Arafura Rare Earths shares jump on National Reconstruction Fund backing
Make us a preferred source
Make us a preferred source on Google
More news: Shares in Arafura Rare Earths rocketed in early trading on the ASX, after the federal government's National Reconstruction Fund Corporation committed to a $200 million cornerstone investment in the Gina Rinehart-backed miner.
Arafura shares were up 26.1% to 14.5 cents by 10:30am AEDT.
The investment, which marks the fund's largest commitment to date, will support the development of Arafura's Nolans Project in the Northern Territory, with ambitions to produce around 4% of the world's neodymium and praseodymium (NdPr) demand from 2032.
What they said: Minister for science and industry, Ed Husic, said: "This investment will create a sovereign supply of these critical minerals, mined and refined onshore, as well as new export opportunities.
"And it means hundreds of secure, well-paid jobs for central Australia, including significant economic opportunity for First Nations communities.
"We’re backing in our strength in mining, while helping lower emissions and bolstering our supply chains."
National Reconstruction Fund commits $200m to Rinehart-backed Arafura
The news: The Albanese government's National Reconstruction Fund Corporation (NRFC) has agreed to a $200 million cornerstone investment in Gina Rinehart-backed miner Arafura Rare Earths, marking the fund's largest commitment to date.
The numbers: The commitment will help Perth-based Arafura to fund the development of its Nolans Project, located 135km north of Alice Springs in the Northern Territory.
The project is expected to produce around 4% of the world's neodymium and praseodymium (NdPr) demand from 2032. It includes the construction of a mine processing plant and related infrastructure that will produce 4,440 tonnes of NdPr oxide per year over its proposed 38-year lifespan.
It is anticipated to create more than 600 jobs during the construction phase and over 350 jobs during steady-state operations.
The context: The NRFC's investment commitment in Arafura is part of a broader capital raise by the company, as it looks for further funding to progress the Nolans Project to development stage.
Neodymium and praseodymium are seen as critical to the global transition to net zero. The minerals are key inputs for the industrial magnets used in the manufacturing of electric vehicles and wind turbines.
Gina Rinehart's mining group Hancock Prospecting is Arafura's largest shareholder, with an 8.6% stake.
The NRFC's $15 billion investment mandate includes renewables and low-emission technologies, medical manufacturing, critical technologies, and value-adding in agriculture and resources.
What they said: "Rare earth minerals are strategically important resources that are crucial to modern economics and the global transition to net zero," said NRFC chair Martijn Wilder.
"Arafura's Nolans Project demonstrates the enormous contribution that Australia can make to the global supply of rare earth minerals and the considerable opportunities for Australia to add value to the raw materials that it mines."
Arafura managing director and CEO Darryl Cuzzubbo said: "An investment of this significance by the NRFC highlights the importance of Arafura and the Nolans Project to Australian rare earths downstream processing capabilities and building resilience in a global supply chain."
The source: NRFC media release
