Highlights

• US EXIM issued a non-binding Letter of Interest for up to US$300 million to finance Arafura Rare Earths' Nolans Project, adding to the company's existing US$1.05 billion debt package under U.S.-Australia cooperation.
• The financing supports US supply chain resilience under EXIM's Supply Chain Resiliency Initiative, positioning Arafura to supply non-Chinese rare earth inputs to American defense and clean-energy manufacturers.
• With potential Phase 2 acceleration, Arafura could scale output to 11,000 tons per annum, potentially reaching $2 billion in annual revenues and positioning as the leading ex-China rare earth producer.

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In a move with significant implications for the global rare earth supply chain, Arafura Rare Earths Ltd. (opens in a new tab) (ASX: ARU) announced that the Export–Import Bank of the United States (opens in a new tab) (US EXIM) has issued a non-binding Letter of Interest (LOI) for up to US $300 million in potential financing for the company’s flagship Nolans Project in Australia’s Northern Territory. The funding would augment Arafura’s existing US$1.05 billion debt package, contingent on joint cooperation with Export Finance Australia ( (opens in a new tab)EFA) under a Single Point of Entry co-funding framework.

At an event in Washington, US EXIM Chairman John Jovanovic emphasized the strategic intent: to strengthen U.S. national security, bolster supply-chain resilience, and ensure access to the critical minerals powering American defense and clean-energy technologies. The initiative falls under EXIM’s Supply Chain Resiliency Initiative (opens in a new tab) (SCRI), which prioritizes projects that can supply U.S. manufacturers and defense contractors with non-Chinese rare-earth inputs.

Arafura CEO Darryl Cuzzubbo (opens in a new tab) called the LOI “a proactive demonstration of allied collaboration,” noting that Arafura’s integrated mine-to-oxide model positions it to directly feed U.S. downstream magnet makers. The potential incremental funding could accelerate heavy rare earth (HRE) feedstock development and enable future HRE separation—an area vital for NdFeB magnet performance used in EVs, wind turbines, and precision defense systems.

REEx Analysis

This development reinforces Arafura’s centrality in the ex-China rare earth value chain—and validates the U.S.-Australia critical-minerals alliance at a moment of escalating geopolitical tension. If consummated, EXIM’s financing would mark one of the largest U.S. government–backed rare earth investments outside American borders, signaling Washington’s willingness to use financial diplomacy to shore up allied capacity.

According to an Arafura investor on condition of anonymity, “Not only does it look like FID will be achieved very soon for phase 1, but it looks like phase 2 could be accelerated and financed in the immediate future.”  This means that the Arafura mines could yield 2.5 times the current projected output, totaling 11,000 tons per annum. And that excludes tolling deals that might be under discussion at the moment, as well as the phosphoric acid output. This could easily push revenues toward $2 billion per annum, making it not only on par with MP Materials and Lynas but also more economical. This could position Arafura as the number one ex-China rare-earth producer in a matter of a few years.

Key Questions:

• Will U.S. EXIM’s “non-binding” interest mature into definitive debt participation?  This is close to done, but still an item.
• How will this co-funding interface with Arafura’s existing lenders and offtake partners such as Hyundai, Kia, and Siemens Gamesa?
• Can Arafura realistically scale to include HREE separation, or is this a signaling gesture to attract future U.S. partnerships? REEx is aware that Arafura will likely never exploit HREE at scale. The key will be to learn HREE processing and turn it into a center to process others, such as Northern Minerals.

Stock Perspective

Fundamentally, Arafura’s asset base is robust, but the project remains capital-intensive and pre-revenue, typical of the development stage. Technical momentum is positive; ARU shares recently broke through resistance near A$0.25, reflecting renewed investor optimism following the announcement. Sustained gains will depend on confirmation of binding U.S. funding and construction milestones at Nolans.

In essence, this announcement is credible and strategically aligned with both nations’ critical minerals policy. Yet investors should watch for execution clarity—funding finalization, construction timelines, and magnet-grade oxide output metrics—to validate this geopolitical bet.

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