KEY POINTS
- Eastinco has started a tungsten trading trial in Rwanda.
- Aterian plans to raise about £180,000 in working capital.
- The company aims to build a diversified critical minerals trading business.
LSE-listed Aterian has started a trial to trade tungsten ore and concentrates in Rwanda as it expands the activities of its wholly owned subsidiary, Eastinco, beyond tantalum-bearing materials.
The company said the move is part of its strategy to build Eastinco into a broader critical minerals trading platform that can generate recurring cash flow and support Aterian’s wider exploration portfolio.
Eastinco has historically focused mainly on tantalum-bearing concentrates. It plans to use its existing procurement network, local infrastructure, responsible-sourcing systems and international trading relationships to enter the tungsten market.
The initial programme will involve small, controlled transactions carried out on a lot-by-lot basis.
Eastinco has started putting in place the operational systems needed to market, trade and manage the risks associated with tungsten-bearing materials sourced from approved Rwandan suppliers.
The company will use the trial to assess supplier reliability, material quality, product specifications, pricing and relationships with buyers.
Aterian also wants the programme to establish dependable sources of responsibly sourced tungsten ore and concentrates while developing consistent grades and specifications for material traded through Eastinco.
The trial will also help the company determine appropriate buying and selling prices and establish the working capital cycle required to support regular transactions.
Aterian seeks £180,000 to support expansion
Aterian plans to raise about £180,000 in additional working capital through a zero-coupon convertible loan note issue to existing long-term shareholders.
The funding will support the early stages of the tungsten trading operation, including new operational systems and an expansion of Eastinco’s existing premises.
The expanded facilities will allow the company to segregate and purchase tungsten-bearing materials on a wholesale basis and increase its ability to aggregate commercially significant parcels for onward sale.
The convertible loan notes will convert into Aterian shares at 25p per share following a holder conversion notice or automatically on December 31 if they have not been converted earlier.
Aterian chairperson Charles Bray said the company intends to start with carefully controlled tungsten volumes before increasing the amount of capital committed to the trading cycle once the model has been tested.
The company believes Eastinco can build on its existing relationships in Rwanda to establish a wider portfolio of traded critical minerals.
The longer-term objective is to develop Eastinco into a diversified and scalable trading business focused on responsible sourcing and strong material traceability.
Aterian wants the trading operation to eventually generate enough cash flow to contribute materially to the group’s corporate costs.
The tungsten trading expansion is also intended to provide a source of cash flow while Aterian continues developing its mineral exploration assets.
The company has exploration interests in copper, lithium and tantalum and expects to advance these projects increasingly through project-level partnerships.
Bray said the tungsten trial represents another step toward making Eastinco a diversified critical minerals trading business capable of generating recurring cash flow.
The success of the initial transactions will determine how quickly Aterian scales the business and increases the capital deployed into tungsten trading.
