Arafura continues to seek investment for Central Australia project expected to start next year

Arafura Resources’ billion-dollar rare earth project in Alice Springs is expected to start in 2023.

The ongoing quest for investment dollars will determine the future of Arafura Resources, a rare earth project.

Also known as the Nolans Bore project, the mine and processing plants are planned for construction about 135km north-west of Alice Springs.

The billion-dollar project holds the key to thousands of construction and operational jobs in the Territory and millions in taxes and royalties to Territory’s coffers.

Arafura Resources managing director Gavin Lockyer said in Darwin last week at the Resources Week conference that a final investment decision would be signed off by the end of the year and financial close reached sometime during 2023.

“We would like to be in full construction by around this time next year,” Mr Lockyer said.

The Nolans project first came to public conscientious in 2008 and has since had several redesigns and recalibrations, including relocation from the Top End to its present site in Central Australia.

When it was first flagged for construction on the Top End coastline, it came complete with its own small-scale nuclear reactor.

Mr Lockyer said he remained optimistic the project would go ahead despite the long delivery life.

“One of the reasons that global groups like General Electric and Hyundai have signed with Arafura for product is because of its location and its security of supply and the jurisdiction in which we operate,” he said.

“We’ve gone through a stringent environmental process and received our environmental approvals.

“We’ve received the approvals from our Traditional Owners and I think that’s a sign of the company and also a sign of the community in which we operate.”

Rare earths are key elements used in the automotive, consumer electronics, green energy, aerospace and healthcare sectors and are used in magnet production that support batteries, among other uses, in electric vehicles.

“Most forecasts state that we need 10 more Nolan’s Bore projects by 2030 to meet zero-emissions by 2050 and so this is a real opportunity for the Northern Territory and Arafura on the global scale,” Mr Lockyer said.

“They don’t come easily. Geologically they’re all unique and historically all the processing has been done in China. Arafura’s been 15 years in the making and that’s because we’ve had to do a lot of trial and error, a lot of research and development using groups like CSIRO.

“We would expect that down the track future projects might not have such a long lead time because of the work that we’ve done in the past.”

Securing finance in difficult times has been the project’s major challenge.

Over the years it has been confronted with the global financial crisis, economic recessions and a pandemic.

“This isn’t a small project. It’s one-point-something-billion dollars that we need to raise either via equity or through debt financing,” Mr Lockyer said.

“We’ve got good support from the federal government through its critical minerals strategy and we have up to $300m in debt earmarked from NAIF and Export finance Australia, which will certainly go a long way to help us bring it all together.

“The project’s really being held back just through its complexity in terms of the science itself. “We’ve gone out on a limb here. We’ve invested shareholders money, up to $300m to date that’s been raised through equity markets, and that’s all gone into research and development.

“We’ve extensively drilled out the project, up to 90km of drilling which is much more than a goldmine will do and that’s simply to understand the mineralogy and chemistry that’s behind it.”

Resources Minister Nicole Manison said Nolans was “ a major game-changing project for the Northern Territory.”