Arafura Receives Approval to Advance Nolans REE Project

Arafura Resources (ASX:ARU) has received environmental approval from the Australian government to move ahead with the Nolans neodymium-praseodymium project in the Northern Territory.

The rare earths project, which is estimated to cost roughly AU$900 million, will see the company mine concentrate and chemically process rare earths at its wholly owned Nolans site. By-product material will then be transported to an offshore refinery for final processing into saleable rare earth products.

Arafura began applying for government approvals for the site late last year. This final environmental approval, which the company received from the Australian government, is the last in a long list that Arafura has collected over the past months.

The Australian government’s assessment, which was completed under the Environment Protection and Biodiversity Conservation Act, gives Arafura the green light to move ahead with a few important caveats. The recommendations relate to environmental impact and include considerations for biodiversity, groundwater protection and radiation.

“The quality of work completed by our sustainability team and environmental consultants GHD has again shone through in the receipt of this final government approval,” said Gavin Lockyer, Arafura’s managing director, in a company statement.

The Nolans project will focus on the mining and production of key rare earths neodymium and praseodymium, both of which are integral components in super-strength, high-performance magnets.

These permanent magnets are key to the automotive industry, and are currently used in the manufacturing and fabrication of electrical elements such as seats, mirrors, wipers and steering and braking components.

These specific rare earths also play a key role in the manufacturing of hybrid and electric vehicles. The mega magnets are a fundamental part of electric traction motors.

Upon completion, the Nolans project is expected to have a mine life of 30 to 35 years. Arafura plans to extract as much as 5 million tonnes annually to produce 650,000 tonnes of run-of-mine ore.

In late March, Arafura appointed Hatch, a global engineering consultancy, to perform a feasibility study for Nolans. Hatch has previous experience examining potential rare earths deposits, and was brought on by Arafura to provide information and expertise about sourcing lower-cost solutions at Nolans.

“To keep pace with technological advancements, there is a growing need for new suppliers of rare earths, particularly NdPr,” said Hatch associate Philippe Felton in a company statement. “The Nolans project is strategically important to the global market and aligns with our vision of creating a better world through positive change.”

Arafura hopes to have a final mining management plan drafted and in place during the second half of 2018.

On Monday (May 14), shares of Arafura closed in Sydney at AU$0.12.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.