Australian government throws its weight behind rare earths with massive funding boost
Arafura Rare Earths’ (ASX: ARU) development plans to deliver Australia’s first combined rare earths mine and refinery in the Northern Territory have received a major boost with the federal government to provide $840 million in new funding.
The government support for the rare earths development at Arafura’s Nolans Project was revealed during a visit to the NT by prime minister Anthony Albanese, who said the funding will unlock further investment from international financiers and commercial banks.
The Arafura operation is located 125km north of Alice Springs and during construction is expected to create over 200 jobs, with over 125 full time jobs ongoing including the company’s stated ambition of securing 20 per cent local Indigenous employment.
Australia-made future
“My government is focussed on a future made in Australia, and this project is an important part of that plan,” Mr Albanese declared.
“This will create local jobs and economic opportunities, helping Australian and Territory companies and workers capture more value from the game-changing critical minerals deposits we have here.”
“This project is a major vote of confidence in the NT, which continues to punch above its weight in global trade.”
The prime minister said the investment will position Australia as a global leader in ethical and sustainable manufacturing of these minerals.
Critical minerals
Rare earth elements are used to make powerful magnets and are an essential component in renewable energy and defence technologies.
Electric vehicle motors, wind turbines, robotics and mobile phones are examples of the kinds of technologies that rely on rare earths.
The prime minister said critical minerals like rare earth elements are the building blocks for a clean energy future.
“Arafura’s project is an example of how this government is attracting investment into our critical minerals sector that will significantly contribute to the Territory’s role in energy transition and reducing greenhouse gas emissions,” he said.
“Backed by record levels of investment into exploration, the mining and processing of critical minerals is a priority opportunity for the Territory to create more work opportunities for Territorians.”
A renewables powerhouse
Federal Minister for Trade and Tourism Don Farrell said new critical minerals projects such as the Arafura rare earths development will help Australia become a renewable energy superpower.
“We have some of the largest deposits of critical minerals in the world and through this project we’re encouraging more international partners like the Republic of Korea and Germany to invest in Australia and diversify global supply chains.”
“International buyers and investors are key to developing our abundant critical minerals opportunities, which is why we are also building strong partnerships with major economies.”
Australia’s growing rare earths position
Australia’s natural riches have seen an acceleration of rare earths activity across the country.
VHM Limited
In Victoria, VHM Limited (ASX: VHM) is progressing the high-class Goschen REE and mineral sands project.
A recent string of highlights include the release of an inferred maiden mineral resource estimate (MRE) for the Nowie project at Goschen of 16.4 million tonnes at 3.8% total heavy minerals.
This increased the company’s total MRE to 836.8Mt.
VHM also recently successfully wrapped up negotiations for a first binding offtake agreement for Goschen phase 1 products (rare earth mineral concentrate and zircon-titania heavy mineral concentrate) with China’s Shenghe Resources.
West Cobar Metals
In the south of Western Australia, West Cobar Metals (ASX: WC1) is fast-tracking its promising Salazar rare earth elements project.
After a highly active year of exploration and acquisitions, West Cobar is preparing to undertake drilling and metallurgy studies to further confirm Salazar’s potential.
A 2023 review of the asset produced an updated exploration of 800Mt to 1,250Mt at 1,050 to 1,350 parts per million total rare earth oxides and 101 to 154Mt at 4.6 to 5.4% titanium oxide.
A key component of its 2024 exploration campaign is a large upcoming aircore drill program which has been designed to consolidate that exploration target estimate.
The flagship Salazar project is situated in the Esperance district, approximately 120km north-east of the port and all tenements are located on non-agricultural undeveloped state land.
CGN Resources
Further to the north, CGN Resources (ASX: CGR) is chasing rare earths and other critical metals in the “hot” West Arunta multi-element play in WA.
CGN is preparing for an extensive 2024 exploration program at its flagship Webb project which is surrounded by significant activity at projects operated by companies such as WA1 Resources (ASX: WA1), Rio Tinto (ASX: RIO), Encounter Resources (ASX: ENR) and IGO Ltd (ASX: IGO).
The 2024 program will include ground gravity and IP surveys at the Tantor, Surus, Snorky and Horton targets, along with an electromagnetic survey at Shep and a combination of reverse circulation and diamond core drilling across the company’s six principal targets.
RareX
RareX (ASX: REE) is looking to fast-track the development of its Cummins Range rare earth element project in Western Australia.
The company is focused on off-take opportunities at Australia’s largest undeveloped rare earths project.
RareX is now preparing for the submission of project approvals and securing offtake in the lead up to the conclusion of a pre-feasibility study.
It is also preparing to test near-mine anomalies with the potential to add material value to the project.
RareX remains bullish on the longer-term outlook for rare earths, which are expected to see plus 6% compound annual growth rates year-on-year for the foreseeable future.