New funding takes public investment in NT rare earths mine past $1b

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A federal government body will invest a further $200 million in developing a Northern Territory rare earths mine and processing facility, bringing total public funding commitments for the project to more than $1 billion.

The National Reconstruction Fund Corporation (NRFC) will make the equity investment in Arafura Rare Earths’ Nolans Project, which aims to produce neodymium and praseodymium at its proposed mine, 125 kilometres north of Alice Springs.

The NRFC investment comes on top of an $840 million loans and grants package for the Gina Rinehart-backed project announced by the federal government in March last year.

NRFC chair Martijn Wilder said the money would go towards helping Arafura build its rare earths refining capacity and infrastructure.

“It is the nation’s first ore-to-oxide rare earths processing operation,” he said.

“Australia is very good at mining, we also have a lot of critical minerals projects around the country, but this project is really important because it is actually a minerals processing operation.

Arafura Rare Earths has built an accommodation village for workers at the Nolans Project site. (Supplied: Arafura Rare Earths)

“Arafura’s Nolans Project demonstrates the enormous contribution that Australia can make to the global supply of rare earth minerals and the considerable opportunities for Australia to add value to the raw materials that it mines.”

Minerals from the mine will be used by magnet manufacturers in electric vehicles and renewable energy infrastructure, with Arafura already signing supply agreements with South Korean car manufacturers Hyundai and Kia.

The Nolans Project is expected to produce about four per cent of the world’s demand for neodymium and praseodymium, according to Arafura.

white ev charging plug plugged into grey ev with the charger in the background

Rare earths from the Nolans Project will be used in electric vehicles and renewable energy manufacturing. (Supplied: Kia)

The company’s chief executive Darryl Cuzzubbo said the NRFC investment was a “significant milestone” for the project.

“The investment commitment, which is subject to satisfaction of conditions precedent, will provide a catalyst for the remaining funding required for the Nolans Project to reach development stage,” he said.

Ms Rinehart’s company Hancock Prospecting owns a 10 per cent stake in Arafura, according to its 2024 annual report.

Australian taxpayers to own part of Nolans Project

The NRFC’s investment in the Nolans Project is the largest commitment to date from its $15 billion fund, which was created in 2023 to improve Australia’s manufacturing capability.

Mr Wilder said the funding was “an investment for taxpayers who will receive a return on that investment and Australians will own part of the project”.

“The challenge that we have in a project of this nature — which is transformational to the national economy, a greenfields development project and the first of its kind for Australia at a significant scale — is that many investors don’t want to take the risk at this stage of the process,” he said.

“The government investment will help catalyse private sector investment to come into the project.”

an aerial photo of a mining site.

Arafura Rare Earths’ Nolans Project is expected to create more than 600 jobs during construction and about 350 ongoing jobs. (Supplied: Arafura Rare Earths)

Arafura has secured more than US$1 billion in debt commitments, including from Canadian and South Korean export agencies.

The company is expecting to make a final investment decision in the first half of 2025.

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