Australia's Arafura Rare Earths soars as government funding crosses A$1 billion

Arafura Rare Earths

15/01/2025 01:19

By Rajasik Mukherjee
       Jan 15 (Reuters) - Shares of Australia's Arafura Rare
Earths  ARU.AX  hit a more than two-month high on Wednesday,
after the miner received A$200 million ($123.72 million) funding
from the country's government, taking its total investment in
Arafura to over A$1 billion.   
    The stock gained as much as 30.4% to A$0.150, its highest
level since Nov. 6, and was set for its best trading session
since March 14, if current gains hold. 
    The investment from the incumbent government's National
Reconstruction Fund Corporation (NRFC) is aimed at aiding
Arafura in commencing the development of a new mine and
processing facility at its Nolans project, located at the north
of Alice Springs in central Australia, the company said. 
    The industry and science minister, Ed Husic, said the
proposed new facility would create 600 jobs during the
construction phase and 350 ongoing jobs once mining and refining
operations are running. 
    The investment comes as Australia and its allies diversify
the global supply chain for rare earths after COVID-19-related
snarls highlighted supply risks in China, which produces more
than 80% of the world's rare earths.
    Rare earths are used to make powerful magnets and are
essential for renewable energy and defence technologies.
Electric vehicle motors, wind turbines, robotics and mobile
phones all rely on rare earths.
    "Many nations restrict the sale of these commodities (rare
earths), providing both strategic and commercial drivers for the
Australian government's investment in Arafura," said Michael
McCarthy, chief commercial officer at online trading firm Moomoo
Australia.
    Early last year, the Anthony Albanese government announced
its plan to provide Arafura with A$840 million of funding to
build the country's first combined rare-earths mine and
refinery. 
    Mining magnate and Australia's richest person Gina Rinehart
is Arafura's controlling shareholder, with an 8.6% stake, LSEG
data showed. 
    

($1 = 1.6166 Australian dollars)

 (Reporting by Rajasik Mukherjee in Bengaluru; Editing by Rashmi
Aich)
 ((Rajasik.Mukherjee@thomsonreuters.com;))