Arafura Rare Earths final investment decision tipped for first half of 2025

As Christmas nears, so too does the green light for a long-awaited NT major project. Read what it is.

Arafura Rare Earths Limited chief executive Darryl Cuzzubbo has forecast project final investment decision for the first half of 2025.

On the developmental drawing board since the mid-2010s, the Arafura project was in March given federal government loans totalling $840m, which provided a basis for cornerstone debt of more than a billion US dollars to the project.

The search for equity financing has continued in parallel, with Mr Cuzzubbo confident the last pieces in Arafura’s financing puzzle will be locked in by July.

“There is one stop to go to call final investment decision, which is securing equity and that is tracking to plan,” Mr Cuzzubbo said.

“We’re focused on getting our cornerstones locked in before going to the general market, and we expect to complete that by the first half of next year.

Arafura Rare Earths boss Darryl Cuzzubbo.

“The offer includes the current shareholders, it includes government seeded funds that have been set up to support critical minerals projects in Australia, and like-minded countries that wanted diversified supply chains for critical minerals including offtakes and potentially private equity firms.”

The $840m will be funded through multiple streams including the northern Australia Infrastructure Facility, Export Finance Australia and the Critical Minerals Facility.

The project has been constrained in part by Chinese domination of the rare earths industry, which accounted for 84 per cent of global supply in 2022.

Arafrua’s medium-term strategy is for non-Chinese rare earth players including the USA, Malaysia, Vietnam and India to break China’s grip on the global supply by 2030.

“The main way China influences the sector and hence us is in how they set their production quotas, which they typically do twice a year,” Mr Cuzzubbo said.

“Last year they did it three times and that essentially indirectly set the price given that they control nearly 90 per cent of the NDPR.

“That’s why it’s important going forward that we as a sector establish a pricing index that’s not controlled by Chinese domestic production.

Workers camp is ready to go at Arafura Rare Earth’s Nolans project.

“The pathway to do that is to establish an NDPR index that excludes China’s domestic production and we need to be able to put volumes on that. We’re only locking in 80 per cent of our offtakes and the conversations we’re having with parties at the moment gives us flexibility for the remaining 20 per cent of offtakes to be put it on this new index.”

Arafura’s confidence in the project remains despite the long delays, with tens-of-millions of infrastructure dollars spent at the Nolan’s site, about 135km north of Alice Springs.

As well as camp facilities for 250 people, there is 10km of roadway access and 26km of water pipelines already constructed.

Following FID, construction should take three years with two additional years of firming production as the site ramps up.

Up to 680 people could be employed during the construction phase.

While many, including the Territory and federal governments, see Arafura as an economic salve for Central Australia, Mr Cuzzobbo warned against taking the benefits for granted.

Formerly boss at Olympic Dam in South Australia, he saw first hand the benefits remote projects can deliver to communities.

“At Olympic Dam, investment in building Indigenous capability and Indigenous employment brought benefits to Olympic Dam but also into young Indigenous families and to creating employment pathways that previously hadn’t existed.

“This doesn’t just happen, right. It really requires all parties to work together and requires the local community to work with the business in building up the capability.

“It requires different levels of government to provide support whether it’s through TAFE or university to build up that capability. So for me it’s a positive to have everyone aligned with the local community, Traditional Owners and different levels of government towards a long-term strategy.

“Aligning all of those interests can be tricky but the impact of doing so is profound.”