Arafura Raises A$90M and Secures US$400M in Strategic Project Funding
Arafura Rare Earths has made decisive strides in funding its Nolans Project, securing up to US$400 million in conditional and indicative investments from Australian and US government-linked financiers, alongside a strong equity raise.
- Conditional US$100 million equity investment approved by Export Finance Australia
- US EXIM issues non-binding letter of interest for up to US$300 million
- A$90 million raised via placements and share purchase plan
- 66% of NdPr oxide production under binding offtake agreements
- Final investment decision targeted for Q1 2026 amid geopolitical supply chain shifts
Strategic Funding Milestones
Arafura Rare Earths Limited (ASX, ARU) has reported significant progress in advancing the funding and development of its Nolans rare earths project during the September 2025 quarter. Central to this momentum is the conditional approval of a US$100 million equity investment from Export Finance Australia (EFA), complemented by a non-binding US$300 million financing interest from the US Export-Import Bank (US EXIM). These developments position Nolans as a strategic priority under the newly formalized Australia-US Critical Minerals Framework, reflecting a broader geopolitical push to diversify rare earth supply chains away from China.
The company also successfully completed a two-tranche placement raising A$80 million and a share purchase plan raising an additional A$10 million, bolstering its cash position to A$90 million at quarter-end. This capital injection partially de-risks the final equity raise required for project execution.
Project Advancement and Operational Readiness
Beyond funding, Arafura has advanced key project delivery elements. The tender and evaluation process for an Engineering, Procurement and Construction Management (EPCM) contract is nearing completion, aiming to reduce execution risk by engaging experienced contractors. Engineering efforts have focused on optimising the hydrometallurgical plant design and securing a reliable gas supply through ongoing negotiations with Tamboran.
Operational readiness has been strengthened with the appointment of Jane Macey, a seasoned mining executive, to lead pre-construction workstreams. Environmental and regulatory approvals have progressed, including the final Radiation Protection and Radioactive Waste Management Plan and revisions to the Mine Management Plan, ensuring compliance and environmental stewardship.
Market Dynamics and Offtake Agreements
The rare earths market context remains dynamic, with China imposing further export restrictions on key heavy rare earth elements, intensifying supply chain concerns globally. This has catalysed international cooperation, exemplified by the Australia-US Critical Minerals Framework and Germany’s interest via the German Raw Materials Fund (GRMF), which is nearing completion of its appraisal phase for a potential €100 million investment linked to Nolans offtake into the European market.
Arafura has secured binding offtake agreements covering 66% of its targeted neodymium-praseodymium (NdPr) oxide production, including major partners such as Hyundai & Kia and Siemens Gamesa Renewable Energy. The company continues to engage prospective customers to secure the remaining offtake commitments.
Financial Outlook and Next Steps
Capital cost estimates remain stable with allowances for escalation and operational cost updates reflecting current market conditions. The company targets a final investment decision (FID) in the first quarter of 2026, contingent on securing remaining cornerstone equity and offtake agreements. The indicative project schedule anticipates a 41-month timeline from FID to production start-up.
With geopolitical shifts accelerating the demand for diversified rare earth sources, Arafura’s Nolans Project is poised to become a cornerstone of western supply chains, supporting advanced manufacturing, defence, and clean energy sectors.
Bottom Line?
As Arafura approaches its final investment decision, the evolving geopolitical landscape and funding milestones set the stage for Nolans to become a pivotal player in global rare earth supply security.
Questions in the middle?
- Will Arafura secure the remaining cornerstone equity and binding offtake agreements in time for the targeted Q1 2026 FID?
- How will China’s expanding export restrictions impact Nolans’ project economics and supply chain dynamics?
- What are the implications of US EXIM’s financing interest for Nolans’ potential expansion into heavy rare earth separation?
