It appears to rust seizure. First I remove the rust on the axle shaft. Here I would first try a coccus cloth but according to the image it appears to heavily rusted so it might take Muriatic Acid to quickly remove the rust. Now this stuff can produce toxic fumes so an organic vapor mask should be use along good ventilation. The collar will rust galled so that will be a pain to get loose. So getting collar heated to glowing red should allow you to use heavy pliers to twist off onto the cleaned shaft area. Basically you trying expand the collar so it can slip off the rusted area. Once removed it either needs to cleaned or replaced.
Caution do not get the Muriatic Acid on Aluminum as it will destroy it.
Hi mate The fact that there is a pre prepared hole in one of the pieces means to me that this part can be prevented from rotating by the insertion of suitable sized steel rod, while some other part is turned. This then loosens any siezed sections. The more you can get it to rotate the better your chances of overcoming any siezing issues. Just my 2 bobs worth, and you may have tried this already.
Last edited by twostroker; 16/01/2206:47 AM. Reason: Spelling correction
KoThx for all the tips folks. After allowing it to be absorbed overnight, the Penetrene and blow torch did the job. Taking the axle to the metal fabricator shortly to have it welded up. Also got new rear axle bearings from Pine Rivers Bearings $27 a pair.
The newly repaired (mig welded) rear axle and new bearings ready to be fitted. Should have the "Mario Kart" back together tomorrow. Can't wait to see how well it performs on new running gear..