Arafura Rare Earths gets A$200m boost from Australia
Arafura Rare Earths will get A$200-million from Australia’s National Reconstruction Fund to support a new mine and processing facility, the latest move by Western nations to boost supply chains of critical resources amid a strategic contest with China.
Shares of Arafura surged as much as 30% shortly after opening in Sydney on Wednesday, following the announcement.
The investment is intended to assist the company develop the facility at the Nolans project site in Australia’s Northern Territory, Industry Minister Ed Husic said in a statement on Wednesday. The funding would help Arafura “create a sovereign supply of these critical minerals, mined and refined onshore, as well as new export opportunities,” he said.
The latest funding comes 10 months after the government announced Arafura would receive A$840-million to help create the nation’s first combined mine and refinery for rare earths. The Nolans neodymium-praseodymium open cut mine and associated processing project is 135 km north of Alice Springs and has an estimated mine life of around 40 years.
China dominates mining and production of rare earths, used in wind turbines to military hardware and electric vehicles, giving the nation a clout that’s long been seen as a geopolitical advantage. The US and allies including Australia are trying to challenge its stranglehold on the market by unlocking their significant deposits.
Australia’s center-left Labour government created the National Reconstruction Fund to boost domestic manufacturing industry in the wake of supply shortfalls experienced during the Covid-19 pandemic. So far, the independent fund has invested just a fraction of its A$15-billion pool.
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