MHM Metals adds second contract for proposed U.S. aluminium recycling facility

MHM Metals (ASX: MHM) has secured an additional processing contract for the supply of feedstock to the planned U.S. salt slag and black dross processing facility.

The company reached a milestone in the development of the global expansion of its aluminium waste recycling technology by agreeing a first contract on November 4, 2011.

The second contract is for twelve months and has been structured as a ‘tipping’ arrangement, where MHM assumes ownership of recovered aluminium, salt flux and aluminium oxide.

The contract provides a mechanism for the parties to explore a tolling arrangement where the customer retains ownership of recovered aluminium and salt flux, on the basis of demonstrated recoveries.

The company said details of the contract must remain confidential and MHM must refrain from revealing the counterparty or contract terms due to the dynamics of the US aluminium industry.

The company expects throughput of the first U.S. plant to remain 200,000-250,000 tonnes per annum and is continuing to engage with a number of other companies with substantial salt slag and black dross volumes and aims to secure additional processing contracts in the near future.

Site due diligence continues to progress well, and MHM remains on track to complete the land acquisition at the end of January subject to finalisation of government incentives and concluding environmental due diligence.

Phase one of the environmental study of the property has not identified any issues of concern, and the testing is being conducted as part of a standard approach applied with any US property acquisition.

The details of the property purchase and availability of government incentives and support for the project will be released in the coming weeks.

MHM is bullish that the environmental and economic benefits of its business, and the positive impacts upon the sustainability of the aluminium industry, will herald significant support from government.