Sydney, June 30th (Argus) - Australian mineral developer Arafura Rare Earths has signed a binding purchase terms agreement with a member of an Indian industrial group to supply 500 tons per year of raw materials for rare earth magnets from its Nolans project.
On June 30th, the company stated that under the purchase agreement, Arafura will provide neodymium praseodymium, dysprosium and terbium oxides to the purchaser for an initial period of 5 years, with the option to extend for another two years.
The binding terms list depends on the complete form document of Arafura's purchase policy and compliance. Arafura said that its purchasing partners must also be selected, approved and officially designated as the beneficiaries of the Indian government's $815 million rare earth magnet program.
The Nolans project in the northern region is expected to produce 4,400 tons per year of praseodymium-neodymium oxides and 470 tons per year of mixed heavy rare earth oxides over at least 38 years. It is expected to supply approximately 4% of global praseodymium-neodymium demand once fully operational.
The company stated that after receiving non-binding support from the Australian Export Finance Corporation (EFA) regarding 500 tons per year of praseodymium-neodymium under the country's key mineral strategic reserve program, Arafura made a final investment decision on the project in May, which exceeded 80% of the target purchase threshold for Nolans.
The company also signed purchase agreements with South Korean automaker Hyundai, German industrial manufacturer Siemens, and Traxys Europe.
Arafura now has a production capacity of 4,070 tons per year, or 83.6% of its capacity, with purchase contracts already signed. The remaining 370 tons per year is currently not contracted and will be sold in the spot market.
