Australia’s magnet metal miner Arafura Rare Earths Limited (ASX: ARU) has secured a major loan needed for continued development of its primary project.
Up to C$408 million will be provided by Export Development Canada (EDC). The funds will be used for Arafura’s Nolans project in Australia’s Northern Territory. It will be comprised of a mine, process plant and other necessary infrastructure.
The company is currently working toward a final investment decision prior to ensuing production once construction is complete. Arafura has received conditional approval for 68 per cent of its target sum. Australia’s Commonwealth Government just provided a substantial amount of cash while the Export-Import Bank of Korea has offered to provide financing too.
“EDC has responded strongly to Nolans as a strategic opportunity that will underpin the electrification economy,” Managing Director Darryl Cuzzubbo said Monday. Through its financial assistance, Canada will help secure a reliable supply of the commodities, reducing reliance on China.
Described by the company as being “shovel-ready,” the operation is expected to cater to 4 per cent of the global demand for neodymium and praseodymium. Arafura anticipates a significant supply deficit for those rare earths in the coming years.
“Neodymium and praseodymium are critical in electrical vehicles, wind turbines and robotics,” Cuzzubbo added.
Gina Rinehart, Australia’s wealthiest woman, is the company’s top shareholder. She has been buying up stock in other rare earth elements producers like Lynas Rare Earths Ltd (ASX: LYC) and MP Materials (NYSE: MP).
Recent landscape shot of the Nolans project, Northern Territory. Photo credit: Arafura Rare Earths
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Third rare earths processing plant in Australia
Upon plant completion, Arafura will join the ranks of Lynas and Iluka Resources (ASX: ILU). Lynas has a processing facility in Western Australia that refines concentrate from its Mt. Weld mine and Iluka has another currently under construction.
Arafura has already inked supply agreements with the major automotive manufacturers Hyundai Motor Company (KRX: 005380) and Kia Corp (KRX: 000270). The company will supply them with up to 2,000 tonnes annually once production starts.
The site’s primary deposit also contains significant quantities of the radioactive elements uranium and thorium.
rowan@mugglehead.com
