PERTH (miningweekly.com) – Rare earths developer Arafura Resources has signed a non-binding memorandum of understanding (MoU) with South-Korean automotive giant based Hyundai Motor Company for a potential neodymium praseodymium (NdPr) offtake from the Nolans project, in the Northern Territory.
The MoU provides a framework for the parties to negotiate a binding offtake agreement for the supply of 1 000 t/y to 1 500/y of NdPr oxide from the Nolans project, starting in 2025 for a seven year term on a “cost, insurance and freight” (CIF) basis.
The offtake agreement potentially represents just over one-third of the estimated average annual production capacity of 4 440 t from Nolans following expected ramp-up.
Offtake pricing would be determined quarterly using a formula-based mechanism referencing the NdPr oxide Ex Works China price per tonne. An industry recognised customary discount in recognition of the long-term offtake agreement would also be applied.
Under the MoU, the parties would work collaboratively to engage with relevant Export Credit Agencies to access debt funding and guarantees linked with critical materials procurement for use in Korean based manufacturing.
A binding offtake agreement is subject to Arafura securing project finance to develop the Nolans project and the completion of construction, development and commissioning of the project.
The A$90.8-million project, located in the Northern Territory, will leverage Australia’s mineral processing expertise to develop rare earth separation technology not currently available here now, creating 650 jobs at the peak of construction and new high-value export opportunities.
An updated feasibility study estimated that over a mine life of 38 years, the project would produce 4 440 t/y of NdPr oxide and 474 t/y of heavy rare earth oxide, as well as 144 393 t/y of phosphoric acid.
“The signing of the MoU represents a fantastic outcome and validates the Tier-1 credentials of the Nolans project as one of the world’s premier next generation NdPr ore to oxide projects. The Nolans project is strategically significant for Tier-one customers as it offers scale and supply chain diversification and security that will underpin their electric vehicles technologies,” said Arafura MD Gavin Lockyer.
Arafura’s offtake strategy for the Nolans project has been to target automotive ori