Ferro-Alloy Resources (LSE:FAR) has entered into a non-binding, non-exclusive memorandum of understanding with Chinese tyre manufacturer and carbon black distributor Qingdao Master Tyre covering the potential supply of up to 360,000 tonnes per year of a new carbon black substitute. The product, referred to as New CBS, is derived from high-carbon, low-vanadium waste rock at the company’s Balasausqandiq project in Kazakhstan.
The proposed New CBS was not included in the project’s most recent feasibility study and is therefore viewed as a potential incremental revenue stream. Ferro-Alloy said the material is being prioritised within Master Tyre’s long-term 2036 strategy and is currently undergoing testing as a substitute for both conventional carbon black and silicon dioxide in tyre rubber formulations.
If commercial terms are ultimately agreed, management believes the arrangement could materially enhance the already robust economics of the Balasausqandiq project. The potential partnership would also strengthen Ferro-Alloy’s positioning as a supplier of lower-emission, cost-competitive materials to the tyre and rubber industry, particularly within the Chinese market.
Despite the strategic upside, the company’s near-term outlook remains constrained by weak financial metrics, including ongoing losses, negative operating cash flow and negative equity. From a technical perspective, the shares have shown strong momentum above key moving averages, although overbought signals point to elevated near-term risk. Valuation support is limited given the loss-making profile and the absence of a dividend.
More about Ferro-Alloy Resources Ltd.
Ferro-Alloy Resources Limited is a vanadium-focused producer developing the large Balasausqandiq deposit in southern Kazakhstan. Vanadium is the principal product, alongside a carbon black substitute and several by-products. The project benefits from relatively low capital and operating costs and is being developed in two phases, supported by on-site processing facilities and an R&D centre focused on refining vanadium, molybdenum and nickel concentrates and advancing technologies for future vanadium and carbon-based products.
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