Territory prospect Arafura Rare Earths hits key debt milestone

A prospective Territory mine has flagged a major new milestone and further expansion plans. Read what they’ve achieved.

Prospective Territory miner Arafura Rare Earths Limited has announced it has reached a crucial milestone towards a final investment decision on its Central Australian Nolans Project.

The company announced via the ASX this morning it had secured US$775m in debt funding from export credit agencies and commercial lenders.

The debt package totals more than US$1bn including project completion support provided by a US$80m cost overrun facility and a standby liquidity facility of US$200m.

The statement said it had significant support from Australian and international export credit agencies and commercial lenders which highlighted “the geostrategic importance of developing a diversified global NdPr supply chain”.

In March the federal government announced it would provide $840m in loans to the project including $200m from the Northern Australia Infrastructure Fund, $495m from the Critical Minerals Facility, $115m from Export Finance Australia and $30m in government grants.

Arafura Rare Earths Nolans project’s construction site.

The statement said this funding was the “catalyst to unlock direct lending and untied loan guarantee commitments from Canadian, Korean and German export credit agencies”.

“This is a pivotal milestone for the company as it paves the way for securing the strategic equity funding required for FID.

“These commitments highlight the strategic value in developing Australian downstream rare earths processing capability and a diversified NdPr global supply chain to meet forecast growth in demand for electric vehicles and wind turbines,” the statement said.

In other news, the company also flagged expanding the size of the planned processing facility at Nolans.

Arafura Rare Earths chief executive Darryl Cuzzubbo. Picture: Pema Tamang Pakhrin

A preliminary study explored whether Arafura could significantly expand the size of the planned processing facility by 150 per cent, its impact on the mine life and whether the potential expansion would enable the company to process third-party rare earths feedstock.

The study paved the way for the company to commence the process of obtaining government and regulatory approvals for a phase two expansion into the future.

Arafura managing director Darryl Cuzzubbo said the securing the additional debt funding reinforced the value of Nolans in diversifying a global NdPr supply chain.

“The Australian government has led the way in debt funding through EFA and NAIF, which unlocked international support from export credit agencies in Korea, Canada and Germany,” Mr Cuzzubbo said.

“The cost overrun facility and standby liquidity facility have further de-risked the project for commercial lenders and investors. The significant support we have received from our commercial lenders, both domestic and international, reinforces the role of Nolans in a globally diversified rare earth supply chain.

“We continue to make monumental leaps toward reaching FID at Nolans, and today is a very significant milestone. Our next major milestone is securing equity funding and reaching FID at Nolans in 2024.”