Australia's Arafura secures new NdPr oxide offtake deal

: Metals
25/03/20

Australian producer Arafura Rare Earth will supply between 100-300 t/yr of neodymium-praseodymium (NdPr) oxide to Dutch trader Traxys Europe, bringing the company closer to its offtake target of 3,552 t/yr.

Arafura has agreed to supply at least 100 t/yr of NdPr oxide to Traxys for five years, but can choose to sell up to 300 t/yr of the material. The deal is priced in terms of NdPr ex-works China prices, the company said on 20 March.

Arafura indicated that it planned to link offtake deals to equity agreements, it said in an investor call in January. But the offtake deal with Traxys does not appear to include an equity component.

Arafura is currently developing the 4,400 t/yr Nolans project, a combined mine and NdPr refinery in Western Australia (WA). The company is aiming to secure offtake deals accounting for 80pc of the project's capacity.

German manufacturer Siemens has already agreed to buy 520 t/yr of NdPr from Arafura, with South Korean firms Hyundai and Kia taking an additional 1,500 t/yr of the material. Arafura has committed to sell 2,320 t/yr of oxide from the Nolans project since 2023.

Arafura is continuing to negotiate offtake agreements with Asian, European, and US consumers. Firms have expressed interest in buying up to 4,740 t/yr of NdPr oxide from the company, beyond the 2,320 t/yr already committed to customers and above Nolans' production capacity.

The rare earth developer has received extensive government support on its Nolans project. Australia's federal Labor government agreed to invest A$200mn ($126mn) into the project in mid-January. It previously committed A$840mn to the project in March 2024.

But Arafura is not alone. Australian officials have backed other rare earths projects over recent years, including Iluka Resources' Eneabba refinery in WA.

Argus' praseodymium-neodymium oxide min 99pc fob China price has been rising over the last three months. The price reached $61,850/t on 19 March, when it was last assessed, up from $54,500/t three months earlier.

By Avinash Govind

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