NT’s Arafura Rare Earths signs $300M deal with Canadian government

Territory start-up Arafura Rare Earths has used its connections with a giant US corporation to link up with the Canadian government. Read how the deal went down.

Territory start-up Arafura Rare Earths has strengthened ties with American manufacturing giant General Electric while forging new links with a Canadian government agency.

Arafura announced via the Australian Stock Exchange last Tuesday it had received in-principle support for up to $300m of debt financing from export credit agency Export Development Canada.

Arafura is in the process of seeking to secure international investment in its Nolans rare earths project in Central Australia.

EDC has an existing arrangement with General Electric to advance the American company’s energy transition.

And in July 2022, Arafura and General Electric signed a memorandum of understanding to supply rare earth elements neodymium and praseodymium from Nolans for use in the manufacture of permanent magnets used in offshore wind turbines.

Arafura’s ASX statement said General Electric had linked Arafura with EDC through its existing support for the Nolans project.

Arafura Resources Nolans Project

Arafura and General Electric are negotiating a long term sales agreement.

General Electric is also working with Arafura to supply power plant technology including a gas turbine and associated equipment to Nolan’s to provide power and heat for its processing facility.

Arafura is aiming to achieve a 50 per cent reduction in emissions from electricity generation by 2030 through the introduction of renewable technology including wind.

Arafura managing director Gavin Lockyer said the interest from EDC showed the broad appeal of the Nolans project.

“We are delighted to receive indicative support from Export Development Canada for the Nolans Project,” he said.

Arafura Managing Director Gavin Lockyer after the NT government announced approval for the Arafura Nolans Project at the NT News' inaugural Future Northern Territory lunch. Picture: (A) manda Parkinson

“This is further demonstration of the strategic significance that international governments place on the project and its capacity to provide a sustainable supply of critical NdPr to meet the needs of major businesses in key global jurisdictions.

“We are proud to include GE among the tier-one original equipment manufacturers associated with offtake from Nolans, and welcome GE’s provision of its aero power generation technology for the project.”

The EDC announcement is in line with Arafura’s debt-led funding strategy for Nolans. It follows the company’s receipt of in-principle letters of support from Germany’s Euler Hermes for up to US$600m in untied loan guarantees in relation to offtake by German companies and up to a combined A$350 million from Export Finance Australia and the Northern Australia Infrastructure Facility.

An announcement on final investment decision for the Arafura project is expected later this year.