Arafura Rare Earths has converted its May term sheet with Traxys North America into a binding offtake agreement for up to 850 tonnes a year of neodymium praseodymium (NdPr) oxide, a 70 percent increase on the 500 tonnes in the original sheet. The contract runs five years with a two year extension by mutual consent, is priced in US dollars against an independent seaborne index, and covers associated heavy rare earths. No floor price was disclosed.
Traxys is one of three trading and procurement companies selected to source material for the US government’s strategic critical minerals reserve, known as Project Vault, and the Nolans volumes are earmarked for that program. In parallel, Australia’s A$1.2 billion Critical Minerals Strategic Reserve has committed to buy 500 tonnes of NdPr a year from the same project. Hancock Prospecting, controlled by Gina Rinehart, holds 17.5 percent of Arafura.
Nolans, about 135 kilometres from Alice Springs, is designed for about 4,440 tonnes of NdPr oxide a year, roughly 5 percent of global rare earth demand, as Australia’s first integrated ore to oxide operation. Construction began this month and first production is expected in mid 2029, so the Traxys tranche, just under a fifth of nameplate output, is contracted roughly three years before any metal ships.
The remaining test is commercial, not geological: about four fifths of Nolans output still needs buyers, and index linked pricing leaves project margins exposed to rare earth prices through the construction period. Rare earth miners fell 2.91 percent in the October 15 market table and are down 9.86 percent on the week.