Arafura Rare Earths (ASX:ARU,OTC Pink:ARAFF) said on Tuesday (August 12) that Export Finance Australia (EFA) has provided it with a non-binding letter of interest regarding a potential investment in its Nolans project.
EFA doesn't specify the amount of funding, but Reuters reported that it is likely to be around AU$100 million.
The EFA investment is in addition to Arafura's AU$200 million in funding from the National Reconstruction Fund Corporation, announced in January. In addition, the federal government committed AU$840 million in March 2024.
Total public funding for the project now stands at AU$1 billion.
Nolans is regarded by Arafura as “the world’s most advanced ore-to-oxide rare earths project.” The company's aim is to support the development of secure and reliable supply chains with key international partners.
Arafura also notes that the development of Nolans aligns with the Australian government’s Critical Minerals Strategy, as well as the more recently announced G7 Critical Minerals Action Plan.
Located 135 kilometres north of Alice Springs in Australia's Northern Territory, Nolans is expected to account for about 4 percent of the world’s demand for neodymium and praseodymium (NdPr).
Arafura states on its website that Nolans is the only NdPr-focused project in Australia that has secured complete environmental permitting for mining, beneficiation, extraction and separation of rare earths.
“EFA’s investment consideration highlights the significance of the Nolans Project in nurturing the development of Australia’s nascent rare earths sector and unlocking the future potential of Australia’s north,” said Managing Director and CEO Darryl Cuzzubbo, adding that he sees an opportunity for Australia to become a global rare earths leader.
On July 8, Arafura provided an update on potential funding for Nolans from the German Raw Materials Fund, saying that the project has been referred to the fund for appraisal by Germany’s Interministerial Committee.
Arafura is seeking up to AU$175 million from the fund tied to supply from Nolans.
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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
