Arafura Rare Earths has secured more than $1 billion in funding since January, highlighting the credentials of its emerging Nolans project.
Having successfully raised $141 million through a two-tranche placement and share purchase plan in January, the near-term rare earths producer has further de-risked its Nolans project in Northern Territory with further financing.
German export credit agency Euler Hermes has committed to a non-binding $US600 million ($900 million) loan to support the development of the Nolans project.
Arafura secured the loan with the support of KfW IPEX-Bank (KfW), which the company had appointed as an additional mandated lead arranger (MLA) in January to explore debt financing options for Nolans.
The mandate was for KfW to secure up to $US75 million of commercial debt financing in addition to funding that was already being sought by other MLAs.
The $US600 million is far beyond that expectation, demonstrating not only the potential of the Nolans project but also Arafura’s interest in establishing partnerships in jurisdictions across the world.
The company has already established partnerships with South Korean companies Hyundai and Kia (binding offtake agreement) as well as US company GE Renewable Energy (memorandum of understanding).
If the loan is approved, it would be conditional on Arafura entering in offtake agreements with German-based companies, with the associated neodymium-praseodymium (NdPr) products to also be processed in Germany.
For Arafura, Euler Hermes and KfW to secure approval for the loan, a formal application would need to be filed with the German Government including further economic, technical and legal information, along with the environmental and social attributes of the Nolans project.
Additionally, the Northern Australia Infrastructure Facility (NAIF) has provided a non-binding offer to increase its tranche of project finance from $100 million to $150 million for the Nolans project.
This comes as Nolans fulfilled a strategic assessment phase of the NAIF decision process, with a binding increase to the facility to come following due diligence and approval from the NAIF board.
“The Nolans project closely aligns with global customers’ critical raw material diversification plans and their ESG priorities,” Arafura managing director Gavin Lockyer said. “Support from Australian and international export credit agencies is a direct reflection of the value this represents.
“We look forward to close ongoing relationships with Euler Hermes, EFA (Export Finance Australia) and NAIF as we continue to progress offtake negotiations and the project moves through its next critical phases toward full funding, construction and first production.”
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