Posted on 08 Nov 2022
Australia’s Arafura Rare Earth announced Monday that Hyundai Motor Company has become a key foundation partner in its Nolan project, with a major neodymium-praseodymium (NdPr) offtake inked, Kallanish reports.
The companies signed a seven-year offtake agreement for the supply of roughly 40% of the 85% annual production available for long-term sale arrangements at the project in the Northern Territory, Australia. Supplies will start in 2025 at 600 tonnes/year of either NdPr oxide or metal. Deliveries will increase to up to 1,500 t/y in years four to seven to align with the project ramp up.
The agreement, which also includes orders from Kia Corporation -- sister company to Hyundai Motor Company -- is subject to Arafura starting commercial production and ramp up by 30 June 2026. The rare earth developer expects the project to reach full capacity of 4,400 t/y in 2027.
The South Korean carmakers will pay in US dollars a price determined using a formula-based mechanism referencing the NdPr price ex works China per tonne. The product grade should have total rare earth oxide of at least 99% content.
“Arafura’s offtake strategy for the project has been to target OEMs from geographic regions with supporting Export Credit Agencies and Arafura continues to receive strong interest from a range of parties that are aligned with its offtake and investment strategy,” the company says, adding it is negotiating the remaining 60% of production capacity with a range of multinational companies including GE Renewable Energy.
The deal with Hyundai also includes potential for a strategic investment from the carmaker into the rare earth developer. This, however, currently stands at a non-binding stage.
Nolans is Australia’s first vertically integrated rare earths operation, with both mining and processing taking place in the same site. The project has received Major Project Status from the local government and grant funding from the federal government; and it’s currently undergoing front-end engineering design (FEED).
Source:Kallanish
