Arafura Resources Limited (ASX:ARU) has signed a memorandum of understanding (MoU) with JingCi Material Science Co Ltd for the supply of neodymium-praseodymium (NdPr) oxide from its Nolans Project in the Northern Territory.
The non-binding MoU envisages a long-term supply to JingCi of up to 900 tonnes per annum of NdPr oxide, representing a quarter of Nolans’ forecast annual output of 3,600 tonnes.
It contains provisions for JingCi to assist Arafura in project financing, potentially through the introduction of original equipment manufacturers (OEMs) to the process, as well as providing a framework for negotiating a final offtake agreement.
Arafura managing director Gavin Lockyer said: “We are delighted to have signed the MoU with JingCi and look forward to working with them to negotiate a final offtake agreement.
“This is an important step in the company’s efforts to arrange financing for the Nolans project and is the result of a lot of hard work by our team.”
The company is also negotiating a number of offtake MoUs for the remaining NdPr oxide from Nolans, as well as for other rare earth products and phosphoric acid.
READ: Arafura Resources developing mining management plan for Nolans NdPr Project
JingCi is a tier-I Chinese manufacturer of neodymium-iron-boron permanent magnets, producing about 6,500 tonnes per annum and operating under Hitachi Metals’ worldwide patents.
Around 85% of JingCi’s sales are outside of China, primarily to globally-recognised automotive, wind energy, consumer electronics and industrial motor companies, as well as OEMs in the supply chain.
Mining management plan ongoing
Arafura started developing a comprehensive mining management plan (MMP) for Nolans last month, which follows confirmation of design from the definitive feasibility study progression.
The company anticipates submitting the MMP to the Northern Territory Department of Primary Industry and Resources in early 2019.
Final project construction and operating approvals on granted mining licences are obtained when the department approves the activities in an MMP and issues a mining authorisation.
Arafura expects the near-contemporaneous grant of the Nolans project mining licence and issuing of the mining authorisation in the first half of 2019.
26.4% NdPr in Nolans rare earth mix
Nolans rare earths-phosphate deposit is one of the largest and most intensively-explored deposits of its kind in the world.
It contains a JORC 2012-compliant mineral resource of 56 million tonnes at an average grade of 2.6% total rare earth oxides, that extends to 215 metres below the surface.
Two-thirds of the contained rare earths are in high-confidence measured and indicated resources.
The most abundant rare earth-bearing minerals at Nolans are apatite, monazite and allanite.
These minerals present a highly-desirable rare earth mix at Nolans, with 26.4% of the mix represented by NdPr.