Arafura Rare Earths Limited signs five-year offtake for 850 tonnes a year
Volumes are 70 per cent above the May term sheet and will ramp up as Nolans reaches nameplate production.
Ines Halvorsen
An offtake for up to 850 tonnes a year was announced on Monday by Arafura Rare Earths Limited ASXARU in a binding agreement for its Nolans development. Annual contract volume is 70 per cent above the 500 tonnes in the May 13 term sheet. The unnamed global trading company agreed to a five-year term, with a two-year extension requiring mutual agreement.
The agreement covers neodymium-praseodymium, or NdPr, oxide and associated heavy rare earths from Nolans in Australia's Northern Territory. Prices will be denominated in US dollars and linked to an independent global seaborne index. The Oct. 12 notice gives no fixed per-tonne price or total contract value.
Arafura's board approved Nolans development in May 2026 after milestones in its financing and offtake strategy, according to its Oct. 9 construction update. Bulk earthworks are scheduled to begin in the December quarter, so the larger sales commitment comes as site preparation advances.
Shares were quoted at A$0.16 on the ASX at 3:52:05 p.m. AEDT on Monday, according to Google Finance ASXARU.
The contracted annual volume will ramp up to 850 tonnes when Nolans reaches nameplate production. That makes the headline quantity a full-production sales volume; the Oct. 12 announcement gives neither an annual ramp-up schedule nor a calendar date for first deliveries.
The agreement also retains conditions precedent. Arafura describes them without listing the individual requirements in the announcement.
"Conditions precedent that are customary for arrangements of this nature," Arafura said in its Oct. 12 announcement.
The company says it remains in discussions with other prospective buyers. It intends to withhold counterparty identities where ASX guidance permits, unless the identity itself is material, to protect commercially sensitive negotiations.
The increase adds 350 tonnes of annual NdPr sales at full production compared with the May 13 term sheet. Arafura described that earlier term sheet as binding too; Monday's announcement reports execution of the offtake agreement at the larger volume.
Nolans Targets December-Quarter Bulk Earthworks
Arafura's Aug. 3 presentation described Nolans as an integrated ore-to-oxide operation, with a production target of 4,440 tonnes of NdPr oxide annually. The presentation treated that output as a forecast, subject to its production-target assumptions.
Arafura warned in the Aug. 3 presentation of low geological confidence in inferred resources. It said there was no certainty those resources would become indicated resources or that the production target would be realised.
The Aug. 3 presentation described equity as secured, conditional on completion under the EFA, KfW and NRFC subscription agreements. Those subscriptions remained subject to conditions precedent. That was the status described in August; the Oct. 12 offtake notice supplies no new financing amount or updated timetable for completing those subscriptions.
In the Oct. 9 update, managing director Darryl Cuzzubbo said hundreds of people would be involved in building the mine and processing plant over the next three years. Early works and mobilisation had been underway since May.
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Arafura broke ground on Oct. 8, following early works and mobilisation after the board's May approval. Access earthworks began in September. The next scheduled construction milestone is the start of bulk earthworks in the December quarter of 2026.
