Arafura Set a Second Supply Deal for Nolan’s REEs

11 April 2023 15:24

Arafura Resources’ Nolan’s project continues to cement itself as a leader in Australian rare earth, locking in yet another supply deal from the project’s high-grade NdPr, this time with German wind turbine manufacturer Siemens Gamesa.

The new deal comes two weeks after Arafura received a non-binding letter of in-principle support from German export credit agency Euler Hermes Aktiengesellschaft for an untied loan guarantee of up to US$600 million to support the emerging project.

The contract will consist of a five-year term (with the option to extend a further two years by mutual agreement) commencing in 2026 with a supply of 200 tonnes per annum and ramping up alongside the project to 400tp by year three when Nolans reaches its nameplate production capacity of 4,440 tonnes per annum of NdPr oxide.

This is the second offtake agreement Arafura has signed for Nolans, with 53 per cent of the projects targeted 85 per cent of annual production secured for long-term sale, with the first supply deal being signed with automotive giants Hyundai and Kia for minerals critical to the company’s electric vehicle ambitions.

As Nolan’s international profile continues to grow, it is becoming a bigger and bigger name in Australian rare earths, with a number of smaller explorers staking claims around the 52mt TREO discovery in the hopes of emulating its success.

Nolan’s continued international success should be exciting for First Development Resources, whose flagship Selta project is located just 70km away, with early exploration showing that underlying geology could be comparable with Nolan’s mineralisation that is hosted within the types of granite prevalent across Selta.

It should also provide another shot in the arm for Canadian-based neighbour Megawatt who has been closing in on REE mineralisation under 20km away from Nolans bore at its flagship Arctic Fox project, where a recent sampling program showed grades up to 2160 parts per million total rare earth oxides alongside results that indicated more rare earth zones.

The company said the new offtake Agreement will support ongoing discussions with German ECA Euler Hermes.

“We are delighted to have concluded negotiations for our second offtake agreement. Siemens Gamesa is the world’s leading manufacturer of offshore wind turbines, and this agreement complements our strategy to create supply diversification into the renewable & E-mobility sectors,” Managing Director Gavin Lockyer said.

ARU’s Australian Stock Exchange-listed share price has risen 6.06 per cent today, currently selling at 49c (2:49 pm UTC+ 8 hours).

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