Green light for ‘globally significant’ rare earths mine
Australia has scored a “major win” in its bid to challenge China’s dominance of high-tech supply chains after a Gina Rinehart-backed rare earth miner greenlit its flagship project.
Arafura Rare Earths’ final investment decision to build the Nolans Project in the Northern Territory, which will be Australia’s first fully integrated ore-to-oxide rare earths operation, marks a significant milestone at a time when the West is seeking to reduce its economic dependence on China.
Thursday’s decision comes after years of buying relationships with companies including Hyundai, Kia and Siemens, and as the miner becomes the first company to receive support under a federal government plan to build a rare earth strategic reserve.
China mines more than half of the world’s rare earths but refines 90 percent of global production.
Rare earths contain essential elements and alloys that are key to modern technologies with defense and renewable energy applications.
Arafura managing director and CEO Darryl Cuzzubbo said government intervention was essential to get the project off the ground because the market does not function on its own.
“This is certainly a very monumental milestone for the company as we go into construction, but I would like to say this is a significant milestone for the Northern Territory and indeed Australia,” he told reporters in Perth.
Edith Cowan University senior geopolitics lecturer Naoise McDonagh said the strategic importance of the project was evident in the level of funding provided by Australia’s Western allies, including the US, Germany and South Korea.
“This is a really important step in terms of de-risking and diversifying supply in China,” he told AAP.
He said that China is experiencing difficulties in the supply of permanent magnets made of Neodymium-Praseodymium oxide that the Nolans project will produce.
“This is a big win, a very positive signal and I think the government will see it that way and the industry should see it that way too,” Dr McDonagh said.
Minerals Council chief executive Tania Constable said giving the project the green light showed how reforms to the Strategic Reserve and Australian Export Finance were turning policy into practical results.
“Australia has world-class critical mineral resources, but bringing projects online, particularly in rare earths, requires navigating opaque markets, long development timelines and concentrated supply chains,” he said.
Arafura, in which Ms. Rinehart’s Hancock Prospecting company owns a more than 15 percent stake, has received nearly $1.2 billion in taxpayer support so far.
Finance Minister Jim Chalmers said rare earths were essential to Australia’s economic and national security.
Nolans is expected to create 600 jobs during construction and maintain 350 permanent positions during steady-state operations.
Arafura’s share price was up more than two per cent at 30c in afternoon trading.
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