Arafura secures processing plant site

Perth-based Arafura Resources has secured a site for processing plant for its Nolan's rare earths project, with the purchase of 800 hectares of land at Whyalla in South Australia from OneSteel.

Terms of the contract include easements for the location of infrastructure, and settlement is subject to final approval of the change in ownership by local government agencies.

Commercial terms were not disclosed.

Arafura managing director Steve Ward said the signing was an important milestone in the company's development of the Nolan's rare earths project.

"Whyalla is a key part of Arafura's business model which is to add value to resources in Australia and produce rare earth oxides for users worldwide using production processes developed in Australia," Mr Ward said in a statement released today.

Mr Ward said the Whyalla site had the characteristics necessary for the development and operation of a substantial minerals processing and chemical facility, such as availability of services, close proximity to transport infrastructure, and access to a skilled workforce.

"The Whyalla community and the South Australian and Northern Territory governments have been very supportive of our plans to deliver a project that will place Australia well and truly on the global rare earths industry map," Mr Ward said.

Arafura's Nolan's rare earths project is considered to be one of the world's largest undeveloped rarer earths deposits.

The company is aiming to begin production from 2013.

At 11:37AM (WST) Arafura's stock was up 4.8 per cent at 76.5 cents.