Chinese opt out of Arafura raising

Arafura Resources' plans to raise $90 million via a share placement to progress its Nolans project north of Alice Springs have suffered a blow after East China Exploration and Development Bureau declined an offer to acquire shares in the placement.

The decision means ECE's shareholding in Arafura will fall from 22.17 per cent to 17.59 per cent.

Arafura announced the capital raising on October 29 and said there was significant support for the placement, which had enabled sufficient funds to be raised to progress the project through the financing stage and maintain plans for first production in 2013.

The placement of 75 million shares at $1.20 each will be made via two tranches.

The placement is being jointly managed by BBY and Bell Potter Securities.