Arafura Rare Earths has announced its flagship Nolans mine will proceed, decades after it was first identified as a prospect. The mine, located 135 kilometres north of Alice Springs in the Northern Territory, has received substantial public funding and was listed as a priority in a critical minerals deal between the US and Australian governments last year.
The federal government has agreed to buy up to 500 tonnes of product per year from the mine, using funds from its $1.2 billion Critical Minerals Strategic Reserve. This marks the first use of the reserve, according to federal Resources Minister Madeleine King. Multi-billionaire Gina Rinehart is also a key investor in the project.
Nolans will extract and process rare earths to produce NdPr oxide, a material used in electric vehicle motors, renewable energy production, defence technology, and advanced manufacturing. It will be Australia's first ore-to-oxide rare earths facility, with a sulphuric acid plant planned for processing. At full capacity, the site is expected to supply about 4 to 5 per cent of global demand.
Managing director Darryl Cuzzubbo told the ABC Country Hour that the announcement was "the starting line" and production is several years away. He noted that it took decades to reach a final investment decision due to the complexities of building a processing facility in a market dominated by China. He said Nolans will provide a viable supply alternative to Chinese operations.
Industry observers say the mine will challenge China's dominance of the market. China currently produces more than 80 per cent of the world's light and heavy rare earths, and close to 100 per cent of heavy rare earths, according to sustainable minerals expert Ian Satchwell from the University of Queensland. He said China has long used its dominance to manipulate prices.
Arafura has also signed supply agreements with South Korean car manufacturers Hyundai and Kia, German renewable energy company Siemens Gamesa, and US commodity trader Traxys. Professor Satchwell said Nolans would reinforce Australia's position as the "pre-eminent" supplier of rare earths outside China.
