Australian Strategic Materials (ASX:ASM) has signed a five-year supply deal with USA Rare Earth (USARE).

Its subsidiary, ASM Korea, will provide neodymium iron boron (NdFeB) alloy to support USARE’s scaled-up production of rare earth magnets from 2024, strengthening ties between the US magnet industry, and ASM’s growing customer base.

The deal will cover most of USARE’s metal alloy needs for its magnet production until it starts using supplies from its Texas-based Round Top reserve.

Demand for NdFeB magnets and the rare earth elements they contain, including neodymium, dysprosium, and terbium, is projected to grow by a CAGR of 7.5% from 2023 through 2040.