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The Federal Government has confirmed it will provide conditional funding for Arafura Rare Earths’ Nolan project in the Northern Territory.

The debt funding package of $840 million will be used to progress the Nolans project, located 135km north of Alice Springs.

“Gaining this level of support from the Federal Government is a critical milestone in becoming a globally significant producer of NdPr, a product essential for electric vehicle and wind turbine manufacturers to achieve future growth targets as part of the energy transition,” Arafura managing director and chief executive officer Darryl Cuzzubbo said.

“Being able to secure these debt terms reflects the quality of the Nolans project. It brings us significantly closer to making a final investment decision and contributing to a lower carbon future.”

The finance package includes a $190 million limited-recourse senior debt facility under the Federal Government’s $4 billion Critical Minerals Facility (CMF). The CMF is administered by Export Finance Australia (EFA).

It will also include $150 million limited-recourse senior debt facilities from the Northern Australia Infrastructure Facility (NAIF). Both facilities have a 15-year tenor.

EFA will also provide Arafura with a subordinated standby liquidity facility of up to $303 million under the CMF to help manage any capital expenditure and operating increases.

“We are thrilled to be in partnership with EFA and NAIF, other government stakeholders, our customers and communities to create jobs and economic opportunities for many decades to come,” Cuzzubbo said.

Early works at the Nolans project were completed at the start of the 2023–24 financial year. Arafura currently has binding offtake agreement with Hyundai Motor Company and Kia in South Korea and Siemens Gamesa Renewable Energy in Germany.