Osmond Resources (ASX:OSM) agreed to collaborate with Spanish engineering firm Técnicas Reunidas to produce mixed rare earth carbonates and oxides for the European Union market, according to a Monday filing with the Australian bourse.

Under the agreement, Osmond Resources will own the mixed rare earth carbonates facility while Técnicas Reunidas will provide the technology as well as engineering, procurement, and construction services, the filing said.

The companies will target Spanish and EU funding to support the project, per the filing.

Osmond Resources shares fell 5% in midday trade on Monday.