Arafura Resources Ltd (ASX:ARU) is negotiating with GE Renewable Energy to supply neodymium and praseodymium (NdPr) from the company's Nolans Project in the Northern Territory for the manufacture of GE’s offshore wind turbines and energy transition.
The negotiations for a long-term sale and purchase agreement are part of a non-binding memorandum of understanding (MoU) signed between the parties.
This MoU also outlines a potential strategic investment by GE in Arafura to be negotiated in conjunction with the intended NdPr sale and purchase agreement.
“New supply chain model”
Commenting on the MoU, Arafura managing director Gavin Lockyer said: “The signing of this MoU to collaborate with a Tier 1 OEM is a terrific outcome.
“Long-term Nolans NdPr may be used in magnets critical for power generation from GE’s Haliade-x12MW, one of the most powerful offshore wind turbines on the market.
“It is very gratifying that a new supply chain model, along with transparency of the value chain, will ensure we know exactly where our NdPr will be used, whether it is in a particular EV model or a series of wind turbines.
“The contribution of Nolans NdPr to enable clean energy technologies to decarbonise the world is becoming more and more apparent.”.
Key terms
The definitive and binding offtake agreement would be subject to key customary conditions being satisfied, including:
- Arafura securing project funding to develop the Nolans Project; and
- completion of construction, development, and commissioning of the Nolans Project.
Having GE as another foundational offtake partner will provide Arafura with product sales diversification both geographically and into new sectors like the offshore wind turbine market.
Analysts are forecasting the volume of annual offshore wind installations to more than triple, from 6.1 GW in 2020 to 23.1 GW in 2025, bringing its share of global new installations from 6.5% to 20% by 2025.
This exponential growth in demand is driven by the need for energy security and the role of renewable energy to meet the Paris carbon neutrality target by 2050.
GE Renewable Energy vice president and CTO Danielle Merfeld said: “This MoU is another example of our efforts to develop strategic collaborations that can help us accelerate the energy transition.
“Working with Arafura gives us a new and exciting option to obtain reliable, sustainable, and competitive sources of key materials going forward that will help us lower the cost of renewable energy.”
NdPr potential
The MoU recognises the strategic nature of NdPr, a critical mineral required in the manufacture of high-performance NdFeB permanent magnets and charts a path for GE and Arafura to jointly cooperate in the establishment of a diversified and sustainable supply chain.
The engagement between GE and Arafura will help strengthen the supply of sustainable materials critical to the energy transition objectives of GE customers in the EU, US and Australia.
Arafura is focused on establishing itself as GE’s preferred NdPr partner for renewables in the EU, US and other key markets.
Rare earths are essential materials for NdFeB magnets used in EVs and clean energy technologies, with magnets an essential component for the offshore wind industry, consuming over 600kg of NdFeB magnets for every MW of wind turbine generation capacity.
Secured rare earths supply for GE de-risks the magnet value chain, provides supply security and supports the growth of the local offshore wind sector.
About Nolans
The Nolans Project in Australia’s Northern Territory is a globally significant resource for NdPr with the capacity to support a value chain supplying nearly 5% of the global demand over a projected life of mine of 38 years with expansion potential.
With its ore to oxide business model that includes waste management certainty, it provides customers with a product supply chain that is both transparent and traceable.
Nolans has the potential to create significant employment opportunities and intergenerational change in the region, with projections of new jobs in Australia, including a construction workforce of 620 and 280 ongoing operational roles.