Highlights

• Export Finance Australia issues a non-binding Letter of Interest for Arafura's Nolans Rare Earth Project in Northern Territory.
• Project aims to establish a secure, standards-based rare earth supply chain outside of China for critical industries like electric vehicles and defense.
• Multi-government involvement from Australia and Germany signals strategic potential for global rare earth supply diversification.

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Arafura Rare Earths Limited (opens in a new tab) (ASX: ARU) announced today that Export Finance Australia (EFA) has issued a non-binding, conditional Letter of Interest (LOI) for potential further investment in the company’s Nolans Rare Earth Project in the Northern Territory. The LOI underscores the project’s alignment with the Australian Government’s Critical Minerals Strategy 2023–2030 and the G7 Critical Minerals Action Plan. (opens in a new tab)

The Nolans Project is positioned as the world’s most advanced ore-to-oxide rare earth development, aiming to deliver NdPr oxide for permanent magnets critical to electric vehicles, wind turbines, and defense applications. The project’s goal: establish a secure, standards-based supply chain outside of China, in partnership with key international markets.

CEO Darryl Cuzzubbo, (opens in a new tab) who was recently interviewed on the Rare Earth Exchanges (REEx) podcast (opens in a new tab), emphasized that “equitable risk sharing between government and industry through direct investment and offtake” is essential for developing Australia’s rare earth sector. EFA’s conditional interest follows recent momentum, including a referral to Germany’s Raw Materials Fund (opens in a new tab) for potential co-investment.

If finalized, EFA’s participation would add to previously announced debt commitments (March 2024) and Australia’s National Reconstruction Fund Corporation’s planned A$200M investment (opens in a new tab) (January 2025). No quantum or terms have been disclosed, and the deal remains subject to rigorous due diligence, risk assessment, government approval, and shareholder consent.

So, Why Does this Matter for Investors?

• EFA backing signals strong sovereign support, potentially de-risking project financing.
• Nolans could anchor Australia’s role in global rare earth supply diversification—directly addressing Western dependency on China.
• Multi-government involvement (Australia & Germany) suggests the project is now part of a strategic transnational supply chain initiative.
• Again, REEx has emphasized the absolute need for governments to support the ex-China rare earth element supply chain market via industrial policies.

Key Questions for Retail Investors

1. Quantum & Terms – Without clarity on the size or structure of EFA’s potential investment, how will this affect dilution or debt ratios?
2. Offtake Security – Will EFA’s backing accelerate binding long-term offtake agreements with OEMs and magnet producers?
3. Execution Risk – Given the capital intensity and technical complexity of ore-to-oxide processing, how robust is Arafura’s project delivery plan?
4. Market Timing – Can Nolans reach first production before forecasted NdPr demand surges, and before competing ex-China projects capture market share?

Lots are going on with Arafura, and the potential is substantial. Lots of chatter behind the scenes as to deal-making. REEx has listed Arafura #5 on the Light Rare Earth Element Project/Deposit Ranking Database.

Major investors include Hancock Prospecting (opens in a new tab) (Gina Rinehart) owning 9.38% of the outstanding shares according to MarketScreener. (opens in a new tab)

Rare Earth Exchanges will continue to track these developments and assess their implications for the emerging ex-China rare earth supply chain.

Source: Arafura Rare Earths Limited, ASX Announcement (opens in a new tab), August 12, 2025

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