MHM Metals lands first U.S. contract for aluminium waste recycling technology

MHM Metals (ASX: MHM) has reached a milestone in the development of its aluminium waste recycling technology by securing a contract for the supply of feedstock to its first U.S. salt slag and black dross processing facility.

The company's first overseas contract is for five years and has been structured as a tolling arrangement, where a fixed price per tonne is charged to the customer with MHM returning aluminium and flux to the customer while retaining ownership of recovered aluminium oxide.

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.

Also, MHM cannot reveal tonnages to be processed but the completion of this contract provides sufficient volume for the company to commence with U.S. plant construction.

The company expects throughput of the first U.S. plant to remain 200,000-250,000 tonnes per annum.

The supply contract is subject to a satisfactory visit by the U.S. aluminium company to MHM’s Australian operations in the near future.

MHM stated the contract also contains "clauses that permit the contract counterparty to cancel the contract should information as to its identity become public prior to commencement of MHM’s US operations."

The company 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.

Black dross is a by-product from reverberatory furnace operations and has a similar composition to salt slag, though often with a higher aluminium content.

Black dross would be recycled in the same way as salt slag, using the same plant and equipment to recover aluminium, salt/potash and AL80.

MHM recently appointed industry veteran John Pugh as director of operations, North America, which subsequently led the company to investigate black dross recycling opportunities.

The company said black dross recycling could be a potentially substantial additional revenue generator for MHM, with minimal investment of extra resources, as the recycling of salt slag and black dross went “hand-in-hand”.

MHM Metals shares jumped 14.3% to $0.87 in intraday trading this morning.