Arafura Rare Earths Secures A$175.5M in First Tranche as Hancock Deepens Stake in Nolans Project

Arafura Rare Earths hits first funding milestone, raising A$175.5M from institutional investors for its A$1.6B Nolans project, with Hancock Prospecting as cornerstone.

Arafura Rare Earths has crossed its first major funding milestone, settling the initial tranche of a two-stage institutional placement that will help bankroll the A$1.6 billion Nolans rare earths project in Australia’s Northern Territory. The A$175.5 million raised from institutional investors this week brings the pro forma cash position to approximately A$1.34 billion once all components of the broader financing package are completed.

The placement is split into two tranches totalling A$350 million, with new shares issued at A$0.26 apiece. That price represented a 16.1% discount to the last closing price of A$0.31 before the trading halt was called. The second tranche, worth roughly A$174.5 million, still requires shareholder approval at an extraordinary general meeting scheduled for July 2. A separate share purchase plan for retail holders is expected to add another A$25 million to the kitty.

Shares in the rare earths developer resumed trading on Friday at A$0.27, down from A$0.31 ahead of the halt, giving the company a market capitalisation of about A$1.24 billion. The stock had rallied around 90% over the past twelve months and was up 15% year-to-date before the announcement, buoyed by the global push to diversify critical mineral supply chains away from China.

Hancock Prospecting, the private vehicle of mining magnate Gina Rinehart, emerged as the cornerstone investor, subscribing for roughly A$85 million of the placement. Upon completion of the second tranche, Hancock’s stake in Arafura is expected to reach about 17.5%. Three other state-backed investors also committed between April and May 2026: the European Fund for Infrastructure, Germany’s Mineral Resources Security Fund (GRMF), and the Australian government’s Northern Australia Resources Fund. Their presence underscores the strategic importance of Nolans, which is designed as a fully integrated rare earths supply chain in a politically stable jurisdiction.

The A$1.34 billion in pro forma cash covers the project’s capital requirements, and Arafura has already secured binding offtake agreements covering 93% of Nolans’ planned output. Chief executive Darryl Cuzzubbo confirmed the final investment decision is in place, with construction to begin in September 2026 and first production targeted for mid-2029. Once operational, the project is expected to produce 4,440 tonnes of neodymium-praseodymium oxide annually, a critical input for high-performance permanent magnets used in electric vehicle motors and wind turbines. That would rank Arafura as Australia’s third-largest rare earths producer behind Lynas Rare Earths, with capacity of 6,600 tonnes, and Iluka Resources, which plans 5,500 tonnes.

The wider rare earths sector has been lifted by Western governments’ scramble to secure non-Chinese sources of magnet metals. Arafura’s ability to draw in sovereign investors from Europe and Australia, alongside a billionaire-backed Hancock, signals growing confidence that the Nolans project can deliver a commercially viable alternative to Chinese processing dominance. The stage is now set for the July shareholder vote, which will determine whether the final A$174.5 million tranche clears the way for full-scale construction.