Arafura trims Nolans capital cost

Arafura Resources says it has found $500 million in capital expenditure savings at its Nolans rare earths project in the Northern Territory and is working towards trimming costs even further.

The Perth-based company has put the project's capital cost at $1.4 billion, down from the $1.9 billion base case figure it announced in August 2012.

The project's operating costs have meanwhile been cut from $20.55 per kilogram of rare earth oxides to $15.67/kg REO, based on annual equivalent production of 20,000 tonnes. 

This equates to annual operational savings of about $98 million.

Arafura said it had generated savings by relocating intermediate chemical processing from South Australia to the Nolans project site, while also relocating a planned rare earth separation plant to an as-yet unnamed international location.

It also identified what it described as material improvements in and simplication of the process configuration.

The company expects to unearth further savings through an optimisation program it is undertaking with Shanghai-based partner Shenghe Resources Holding Company, under which the Chinese company will review the Nolans definitive feasibility study and be given the opportunity to co-fund the project once the study is released.

Arafura shares closed the day's trade 3.5 per cent lower at 8.2 cents.