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| Arafura Rare Earths |
Long-Term Supply Deal Strengthens Global Rare Earths Supply Chain
Arafura Rare Earths has signed a binding offtake agreement with Traxys Europe SA for the sale of neodymium-praseodymium (NdPr) oxide, essential for the production of high-performance magnets used in electric vehicles and renewable energy applications.
Under the five-year agreement, Arafura will supply a minimum of 100 tonnes per annum (tpa) of NdPr oxide from its Nolans project in Australia’s Northern Territory, with the potential to increase volumes up to 300 tpa at the company’s discretion. This deal represents a crucial step toward Arafura’s goal of securing 80% of its total offtake target.
Strengthening Global Supply Chain Diversification
“This agreement with Traxys moves us closer to achieving our offtake target of 80%,” said Arafura’s Managing Director, Darryl Cuzzubbo. “With only 34% of the product from Nolans remaining to be marketed, our ongoing negotiations mean we are well-positioned to reach this target.”
The agreement aligns with Arafura’s strategy to enhance global rare earth supply chain diversification. With rare earths being critical for advanced technologies, securing supply from a Tier 1 jurisdiction like Australia strengthens the stability of global sourcing. Nolans is recognized for its strong ESG (environmental, social, and governance) credentials, further enhancing its appeal to international buyers.
Key Conditions and Market Implications
Traxys, a global commodity trading firm specializing in metals and minerals, will market NdPr from Nolans to support global supply chain flexibility. The agreement is subject to conditions precedent, including the completion of Nolans’ construction, commercial production commencement, and ramp-up, all expected to be achieved by December 31, 2028.
This deal represents up to 8% of Arafura’s binding offtake target of 4,440 tpa of NdPr oxide. Arafura has already secured agreements with major industry players such as Hyundai, Kia, and Siemens Gamesa, covering 66% of its target, with negotiations ongoing for the remaining volumes.
