Rare Earths Industry Boosted by Another $200 Million to Break Reliance on China

Industry and Science Minister Ed Husic speaks to media during a press conference in Canberra, Australia, on May 13, 2021. Sam Mooy/Getty Images

The Australian government’s National Reconstruction Fund Corporation (NRFC) has announced a $200 million (US$123 million) investment in Arafura Rare Earths to advance the critical minerals sector.

The funding will help develop the Nolans Project, a rare earth mine and processing facility located 135 kilometres north of Alice Springs.

The development is set to create 600 jobs during the construction phase and 350 ongoing roles once mining and refining operations are underway.

Additionally, the project aims to provide substantial opportunities for First Nations communities in the Northern Territory through employment, training, and business partnerships.

“Our $15 billion National Reconstruction Fund is building Australia’s future. In just the last eight weeks, the NRF has announced more than $360 million in deals, with more to come,” Industry and Science Minister Ed Husic stated.

Strengthening Supply Chains and Regional Economies

The Nolans Project has already received over $1 billion in federal taxpayer support within a year, including the latest funding injection.

Husic highlighted Australia’s significant rare earth reserves and their importance in the global market.

“We’ve got one of the largest endowments of rare earths on the planet, and the global market is expected to double over the next decade,” he said.

The project’s focus on local processing aligns with the fund’s investment mandate to add value within Australia.

Arafura’s Managing Director Darryl Cuzzubbo said the investment is important for building domestic processing capabilities and enhancing global supply chain resilience.

Strategic Importance and Global Impact

Rare earth elements are vital for technologies such as wind turbines, electric vehicles, and advanced communications, as well as defence systems.

Establishing a sovereign supply chain outside China is a strategic priority for Australia and its allies.

Alice Springs will act as the logistics hub for the project’s construction and operations, supporting regional economic growth.

“This project is not only expected to create hundreds of local jobs but also business opportunities for local SMEs and the potential for shared regional infrastructure,” said fund Chair Martijn Wilder.

Driving Industry Transformation

The Nolans Project is poised to become Australia’s first neodymium and praseodymium ore-to-oxide processing facility. Fully permitted and construction-ready, the project has also secured international financier support.

Once operational, it is projected to produce 4,440 tonnes annually, meeting approximately 4 percent of global demand by 2032.

Shares in Arafura Rare Earths surged by more than 20 percent following the announcement, reflecting strong market confidence in the initiative.

Wilder labelled the project a “nation-building” endeavour, crucial for the future of Australian industry and manufacturing.