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Friday, Feb 14, 2025
Mugglehead Investment Magazine
Alternative investment news based in Vancouver, B.C.

Rare Earths

Canada gives Arafura Rare Earths C$408M loan to advance Australian neodymium mine

Local mining magnate Gina Rinehart is the company’s number one shareholder

Arafura Rare Earths gets C$300M Canadian loan to advance Australian mining site
Recent shot of a local fencing crew on site at the Nolans project. Photo credit: Arafura Rare Earths

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).

Canada gives Arafura Rare Earths C$408M loan to advance Australian neodymium mine

Recent landscape shot of the Nolans project, Northern Territory. Photo credit: Arafura Rare Earths

Read more: U.S. Gold interview highlights importance of flagship site’s new mining permit

Read more: Scotiabank gives Calibre Mining a positive grade in new research report

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.

 

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