Hyundai was already in the picture, having signed a non-binding agreement to secure the neodymium-praseodymium oxides needed for the permanent magnets in its new generation of high-tech vehicles in May, and has now been joined by compatriot Kia.

 

The pair will purchase a 99% NdPr product, as either an oxide or metal at the buyer's election, for seven years, with the ability to extend by five years.

 

The deal is for up to 1500 tonnes per annum from year four when the Nolans plant achieves nameplate of 4400tpa, which is about 40% of the 85% annual production available to be secured under long-term sale arrangements. 

 

The balance of the project is being kept for spot sales.

 

Pricing will be set in US dollars and will be linked to the Chinese price per tonne.

 

Hyundai is also in talks for a potential strategic investment in Arafura.

 

Arafura said there is strong interest in financing Nolans, and potential offtake partners, including GE Renewable Energy where a non-binding MoU for collaboration was signed in July

 

The offtake agreement is subject to certain conditions being met by mid-2026, including construction and development. 

 

Arafura said front-end engineering design was on track despite some schedule slippage, and it expects to be ready to take its final investment decision on what it describes as Australia's first vertically integrated rare earths operation in December.

 

Construction is expected to begin in early 2023 and first production in 2025.

 

The mine will be located near Alice Springs, with the planned processing plant to be located closed to Darwin.

 

Arafura started October with A$49 million cash following a $41.5 million placement at 26.5c in August.

 

Arafura's shares have traded between 17c and 50c over the past year and were up 10% in early trade at 33.5c, capitalising it at $579 million.