Arafura to Keep Nolans Rare Earths Separation Plant Local

Arafura Resources (ASX:ARU) plans to build a separation plant for its Nolans neodymium-praseodymium (NdPr) project on site, as opposed to its prior offshore plans for the plant.

The separation plant’s purpose is to take a mixed rare earth intermediate product and refine it into NdPr oxide and other rare earth products. Arafura originally intended for the plant to be located offshore, with locations such as South Korea being considered for environmental, economic and operation factors.

However, the project’s definitive feasibility study (DFS), test work and flowsheet piloting programs indicate that moving the plant to the Nolans site in Australia’s Northern Territory will be more feasible due to what the company calls “process and configuration efficiencies.”

According to the company, moving the plant to Australia will also mitigate some of the project’s operational risks. Additionally, risk assessments completed by Arafura and environmental consultants envision no extra environmental impact caused by the relocation aside from what’s already been established in the project’s environmental impact statement.

“We are very pleased to have settled on the site for the project’s separation plant. This makes Nolans a 100% Australian domiciled project and unlocks significant value prior to product export,” Arafura Managing Director Gavin Lockyer said in a statement.

“Nolans will soon represent a new long-term, secure supply of 3,600 tonnes of NdPr oxide each year and building the separation plant at the project site will bring additional benefits to the Northern Territory and in particular the Central Australian region,” he added.

The company expects Nolans, including the separation plant, to have a capital investment price tag of US$680 million for development and production ramp up. Arafura also anticipates that the separation plant will create 20 to 25 extra jobs, putting the project’s total workforce at an estimated 350 to 370, including contractors on and offsite.

Moving forward, the DFS for Nolans is expected to be completed in the coming weeks, while the company plans to advance funding and offtake discussions for an anticipated final investment decision to be reached in 2019.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.