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noRtHeRn teRRItoRY sPotLIGHt

Funds start trickling into Arafura

or the first time since joining the rare million with a 15-year term. set to be the only one of its kind in Australia
Fearths hopeful, Arafura Resources Ltd Formal support from the Australian Gov- where ore will be mined and processed into
managing director Gavin Lockyer feels he ernment’s export credit agency came after a rare earths oxide at the same site.
is on the verge of executing what he was a number of equivalent overseas govern- Lockyer said the company was commit-
employed to do some 15 years ago. ment organisations also expressed interest ted to retaining as much of the manufactur-
While there have been several reasons in providing debt funding for Nolans, about ing “value-add” within the country as pos-
why Arafura has been unable to fund the 135km north of Alice Springs. sible.
development of its Nolans project, including The Northern Australia Infrastructure Fa- “The end product is much more valuable
a severely depressed rare earths market for cility (NAIF) has also previously indicated it than a mineral concentrate, or in this case
most of the last decade, Lockyer and others could provide up to $100 million in funding a mixed rare earth concentrate, being pro-
who have remained with the company for support for a project which is forecast to cessed off-site,” he said.
the duration of that challenging period can produce 4,440 tpa NdPr oxide at a low op- “It provides some optionality to our cus-
finally see the light at a very long tunnel. erating cost of $US24.76/kg over a 38-year tomers if they don’t necessarily want the
According to the extensive list of tasks mine life, according to a feasibility study up- rare earth oxide. We are in discussions
required to have Nolans in a “shovel-ready” date published in May. with a couple of groups around the poten-
position, Arafura has just two boxes left to Lockyer said both EFA and NAIF had tial of tolling that product into a metal which
tick – offtake and project funding – both of encouraged the company to start pulling is potentially more marketable for some of
which have gathered pace over the past together a more standardised contracting the European customers. We can do that
year. strategy for the development of Nolans, because we are doing that auto oxide here
“I really feel like I’m on the cusp of doing beginning with the FEED process and then in Australia.
what I was actually employed to do 15 years naturally rolling into the award of a fixed- “Where Arafura offers great benefit here
ago and that’s getting this thing financed price EPC contract. to potential customers is the fact that we’re
and into production,” Lockyer told Paydirt. Arafura subsequently appointed respect- doing everything at one site, the residues
“There’s a number of reasons why it’s ed engineering firm Hatch to design the No- are basically being managed and rehabili-
taken so long, but I’m feeling very confident lans hydrometallurgical plant as part of the tated at the site from which they came, and
that we’re in a really good spot in terms of initial FEED phase. therefore we can provide that degree of
project development, the team we’ve got to- “Hatch have really hit the ground run- provenance over not just where the NdPr
gether and just general market conditions.” ning,” Lockyer said. material was sourced, but where the waste
is being managed as well.”
Lockyer was optimistic the company
could secure key first binding offtake pack-
ages within the next 3-6 months, with
Arafura having a slightly longer term goal
of turning dirt for early works at Nolans in
2022.
“We’re targeting a final investment deci-
sion around August/September next year,
which obviously implies that we’ve got a
constructor ready to go, we’ve got our fund-
ing in place and we’ve raised the equity we
need for the project finance,” he said. “It’s
all systems go.”
Arafura has also committed to employing
as many locals as possible to build and op-
erate the future mine and processing facility
at Nolans in what would be a huge boon for
Central Australia.
Arafura is moving its Nolans rare earths project into a shovel-ready position “A local workforce is always preferable
to people flying in and flying out,” Lockyer
said.
Funding has started to roll in for Arafura “The FEED process will now run into the “We see this as a great opportunity for
with the company raising $40 million via a first part of next year with the view that we Alice Springs and the wider Central Aus-
placement in June and subsequently top- roll that over into a construction contract tralian community. We’ve got Laramba just
ping up its cash balance with a further $5.5 with an applicable constructor. The project down the road, we’ve got Ti Tree just up the
million from an oversubscribed SPP. itself is really going gangbusters and we’ve road, so I’d certainly hope that we can pro-
The capital raisings, largely going to- actually expanded our organisation and our vide opportunities for people living in this
wards funding the start of key FEED work internal capabilities quite significantly to en- area.
on Nolans, were undertaken about a month able that to happen.” “Obviously people need to be appropri-
after Arafura received a non-binding let- Arafura is attempting to position Nolans ately qualified and trained, but we’d love to
ter of intent from Export Finance Australia as the “non-Chinese supplier of choice” for see a 100% workforce from the region.”
(EFA) for a senior debt facility of up to $200 NdPr oxide. Once operational, the project is
– Michael Washbourne

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