Australian Rare Earths Finalises AU$5 Million Federal Government Grant Agreement

Australian Rare Earths (ASX:AR3) has signed and finalised its AU$5 million grant agreement under the Australian government's International Partnerships in Critical Minerals (IPCM) program.

The funding will go toward the advancement of the company's Koppamura project in South Australia and Victoria.

“The grant validates the potential of the Koppamurra Rare Earths Project and its strategic importance in building diverse, resilient and sustainable supply chains through strong and secure international partnerships,” the company said.

Koppamura is said to host all four key rare elements, namely praseodymium, neodymium, terbium and dysprosium. Its JORC-compliant resource stands at 186 million tonnes at 712 parts per million total rare earth oxide.

With the funding in hand, the company will proceed to additional metallurgical testwork, as well as the completion of a prefeasibility study for the project. The money will also support the construction and operation of a demonstration plant to validate process design and significantly derisk the development pathway.

Australian Rare Earths said it will match the grant funding, bringing the planned expenditure to AU$ 10 million. A portion of the matched funding may also be eligible for the Australian Government Research and Development tax incentive refundable tax offset.

Australian Rare Earths had received an initial installment of AU$750,000 at the time of this writing. The remainder will be completed upon the company’s provision of progress reports, which will outline the advancement on agreed activities. Reports will be made by the company every six months, with the first due on July 30.

Completion of the activities is expected by December 31, 2026, while the grant agreement end date is June 9, 2027.

This past October, another ASX-listed rare earths company, Australian Strategic Materials (ASX:ASM,OTC Pink:ASMMF), also received a AU$5 million grant from the IPCM program. The amount was dedicated to developing the Dubbo rare earths project in New South Wales. Australian Strategic also matched the funding amount to increase expenditure.

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