Arafura Rare Earths is preparing for the start of construction at its Nolans rare earths project, awarding a contract for a key part of its processing infrastructure.

The next major neodymium and praseodymium miner, Arafura Rare Earths (ASX:ARU) has picked up a head of steam in recent months on the way to a final investment decision on the NT mine.

Expected to produce 4325t of NdPr oxide per annum over four decades, Nolans has emerged as a key asset as electric vehicle and renewable makers look for sources of magnet rare earths outside the dominant Chinese market.

The award of a contract to Worley subsidiary Chemetics to supply a sulphuric acid plant for Nolans has taken it a step closer to reality, which will use Worley’s proprietary CORE-SO2 process.

That means it will be delivered at a significantly lower capital cost and sulphur dioxide emissions than conventional sulphuric acid plants.

The smaller size of the plant will also reduce the requirement for site installation labour, reducing risks posed by labour shortages in Australia’s mining, engineering and construction sectors.

“Letting the contract for the supply of the acid plant to a global supplier such as Chemetics provides confidence around the outcomes for the Project when the team reaches commissioning,” Arafura General Manager – Projects, Stewart Watkins said.

The lower SO2 emissions intensity of the Chemetics plant fits with Arafura’s strong ESG platform.

Arafura has already signposted its green credentials, announcing a plan to hit net zero by 2050, with 50% of its electricity generation to come from renewables by 2030 and a plan to transition to renewable fuels for firming power from 2040.

It comes off a wave of positive news about the development, including a $121 million capital raising last year that brought Australia’s richest person Gina Rinehart onto Arafura’s register as a 10% shareholder and a major offtake deal with car giants Kia and Hyundai.

Early works in the coming weeks

More long lead orders are expected to take place soon, paving the way for early works to begin.

“Along with that, the progress made on the selection of our key vendors and placement of long lead orders means that we are set to commence early works construction in the coming weeks,” Watkins said.

Other orders for critical path infrastructure include orders for sulphation bake and cooler paddle dryers with ANDRITZ, pipe supply for the first 8km of HDPE piping the main water supply pipeline, essential for early construction to begin, potable and wastewater treatment plants for the Nolans construction camp, and equipment and tankage for temporary water supply ahead of the pipeline’s installation.

Arafura received mining authorisation from the NT Government in November 2022 to proceed with the Nolans project, with KfW IPEX-Bank last month appointed to the joint lead arranger group and lead for export credit agency funding for the mine.

Kia and Hyundai will take around 40% of the 85% production quota available under long term contracts from the first seven years of the mine’s operation, increasing from an initial 600tpa of NdPr up to 1500tpa after the mine is fully ramped up.

Supply of NdPr from Nolans is expected to begin from 2025, making Arafura one of a handful of suppliers of the key critical minerals outside China.




This article was developed in collaboration with Arafura Rare Earths, a Stockhead advertiser at the time of publishing.


This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.