Arafura Rare Earths – using Australia's natural resources to create clean energy

Company: Arafura Rare Earths Ltd

Sector: Resources

Location: Perth, Western Australia

Profile: Arafura Rare Earths is a resources company developing a groundbreaking rare earths mine and processing facility in the Northern Territory, 135km north of Alice Springs.

Rare earths are a collection of chemical elements used in a variety of applications. Two of the rare earths, neodymium and praseodymium, are the raw materials in ultra-strong permanent magnets – essential to the modern electronics and automotive industries. With permanent magnet motors allowing electric vehicles and wind turbines to operate more efficiently, rare earths play an important role in reducing greenhouse gas emissions.

Peter Sherrington, chief financial officer and company secretary for Arafura Rare Earths, explains that the company’s R&D has enabled them to extract and produce neodymium and praseodymium oxide from minerals at its Nolans site in the Northern Territory.

Long term, he believes this work could pave the way for Australia to challenge China’s dominance of the global rare earths market. “Our company is creating sophisticated processing technology and doing research for an industry that doesn't even really exist in Australia,” he said.

Arafura started as an exploration company for a range of commodities but, after recognising the importance of rare earths for emerging technologies, switched its focus to project development at the Nolans site.

Arafura Rare Earths has invested in R&D over the past 10 years and, according to Mr Sherrington, the R&DTI was introduced when the company was up-scaling their R&D activities. “The scheme came in at a perfect time for what we needed to do. Our biggest year of spend on R&D was the first year the R&D rebate scheme ran,” Mr Sherrington said.

Mr Sherrington believes the investment market tends to hesitate when it comes to financing projects like Nolans because the rare earths industry is different to traditional resources industries. He credits the R&DTI with enabling Arafura to continue with focused R&D during times when resources were not seen as a desirable investment opportunity.

Arafura’s research has funded laboratory and large-scale pilot plants. These not only help progress Arafura’s projects but enable laboratories, research facilities and external consultants around the country to generate knowledge and expertise. This newly created knowledge will help other companies to start further along in the development process.

Arafura Rare Earths is in the feasibility stage of the Nolans project. When in production, the company believes the project will have a tremendous impact on the economy and the local community. There has been little economic activity around the Nolans site and many local communities depend on government support.

Mr Sherrington says that, in the next few years, the company will create a processing hub at Nolans which will create employment and career development opportunities for local people.

In addition, as clean energy applications from the permanent magnet industry continue to grow, the extracted neodymium and praseodymium resources from Nolans can help support better environmental outcomes.

Arafura will produce rare earths to highly regulated standards which may not apply to overseas companies. This includes meeting important waste management regulations and providing traceability from mine to final products.

A successful project will allow Australia to compete against China as an international producer of rare earths, creating an additional supply source for these important resources.