Arafura Resources Ltd awarded $30 million under the federal government’s Modern Manufacturing Initiative

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Nolans is Australia’s only shovel-ready neodymium-praseodymium (NdPr) project – a globally significant development with the potential to supply approximately 5% of world NdPr oxide demand.

Arafura Resources Ltd (ASX:ARU) has received $30 million under the federal government’s Modern Manufacturing Initiative and shares are trading higher.

The cash injection will support the rare earth element-focused discoverer and developer in the construction of the $90.8 million rare earth separation facility at its cornerstone Nolans project in the Northern Territory.

Nolans is Australia’s only shovel-ready neodymium-praseodymium (NdPr) project – a globally significant development with the potential to supply approximately 5% of world NdPr oxide demand.

Arafura leverages an Ore-to-Oxide business model, establishing downstream processing locally and enabling Australia to play a leading role in diversifying critical raw materials.

Broadly speaking, a vision for critical minerals underpins the government’s $1.3 billion Modern Manufacturing Initiative, a venture that is part of the resource technology and critical minerals processing roadmap that aims to make Australia one over the decade Develop epicenter for resource technology and critical minerals.

Exponential growth in the industry

“This grant is an exciting milestone for Arafura, which recognizes the strategic importance of the Nolans project and its place in the future of critical minerals processing in Australia,” said Arafura Managing Director Gavin Lockyer.

“Rare earths are critical to the manufacture of electric vehicles and wind turbines, with demand growth set to be exponential over the coming decades.

“Australia has an opportunity to invest in strategically important rare earth projects like Nolan’s and maximize the local jobs and investment benefits of the clean energy revolution.”

Shares rose as much as 23.1% on the day to A$0.24 with more than 32 million changing hands.

About Nolan’s

Nolans is located 135 kilometers north of Alice Springs and is expected to employ around 280 people in its operating crew.

The project’s separation plant will be the first of its kind in Australia and the second outside of China to produce separated rare earth oxides and enable the development of diversified rare earth supply chains.

Rare earth separation technology does not currently exist in Australia and Nolans offers the opportunity to develop a superior product that takes advantage of Australia’s mineral processing expertise.

Once the separation facility is operational, there is potential to explore other avenues, such as processing other rare earth-rich commodities at Nolans.

Arafura is targeting a final investment decision for Nolans in the second half of 2022, with detailed front-end engineering and design (FEED), acceptance and project financing activities ongoing.

Previous recommendations for Nolan

Today’s Modern Manufacturing Initiative grant builds on further broad support for Nolans from the Government of Australia, territories and export partners. These include:

  • Achieving major project status from the Northern Territory Government in 2020;
  • Securing non-binding letters of support from Export Finance Australia and Northern Australia Infrastructure Facility for US$200 million and US$100 million respectively in credit facilities;
  • Received written support from Minister for Trade, Tourism and Investment Dan Tehan MP and Minister for Resources, Water and Northern Australia Keith Pitt MP expressing Nolan’s alignment with the Government’s critical minerals targets; and
  • Signed a joint cooperation agreement with the Korean government agency KOMIR to facilitate Korean market access for Nolans products.
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