Gina Rinehart-backed Arafura Rare Earths expands major offtake deal by 70% Proactive uses images sourced from Shutterstock
Gina Rinehart-backed Arafura Rare Earths Ltd (ASX:ARU, OTC:ARAFF, FRA:REB) has secured a binding offtake agreement with a major global trading company, increasing the volume of rare earths committed from its Nolans Project in the Northern Territory by 70%.
The agreement marks a significant step for the rare earths developer, whose largest shareholder is Rinehart’s Hancock Prospecting, which holds a 17.5% stake.
Under the five-year agreement, Arafura will supply 850 tonnes a year of neodymium-praseodymium (NdPr) oxide once Nolans reaches full production, up from the 500 tonnes originally proposed under a term sheet signed in May.
The agreement also includes heavy rare earths and provides an option for a further two-year extension by mutual consent.
US critical minerals supply chain connection
The unnamed trading partner participates in the US government’s Project Vault initiative, which is designed to strengthen critical minerals supply chains and improve access to materials essential for American manufacturers.
The agreement positions Arafura to supply rare earth materials into a market increasingly focused on securing alternative sources of critical minerals.
Pricing will be denominated in US dollars and linked to an independent seaborne price index, such as those published by Benchmark Minerals Intelligence or S&P Global Platts.
Further offtake negotiations continue
Arafura continues to negotiate with other potential customers as it progresses development of the Nolans Project, which is expected to produce rare earth materials used in permanent magnets for electric vehicles, wind turbines and other advanced technologies.
The company has also indicated it will no longer routinely disclose the identities of potential offtake counterparties unless required, citing the need to protect commercially sensitive negotiations.