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Arafura on the road to locking in rare earth supply deals

Arafura is well on its way to securing offtake deals for Nolans. Pic: Mad Max, Roadshow Film Distributors/Warner Bros.

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Special Report: Arafura is satisfying customers that its rare earths products are the goods, paving the way for the company to start locking in supply deals. 

Customers in Europe, China and Japan have all confirmed that Arafura Resources’ (ASX:ARU) final rare earth oxide products from its Nolans project in the Northern Territory are within their specifications.

This is an important milestone for the company because it means Arafura can now kick off commercial negotiations with customers.

It also marks the successful completion of Arafura’s comprehensive flowsheet piloting program.

Investors liked the news, edging shares up as much as 9 per cent to an intra-day peak of 8.4c.

 

Arafura Resources (ASX:ARU) share price chart:

 

 

Arafura proved it was able to produce neodymium-praseodymium (NdPr) oxide, SEG-HRE (middle and heavy rare earth) oxide and cerium oxide products that met rare earth oxide (REO) and total rare earth oxide specifications of between >99.5 per cent and >99.9 per cent.

Rare earth product samples from Nolans. Pic: Supplied

“We trust that providing high quality samples will assist in formalising offtake agreements with potential customers,” managing director Gavin Lockyer said.

Arafura sent samples of NdPr oxide to key partners within the metal, alloying and neodymium iron boron (NdFeB) magnet manufacturing supply chain in Europe, China and Japan.

These customers undertook independent chemical analysis and testing to confirm the product complied with the tight quality specifications mandated by end user customers in the automotive, wind energy, acoustics and personal electronics sectors.

Chemical analysis of the SEG-HRE oxide product was reviewed by a Japanese trading house involved in the rare earth industry.

Arafura is also continuing talks with USA Rare Earth LLC around the potential use of a couple of other valuable rare earths — dysprosium and terbium — in NdFeB magnets.

The company, meanwhile, stepped its cerium product up a notch from what it was advancing in the definitive feasibility study.

Instead of producing a lower value cerium hydroxide product, Arafura delivered a more marketable, higher purity cerium oxide product that has now been tested by leading users in Europe and China.

Arafura said in all cases, its supply chain partners confirmed its products met the required specifications for use in their operations.

The company also confirmed that a phosphoric acid product from flowsheet piloting had successfully passed a quality compliance assessment by an integrated fertiliser producer in India with which an offtake memorandum of understanding had been signed.

 

The ESG and downstream advantage

“Many customers are becoming more active in assessing the ESG (Environmental, Social and Governance) aspects of their supply chains and Arafura is able to provide certainty in this regard, including the responsible management of all process waste residues at site,” Lockyer said.

When in production, Nolans will be the only Australian-domiciled NdPr-focused project that mines and processes rare earths ore through to highly refined separated REO products.

Arafura says the value proposition for end user customers in downstream advanced manufacturing is a safe, secure, transparent, commercially competitive, long-life upstream critical minerals supply chain.

The Nolans project has also been recognised as a project of strategic importance, with the Australian government assigning it “Major Project Status”.

This provides a single point of entry for a range of Australian Government coordination services such as assistance with mapping out its commercial compliance obligations and suitable employment and training programs.

Nolans has a 33-year mine life on a reserve of 29.5 million tonnes grading 2.9 per cent total rare earth oxides. High demand and valuable NdPr makes up 26.4 per cent of the rare earths content.

NdPr is used in the manufacture of neodymium-iron-boron permanent magnets that are used in practically all offshore wind power turbines and are also common in the motors of electric vehicles.

 

This article was developed in collaboration with Arafura Resources, 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.

 

Categories: Mining

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