Rinehart backs NT’s Arafura Resources project with $60m investment

Arafura Resources has received a considerable boost with a high-profile Australian investor getting behind the project. Find out what the high-flyer means for the NT.

Australia’s richest person has invested in Arafura Resources’ Territory-based rare earths Nolans Project.

Gina Rinehart’s Hancock Prospecting has invested $60m into the company which has embarked on a drive to raise funds months out from expected full project approval.

Arafura on Monday announced a $121m institutional placement and was also seeking to raise $12m in a share purchase plan.

The company said it received “exceptional support” for the placement from gold investors and existing shareholders it said demonstrated “an increasing awareness of the Nolans Project”.

About 135km north of Alice Springs, the Nolans Project contains all rare earths but predominantly Neodymium (Nd) and Praseodymium (Pr) – numbers 60 and 59 on the periodic table.

A statement lodged Monday morning with the ASX said the strong placement take-up indicated a shift in focus to the Nolans Project and the importance of NdPr to the supply chains essential to energy transition.

Arafura Resources managing director Gavin Lockyer and company champion and former NT general manager Brian Fowler. Picture: MICHAEL GOREY

The company intends to use funds raised for ordering “long lead items” commencement of fabrication in readiness for main plant construction and early works.

The fundraising “provides a pathway for ongoing engagement with strategic investors, offtake parties and debt finances through 2020”.

This includes commencement of early works construction including the accommodation village, project water supply and earthworks and ongoing financing activities.

It will allow Arafura to continue detailed design and tender activities to “advance the design and procurement of the Nolans Project across all areas” and support “ongoing marketing, sales negotiations in the US, Asia and Europe”.

Arafura chief executive Gavin Lockyer said the placement had helped bring the project closer.

“We are extremely pleased with the number of new and significant Australian and offshore institutional investors joining our register including Hancock Prospecting, a company well experienced in large project developments,” Mr Lockyer said.

“The widespread interest in this placement reflects the increasing global awareness of the importance of our NdPr oxide product with the supply chains essential to energy transition. “The Nolans Project is well positioned to become a groundbreaking strategic development for Australia with its single site ore-to-oxide business model.

“Nolans is important to all countries that are seeking diversified and robust critical material supply chains as they strive to achieve their net-zero emissions targets.”

Mr Lockyer said there was growing momentum behind the Nolans Project following the signing of a binding offtake agreement with Korean carmaker Hyundai and Kia last month.

“This funding will enable us to accelerate our development activities allowing commitment to long lead equipment and commencing on country earth works in preparation for our planned construction program.

NdPr is used in making magnets that help in the manufacture of phones and tables, wind turbines, robots, electric vehicles and MRI machines.

Having secured Hyundai for a binding offtake agreement, the company is negotiating with Japanese, European and United States corporations to surge additional purchasers.

The company expects it will make a financial investment decision on the project in March 2023 with construction commencing in April.

Financial close is expected to be secured by mid 2023 and mining should commence in early 2025.

Originally published as Rinehart backs NT’s Arafura Resources project with $60m investment