Article by Nick Evans courtesy of the Australian.
Gina Rinehart’s Hancock Prospecting has become the latest mining major to join the queue in rare earths, taking a 10 per cent stake in Northern Territory hopeful Arafura Rare Earths.
Hancock has taken a cornerstone $60m stake in Arafura as part of a $121m placement at 37c, which will eventually give Ms Rinehart’s family company a stake worth about 10 per cent of the rare earth project developer.
The deal comes amid strongly rising interest in rare earth plays, only weeks after Andrew Forrest told Fortescue Metals shareholders that the Pilbara miner was on the hunt for projects.
Arafura is still completing front-end engineering and design studies on the refinery for its Nolans rare earths project in the Northern Territory, but said in mid-November it expected the project to cost about $1.59bn to build, including contingencies.
The raising tops up Arafura’s bank balance as it looks to pre-order long lead items and kick off early works at Nolans in 2023. Arafura plans to produce about 4400 tonnes of rare earth oxides from Nolans when production begins in late-2025, according to the company’s current schedule.
Arafura was one of a suite of rare earth hopefuls that have held projects for more than a decade, but most recently has pitched itself as a solution to the desire of South Korean industrial majors to lock in a secure supply of rare earth metals and other critical minerals.
In early November, the company locked in a binding sales deal with the South Korean carmakers Hyundai and Kia.
Arafura’s deal with Hyundai locks in the sale of about 40 per cent of its annual output for seven years, or up to 1500 tonnes of neodymium and praseodymium oxide, destined for use in Hyundai’s electric vehicles.
It has also been in talks with GE Renewable Energy since July over the terms of an offtake deal with the US energy major to supply rare earth oxides for use in GE’s offshore wind turbines.
Arafura has said it plans to launch talks with potential funders for the project next year.
