Arafura Rare Earths Crosses First Funding Hurdle with A$175.5M Placement, Eyes July EGM for Remainder

Arafura Rare Earths completes A$175.5M first tranche of capital raise; second tranche of A$174.5M depends on shareholder vote July 2 for Nolans project.

The first chunk of Arafura Rare Earths’ A$350 million capital raising has landed. Some 675 million new shares were issued at A$0.26 apiece, settling on 28 May and delivering A$175.5 million into the company’s coffers. That price represented a 16.1% discount to the last closing level before the placement was announced. The stock begins trading on the Australian Securities Exchange from 29 May.

Lining up behind the raise is a coalition of state-backed and private capital. Hancock Prospecting, the mining vehicle of billionaire Gina Rinehart, is contributing A$85 million in total. Once both placement tranches are complete, its holding will reach around 17.5% of the company. Also on the register are Export Finance Australia, the German Raw Materials Fund managed by KfW, and Australia’s National Reconstruction Fund Corporation — though those commitments remain conditional. The second tranche, worth roughly A$174.5 million, still requires a green light from shareholders.

That verdict will come at an extraordinary general meeting scheduled for 2 July. If approved, the second tranche would settle on 8 July and start trading the following day. Alongside the institutional placement, Arafura is offering a share purchase plan to eligible retail investors in Australia and New Zealand. The SPP targets up to A$25 million at the same A$0.26 price, with a cap of A$30,000 per participant and no fees. The prospectus is due out on 3 June, subscriptions run until 7 July, and new SPP shares would be issued on 15 July. The company reserves the right to scale back or cancel the plan.

The proceeds are earmarked for the Nolans project in the Northern Territory, billed as Australia’s first fully integrated rare earths processing facility. Construction is expected to begin in September, with a 30-month build timeline. First deliveries of neodymium-praseodymium oxide — a key input for permanent magnets in electric vehicles and wind turbines — are targeted for mid-2029. Annual output is projected at 4,440 tonnes, giving Arafura a 5% share of global NdPr demand. The mine has a 38-year life, and engineering and construction management have been contracted to Hatch.

Arafura’s pro-forma cash position after the first tranche and earlier equity commitments from the fourth quarter of 2025 stands at roughly A$1.34 billion as of 31 March. That covers the equity portion required for Nolans. But with nearly 1.35 billion new shares to be issued across both tranches, existing holders face significant dilution. The 2 July vote will decide whether the full financing pathway opens — and at what cost to current shareholders.