Arafura pursues FID on Nolans project

Arafura Rare Earths remains confident of achieving a final investment decision for its Northern Territory-based Nolans project by the end of this year. 

Last month, the Darryl Cuzzubbo-led company told the market it had received a $840 million finance package from the federal government, with the construction cost of Nolans tipped to reach $1.6 billion.

Given it is now shovel ready, construction would be able to begin following a positive FID. 

"We are executing our equity strategy with energy and conviction whilst remaining focused on identifying quality investment for Arafura’s long-term success," Mr Cuzzubbo said.

"I look forward to updating the market when we reach equity milestones in the coming months and I am very pleased with how our plans are unfolding.

"The strong relationships we have developed puts us in good stead to prioritise quality customer and industry cornerstone investment. We have also started a scoping study for what Nolans phase 2 would look like and I look forward to sharing more on this initiative over coming months."

The ASX-listed company also provided insight into its desire to become one of the largest producers of neodymium and praseodymium oxide outside of China.

“A key point that we’ve been eager to explain to investors, is that NdPr pricing is elastic,” Mr Cuzzubbo said.

“That is, as we move into a structural – and hence extended supply deficit – we should expect NdPr to demonstrate significant upside, as we’ve seen in the recent past.

“We want to get ourselves into production to help address this supply deficit, but also to benefit from the structural supply deficit.

“The biggest driver for future NdPr demand is electric vehicles.”

Mr Cuzzubbo said Arafura, which counts Western Australia's richest person Gina Rinehart as one of its shareholders, could play a major role moving forward in the sector, given the growing need for the commodity.

“If you are a US, Korean or European car and wind turbine manufacturer, you are heavily dependent on the supply from China – which will inherently and naturally look after their growing domestic market first.

“Arafura represents the opportunity for other countries and related companies to do the same as what the Japanese so wisely did a decade ago with Lynas Rare Earths.”

At the close of trade, Arafura shares were 19 cents, up 3 per cent.