentially shortening development timelines.

The company added that a scoping study, based on spot pricing of USD 71 per dry metric tonne CIF China, estimated an after-tax net present value (NPV) of USD 630 million, with an internal rate of return (IRR) of 82 per cent and a projected payback period of 1.2 years.

Initial capital expenditure for the first-stage development was estimated at USD 119 million, including contingency provisions.

Amargosa North is located around 160 kilometres from Brazil’s Port of Enseada, which the company said provides access to seaborne export markets.

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Beyond bauxite production, the project also contains gallium along with potential titanium, zircon and rare earth mineral opportunities that may be evaluated further in the future.

Under the proposed structure, eligible shareholders of Brazilian Rare Earths are expected to receive Alurion shares through an in-specie distribution, while the parent company plans to retain a strategic shareholding of around 17-18 per cent following the IPO.

Alurion is also planning an IPO targeting between AUD 30 million (USD 19.5 million) and AUD 50 million (USD 32.5 million) to support project development.

Bernardo da Veiga said the demerger would allow Amargosa to advance as a dedicated bauxite and critical minerals business while enabling Brazilian Rare Earths to maintain a sharper focus on rare earth development.

The company said the proposed transaction remains subject to shareholder approval, regulatory clearances, ASX listing requirements and market conditions.

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