Rinehart-backed Arafura proceeds with crucial flagship NT project

Arafura Rare Earths will construct its flagship project in the Northern Territory after agreeing to a government-backed offtake deal, locking in funding from Australia’s $1.2 billion critical minerals play aimed at loosening China’s stranglehold over the market.

The ASX-listed group – whose biggest investor is mining billionaire Gina Rinehart – said it had approved a final investment decision for its Nolans project near Alice Springs, which aims to supply 5 per cent of global rare earths demand.

The federal government has committed to buying 500 tonnes of rare earths from the project via its Critical Minerals Strategic Reserve, having taken a $140 million stake in Arafura as part of a $5 billion deal it sealed with the administration of US President Donald Trump last year.

Nolans is a key project in a broader campaign by Western governments to loosen China’s near-total dominance over the critical minerals market, which Beijing uses as geopolitical leverage against the likes of the US and Japan.

Construction of Nolans is expected to commence in September, with the first production anticipated to be in 2029.

“The Australian government has taken a decisive and proactive approach, developing an economic toolkit that supports the rare earths sector in the near term that will deliver independent and functional markets into the future,” said Darryl Cuzzubbo, Arafura’s chief executive and managing director.

“The achievement of a final investment decision reflects years of disciplined execution and partnership building. The offtake relationships we have established with Hyundai, Kia, Siemens Gamesa, Traxys and the various types of economic support provided by the Australian government are not transactional arrangements.

“They reflect a shared recognition that the diversification of global rare earth supply chains is an imperative, not merely an opportunity.”

The announcement comes days after Treasurer Jim Chalmers ordered six Chinese-linked investors in ASX-listed Northern Minerals to sell their holdings of the critical minerals company amid concerns of foreign influence over rare earths.

“Everyone benefits from stronger and more stable critical minerals supply chains, but especially Australia, and that’s what the Critical Minerals Reserve is all about,” Chalmers said of the Arafura offtake agreement.

Situated 135 kilometres north of Alice Springs, the project is poised to become Australia’s first ore-to-oxide rare earths facility, mining and processing neodymium-praseodymium oxide (NdPr).

The rare earth element is used in the production of high-tech magnets found in a multitude of modern items, such as wind turbines and electric vehicles. The government tipped that the project would create 600 construction jobs and 350 ongoing roles once operations commence.

Arafura has received $840 million in government loans and $200 million via the National Reconstruction Fund,

Arafura was also bolstered by an additional €50 million ($84 million) of backing from German state-owned development bank KFW.

Rinehart, Australia’s richest person, owns about 15 per cent of Arafura, which has already received $1.2 billion of taxpayer support.