() is focused on securing its final investment decision for its Nolans Neodymium Praseodymium Oxide (LoE) project in the Northern Territory in mid-2022.

The company is “very optimistic” that the year ahead for the Nolans project to be fully funded and ready to go into production as the global economy desperately needs a secure and alternative supply of its essential minerals.

It is “exceptionally well positioned” to take advantage of the ever-increasing global demand due to the strengthening of NdPr prices and the expected shortage of the product.

President Mark Southey said: “With a strong project economy, guaranteed development right and our social license to operate, we have never been better placed to execute the Nolans project.

Critical year for Arafura

“Fiscal year 2021 has been a critical year for Arafura. With the strengthening of rare earth pricing and increased interest from financiers and potential off-take partners, as well as optimization of processing plant design and mine planning following commissioning. updated ore reserves, there were good reasons to review the conclusions of the final feasibility study delivered in 2019.

“With extremely positive results, confirming the financial viability of the Nolans project, this has enabled us to prepare for the front-end engineering and design (FEED), a critical step in advancing the commercialization of the Nolans NdPr project towards direct debit and the financing of the project.

“As the world focuses on ESG, Arafura has set itself the goal of ‘being a trusted global leader and supplier of choice for sustainably mined rare earth products’, helping our customers to provide clean and efficient technologies.

“Arafura is committed to achieving zero net carbon emissions by 2050, with its study of greenhouse gas reduction options well advanced to set interim targets to achieve this goal.”

Progress of withdrawals

Arafura continues to advance its rare earth products off-take agreements with parties in Japan, Europe, South Korea, the United States and for its phosphoric acid product with parties in India.

Commercial discussions to secure direct debit agreements with European partners, who are looking for alternative sources of supply from transparent suppliers that comply with ESG standards, are all progressing positively.

With changes in global sustainability and ESG priorities, Nolan’s strong alignment with the sustainability goals responds to the changing mandates of key end users.

In fact, it is starting to become evident that Nolan is emerging as the supplier of choice to secure the supply of NdPr oxides from a sustainable extraction and processing source from Australia.

Arafura Managing Director Gavin Lockyer said: “We continue to advance discussions on key terms with various European end users in the automotive and wind industry,

“The immediate objectives of European customers are to establish security of supply and jurisdictional diversification of the supply chain for NdFeB magnets and traceable products from a sustainable extraction and processing source. “

Project update

Supply chain partners in Europe, China and Japan have confirmed that the product meets key specifications required for use in their processes.

The update of the feasibility study follows extensive work by the Arafura team and confirmed ultra-low operating costs of 24.76 USD / kg of NdPr oxide and financial measures robust for the Nolans project, showing an exceptional net present value (NPV) of $ 1.4 billion and an average EBITDA of A $ 354 million per year.

It incorporates key improvements after the completion of the pilot program, making it possible to refine or optimize elements of the process map.

With the expected supply shortage, the company revised the design of the processing plant and deferred cerium production to allow the company to focus on accelerating the production of high-value NdPr in line with the requirements. specifications.

To optimize the production profile and economic results at Nolans, an updated mine schedule was used based on updated ore reserves and also includes an associated minor increase in concentrate processing capacity.

These now form the basis of all its discussions with potential funders and direct debit partners.

Internal support

Increased support from the Australian government was seen with non-binding letters of support from Export Finance Australia and the Northern Australia Infrastructure Facility for senior debt facilities of $ 200 million and $ 100 million respectively, both for a period of 15 years each.

“With the sovereign support now secured, we will continue to engage with leading banks, export credit advisers and agencies (ECAs) to execute our debt-driven strategy from ECA-backed debt to ‘attract project equity,’ added Southey.

Secure approvals

All ancillary mining leases to house the Nolans drilling field in support of the mine and processing plant and allowing the construction of a water diversion channel have been granted.

Having already obtained federal and state environmental approvals, Nolans remains the only ore project fully licensed to oxidize rare earths in Australia.

With the renewal of Major Project status by the Australian Government for a further three years, Arafura enjoys the continued and targeted support of the Australian Government’s Major Projects Facilitation Agency (MPFA), with Nolans being recognized as an economically and strategically important asset. for Australia.

Coupled with the Indigenous engagement strategy published the previous year, it continues to make firm commitments to the local community and, as such, retains its social license to operate.

Cash position

Arafura had a strong cash position of $ 10.8 million at the end of June 2021.

In addition, its two-tranche investment and share purchase plan will raise AU $ 45.5 million to begin its FEED and for general working capital purposes.

Tranches 1 and 2 have already settled to raise $ 40 million before fees and following high shareholder interest and participation, the SPP was closed early and is expected to settle on August 20, 2021 to raise 5.5. millions of dollars before fees.

NdPr Market

Demand for NdPr has grown more than expected, with supply tightening globally driven by the need for global powers to secure their supply chains for critical materials that are both sustainable and traceable.

In addition, rare earths continue to be recognized as a priority in the accelerated electrification of transport and transitions to renewable energies to achieve the ambitious climate goals that many countries are adopting and putting into their policies.

With market analysts predicting NdPr oxide demand to grow to 98,000 tonnes by 2030, Arafura is well positioned to fill the potential supply gap by supplying up to 10% of the world’s supply of earth magnets. rare from the Nolans project.

NdPr oxide prices firmed throughout the year, increasing 78% overall, and are expected to continue to strengthen throughout the year.