Arafura Signs Rare Earths MOU with Saskatchewan Research Council

Arafura Rare Earths (ASX:ARU,OTC Pink:ARAFF) said on Monday (August 26) that it has entered a memorandum of understanding (MOU) with Canada’s Saskatchewan Research Council (SRC).

The MOU “brings together capabilities and interests in processing and supply of rare earths elements,” and is geared at allowing Arafura to process products from its Nolans project at the SRC’s facility in Saskatoon, Saskatchewan.

The MOU will allow Arafura and the SRC to put together a framework and timetable for the toll processing of samarium-europium-gadolinium/heavy rare earths (SEG/HRE) product from Nolans into a dysprosium and terbium oxide.

Dysprosium and terbium are both key for high-performance magnets in electric vehicles and other technologies.

Arafura's Nolans is the only project in Australia that is focused on neodymium-praseodymium (NdPr) and has complete environmental permitting. The company expects it to become a major supplier of these materials.

Nolans is anticipated to have a mine life of 38 years, with annual production of 573 tonnes of SEG/HRE oxide containing about 25 tonnes and 8 tonnes of dysprosium and terbium, respectively.

The company is planning for Nolans to be a downstream processing hub for enriched HREs. There is scope to enhance SEG/HRE recovery up to 47 percent by reducing the loss of value to waste via additional processing at the site.

Arafura remains focused on offtake deals for NdPr, but believes the collaboration with the SRC may give it the ability to "market a complete range of rare earth products" that are needed for high-performance magnets.

According to Arafura, current global supply of HREs is heavily reliant on sources from Myanmar and processing in China. The company's goal is to establish supply chain diversification, in which it aims to play a “pivotal geostrategic role” by providing responsibly sourced and ESG-compliant products to the global market.

Negotiation of a long-term agreement to sell and purchase Arafura’s NdPr oxide product for SRC’s metal smelting operations is also a proposed objective of the MOU between the two parties.

“This MoU has established an exciting Australia/Canada partnership,” concluded Darryl Cuzzubbo, managing director and CEO of Arafura. “HREs are vital for high-performance rare-earth magnets, and by collaborating, we will be geared to stay ahead of the global demand curve as the world transitions to a lower-carbon future.”

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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.