Australia’s first ore-to-oxide rare earths operation starts construction

Arafura Rare Earths has started constructing Australia’s first fully integrated ore-to-oxide rare earths operation, after reaching final investment decision on its Nolans Rare Earths Project in May 2026. 

Located north of Alice Springs in the Northern Territory, the Nolans Project will mine and process neodymium-praseodymium oxide (NdPr) as well as a SEG/HRE oxide. NdPr is used in the production of high-tech magnets found in wind turbines, electric vehicles, robotics and other products. 

Arafura has secured a diversified funding package with more than US$1.6 billion in equity and debt committed from sovereign-backed institutions across 5 nations. It also has binding offtake arrangements with organisations in Germany, Luxemburg, South Korea and the United States.  

These transactions underscore the strategic importance of the Project in diversifying global rare earths supply chains. The Project is expected to supply 4,440 tonnes of NdPr oxide per annum, or around 4% of the world’s NdPr oxide demand.  

Arafura’s Chair, Mark Southey, said: ‘The Board’s decision today (21 May 2026) marks the delivery of a long-awaited milestone for Arafura and its stakeholders. It is the culmination of a deliberate and patient strategy. We have always believed that the right partners would define the quality and durability of the Nolans supply chain.  

‘Together with our customers, investment partners and financiers across Europe, Korea, Canada, the United States and Australia, we are now ready to deliver our transformational Project.’ 

Chief Executive Officer and Managing Director, Darryl Cuzzubbo, said: ‘The achievement of FID reflects years of disciplined execution and partnership building. The offtake relationships we have established with Hyundai, Kia, Siemens Gamesa, Traxys and the various types of economic support provided by the Australian Government are not transactional arrangements.  

‘They reflect a shared recognition that the diversification of global rare earth supply chains is an imperative, not merely an opportunity.’ 

Construction of the Nolans Project started in September 2026, with first production expected in 2029. The Project is forecast to generate more than 600 jobs during the construction phase and sustain approximately 350 permanent positions through steady-state operations. 

Binding agreements with sovereign-backed entities 

Arafura’s multi-year financing and offtake strategy has drawn binding commitments from sovereign-backed institutions and binding offtake arrangements with manufacturers around the world. 

In April 2026, Arafura announced it had executed binding agreements with Germany’s state-owned development bank Kreditanstalt für Wiederaufbau (KfW) and Export Finance Australia for equity subscriptions totalling approximately A$230 million. 

Under the mandate of the German Raw Materials Fund (GRMF), KfW will subscribe for equity worth €50 million (A$84 million), subject to the fulfillment of all conditions precedent. It is KfW’s first investment as part of the GRMF mandate in the Australian critical minerals sector, and is aligned with Fund’s objective of diversifying critical mineral supply chains for German and European industrial customers. 

Export Finance Australia, under the Australian Government’s A$5 billion Critical Minerals Facility, will subscribe for shares worth US$100 million (approximately A$146 million). 

Arafura previously raised A$481 million from institutional and other investors in the final quarter of 2025. The project has also received A$200 million from the Australian Government’s National Reconstruction Fund. 

Members of Arafura Rare Earths and the Northern Territory Government at the groundbreaking ceremony for the Nolans Project.

Offtake agreements with leading manufacturers 

Arafura has secured long-term offtake agreements with Tier 1 counterparties across the United States, Europe and South Korea, reflecting strong demand from the automotive, wind energy and high-technology sectors. 

The company previously announced offtake arrangements totalling more than 3,000tpa with customers throughout Europe, Korea, the United States and India.  

Arafura is engaging with original equipment manufacturers and Tier 1 counterparties in Germany and across Europe to offtake a further 250tpa. 

The Australian Government has also issued a Letter of Support to potentially offtake 500tpa from the Project under its Critical Minerals Strategic Reserve. The CMSR secures the supply of select critical minerals for Australia and key international partners.  

Austrade assistance  

Austrade supported Arafura over several years through sustained engagement with investors, industry stakeholders and government partners across key markets, including Germany and the United States. Through its global network, Austrade facilitated strategic connections with financiers, manufacturers and policymakers, helping to elevate awareness of the Nolans Project and reinforce Australia’s reputation as a reliable partner in critical minerals development. 

Austrade also worked to strengthen international collaboration across allied supply chains through targeted investment promotion, industry engagement and bilateral initiatives. These efforts supported market confidence in both the Project and Australia’s broader critical minerals sector, contributing to opportunities for investment, financing and long-term commercial partnerships.  

Australia’s critical minerals opportunities 

Building a resilient critical minerals industry that can contribute to global supply chains is a priority for the Australian Government under its Future Made in Australia agenda. Foreign capital and capability will be essential in meeting this goal. 

Australia offers strong investment opportunities across mining and midstream processing. The latest Australian Critical Minerals Prospectus showcases 94 investment-ready projects, comprising 58 upstream and 36 midstream projects. 

Find out why Australia is made for critical minerals investment. 

How Austrade can help 

The Australian Trade and Investment Commission (Austrade) supports foreign investors to establish and expand operations in Australia. Our experts in Australia and around the world can help you through every stage of your investment journey. 

We offer the latest industry insights, connections with key stakeholders and decision-makers, and virtual or physical site visits to Australia. Thousands of foreign businesses have worked with us to tap into the Australian market. 

For information on investment opportunities in Australia, contact an Austrade investment specialist.