Arafura clears way for Australia's first ore-to-oxide rare earths plant

Arafura Rare Earths

21/05/2026 01:53

May 21 (Reuters) - Arafura Rare Earths ARU.AX said on Thursday it has made a final investment decision to develop its Nolans project in Australia's Northern Territory, which would be the country's first fully integrated ore-to-oxide rare earths operation.

Shares of the company rose as much as 13.6% to A$0.335 in their best intraday gain since March 11. The benchmark stock index .AXJO was up 1.7%, as of 0046 GMT.

The Nolans project is designed to deliver 4,440 metric tons of neodymium-praseodymium (NdPr) oxide annually, targeting markets outside China amid growing demand for rare earths used in electric vehicles and wind turbines.

Arafura said engineering contractor Hatch has been engaged to support development, with site works and early contractor mobilisation expected ahead of a planned construction start from September.

The final investment decision comes after a multi-year financing and offtake strategy that secured binding commitments from sovereign-backed institutions across four countries, alongside supply agreements with global manufacturers.

The financing package includes a A$481 million ($343.87 million) equity raise, A$230 million in equity subscriptions from Germany's state-owned development bank Kreditanstalt für Wiederaufbau and Export Finance Australia (EFA), and a A$200 million convertible notes term sheet with the National Reconstruction Fund Corporation.

The funding is part of a Western push to develop rare-earth supply chains with international partners outside top producer China.

The Australian government's Critical Minerals Strategic Reserve (CMSR), administered in partnership with EFA, issued a non-binding letter of support to potentially secure rights to up to 500 tons per year of NdPr oxide from the project, the firm said.

The CMSR secures supply of select critical minerals for Australia and key international partners.

($1 = 1.3988 Australian dollars)

 (Reporting by Rajasik Mukherjee; Editing by Subhranshu Sahu)

 ((Rajasik.Mukherjee@thomsonreuters.com;))