Oval Office boost for mine in Centre

By ERWIN CHLANDA

Anthony Albanese and Donald Trump this morning signed a USD$100m equity investment in the Arafura Nolans rare earths project at Aileron, 135 km north of Alice Springs.

"Once operational, this project will produce 5% of global rare earths - essential for energy security and defence," says a statement from the Prime Minister.

"The historic framework," also including the Alcoa-Sojitz Gallium Recovery Project in Wagerup, Western Australia "will assist both countries in achieving resilience and security of critical minerals and rare earths supply chains, including mining, separation, and processing, through use of economic policy tools and coordinated investment.

So far just $40m has been spent by the Australian company on early site works including access roads and accommodation for 200 people. It has signed a gas supply agreement.

Arafura has conditional credit approvals for more than US$1 billion underpinned by an A$840m debt commitment from the Federal Government, through the North Australia Infrastructure Facility and Export Finance Australia, according to the company, plus other sources of money.

Arafura Rare Earths Limited is focused on the development of particularly neodymium and praseodymium, elements that are crucial for various technologies, including electric vehicles and wind turbines.

Arafura has secured 66% of its 80% binding offtake target with Hyundai Motor Company and Kia (South Korea), Siemens Gamesa (Germany) and Traxys Europe SA (Luxembourg).

Arafura said before this morning's agreement that it is seeking to raise a further US$660m in equity funding.

UPDATE October 22, 1.15pm

The Albanese Government will invest $USD100m equity in addition to existing $USD657m investment.

The US Government is considering investing up to $USD300m, following further due diligence. Overall, through the framework Australia and the US have both agreed to take measures to invest at least $1 billion in critical minerals projects in the next six months.

The Australian Government will provide financing for projects from the Critical Minerals Strategic Reserve and the Critical Minerals Facility, alongside other special investment vehicles like the National Reconstruction Fund and Northern Australia Infrastructure Facility.

UPDATE October 23, 10am

The need to pump vast amounts of public money into mining an ore for which there is immense world-wide demand is explained by Rolf Gerritsen (pictured) as a strategic, not a commercial decision.

The Arafura Nolans deposit near Alice Springs is estimated to contain 5% of the world’s demand for rare earths. Yet the money for developing it will come mostly from Canberra (see this report).

The Alice based economist and Emeritus Professor, now retired, says China, on track to replace the USA as the premier world power, over decades has carved out a virtual monopoly in refining rare earths. They are a vital component in the manufacture of IT equipment and electric motors.

This was a major topic for the Oval Office meeting between Prime Minister Anthony Albanese and President Donal Trump this week.

“For 20 to 30 years everybody was nice and happy for China to do the processing which produces horrible toxic waste, much of it radioactive,” says Prof Gerritsen.

Growing tensions between the US and China now require a few focus.