Arafura Rare Earths Limited has take a further step in lining up financial backers for its ambitious Nolans rare earths project, 135 kilometres from Alice Springs in the Northern Territory with news of critical debt funding backing.
As reported in @AuManufacturing, Arafura is advancing enabling works and equipment procurement including sulphanation bake and cooler units, funded by a successful $141 capital raise, including from Hancock Prospecting.
Now the company has received a Letter of Interest (LOI) from Canadian export credit agency Export Development Canadai (EDC) for the provision of financing of up to US$300 million – the company has been seeking a US$510 million debt financing facility.
The debt support follows receipt of in-principle letters of support from Germany’s Euler Hermes for up to US$600 million in untied loan guarantees in relation to offtake by German companies, and up to a combined A$350 million from Export Finance Australia and the Northern Australia Infrastructure Facility.
Arafura intends to supply wind turbine manufacturer Siemens Gamesa and Hyundai with NdPr oxide or NdPr metals, and has been hailed as one of the world’s largest new rare earths and could supply 10 percent of the world’s demand for the metals used in rare earths magnets.
The indication of support from EDC is linked to a strategic arrangement between EDC and General Electric Companyii (GE) to advance the energy transition.
Arafura and GE signed a Memorandum of Understanding in 2022 for supply of NdPr from Nolans for use in the manufacture of permanent magnets used in GE’s offshore wind turbines. Arafura and GE are in the process of negotiating a long-term sales agreement.
GE is also working with Arafura to supply cogeneration power plant technology including its aeroderivative LM2500 gas turbine and associated equipment to Nolans’ independent power provider, to support the power and heat requirements of the project’s processing facility.
EDC’s indicative support is not a commitment, and its participation is subject to its standard due diligence procedures.
Further reading:
Arafura closes in on rare earths production
Picture: Arafura Rare Earths