Arafura Rare Earths pushed ahead with engineering work and construction of its giant Nolans rare earths project in the Northern Territory in the latest quarter despite a softening market for the critical metals.
The neodymium and praseodymium (NdPr) price declined 17 percent during the quarter from US$76 per kg to $63 due to demand weakness for sintered magnets for industrial use, along with a macro-economic slowdown in China.
The Chinese electric vehicle market remains robust with China unveiling a $72 billion package of tax breaks over four years for new energy vehicle uptake.
The Nolans Project encompasses a mine, process plant comprising beneficiation, extraction and separation plants and related infrastructure now under construction 135 kilometres north of Alice Springs.
The project will produce fertiliser-grade (54 percent) phosphoric acid each year as a by-product and 4,440 tonnes per annum of NdPr oxide and 470 tonnes of a mixed middle-heavy rare earth (SEG/HRE) oxide – making it one of the largest producers globally.
During the quarter engineering and construction work progressed on a hydrometallurgical plant, suplphuric acid plant, beneficiation plant, power station and non process infrastructure including accommodation camp (pictured).
Value engineering of the hydrometallurgical plant reduced piping costs, reduced water usage and hydrochloric storage volumes, rationalised equipment related to cerium extraction and rationslised the use of structural steel.
Sulphuric plant supplier Chemetics has begun preliminary engineering, MACA Interquip was selected for engineering and construction of the beneficiation plant and Arafura entered into an agreement with General Electric Company for the supply of a cogeneration power plant.
According to Arafura: “The key factor impacting the execution schedule remains project funding progress.
“…The company continues to target finalisation of its project funding activities in the second half of 2023.”
In the latest quarter an initial $6 million was received of a $30 million federal government Modern Manufacturing Initiative grant.
Arafura also received a letter of interest from Canadian export agency Export Development Canada for the provision of up to US$300 million in debt financing.
Nolans has support from the Northern Australia Infrastructure Facility of $150 million and in principle support for a loan guarantee of up to US$600 million from German export credit agency Euler Hermes.
Arafura has a binding offtake agreement with wind turbine manufacturer Siemens Gamesa Renewable Energy to supply rare earth metals NdPr which are key to the manufacture of permanent magnets.
Nolans has the potential to supply 10 percent of the world’s demand for the metals used in rare earths magnets.
Arafura gets debt backing for Nolan rare earths project