Canberra has invested an additional $200m in Arafura Rare Earths

The federal government has doubled down on its support for a new Central Australian mine with a huge cash commitment. Read how much.

The Federal Labor Government has committed another $200m to Central Australia’s Arafura Rare Earths project.

Ten months since a massive $840m debt injection by the Commonwealth into the long-anticipated rare earths project, the Albanese Government will invest $200m from the National Reconstruction Fund Corporation to help secure private equity into the project.

It brings the total sum invested by the Commonwealth in the Arafura Rare Earth project to $1.24bn.

Industry and Science Minister Ed Husic said the Commonwealth’s contribution was a “cornerstone investment”, that would enable the company to press ahead with raising the funding required to commence development of the new mine and processing facility at Nolans, 135km north of Alice Springs.

Industry and Science Minister, Ed Husic. Picture: NewsWire / Martin Ollman

The facility will create 600 jobs during the construction phase with 350 ongoing jobs once mining and refining operations are underway.

In an interview last month, Arafura Rare Earths chief executive Darryl Cuzzubbo told this masthead the company was in the process of locking in cornerstone investors before taking the project to market.

With the Chinese having cornered global rare earths markets with 84 per cent of international supply in 2022, the Commonwealth government’s investment is intended to fill a financing void while worldwide rare earths markets are restructured.

He outlined a medium-term strategy where non-Chinese rare earths players including Australia, USA, Malaysia, Vietnam and India combine to target breaking China’s grip on global supply by 2030.

“It’s a thin market so they’re subject to manipulation from elsewhere,” Mr Cuzzubbo said.

“What we’re trying to do here is build a national capacity under repayable loans that go back to the government and in the meantime act in the national interest, but also create jobs and create further capacity.”

Arafura Rare Earths chief executive Darryl Cuzzubbo.

Mr Husic said the Commonwealth’s $15bn National Reconstruction Fund was building Australia’s future.

“This investment will create a sovereign supply of these critical minerals, mined and refined onshore, as well as new export opportunities,” he said.

“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.”

Rare earth minerals are essential for the manufacture of magnets for use in products such as mobile phones, wind turbines, electric vehicles and defence equipment.

Demand for processed rare earth minerals is expected to double by 2030, with the current market currently dominated by China.

The Arafura mine and processing plant will produce around 4440 tonnes of neodymium and praseodymium (NdPr) – which will account for around four per cent of global demand from 2032.

Mr Husic said as well as being the first of its kind in Australia and one of the largest in the world, the Arafura Rare Earths mine would be a game changer for the Northern Territory.

He said the NRFC commitment builds on the combined $840m funding from the Critical Minerals Facility and the northern Australia Infrastructure Facility.

Since November, the NRFC has announced more than $360 million in funding commitments as part of a strong pipeline of investments.

The Arafura Rare Earth investment is the single largest NRFC investment to date.