Arafura Rare Earths: With 93% of Output Already Sold, A$1.34 Billion War Chest Puts Nolans on Track for 2026 Construction

Arafura Rare Earths secures binding offtake for 93% of Nolans NdPr-oxide, raises A$350M via placement, with Hancock Prospecting as top investor.

The numbers are stacking up in Arafura Rare Earths' favour. The company has now locked in binding offtake agreements for roughly 93% of its target NdPr-oxide volume from the flagship Nolans project in Australia’s Northern Territory. Hyundai, Kia, Siemens Gamesa and commodities trader Traxys are among the buyers — a deliberate pivot away from Chinese supply chains in a global neodymium-praseodymium market that remains structurally undersupplied when Chinese production is excluded.

That commercial momentum is matched by a growing pile of capital. On Friday, the first tranche of Arafura’s institutional placement — worth A$175.5 million — settled as scheduled, putting the shares in the hands of investors and making them tradeable from today. The second tranche, also worth around A$174.5 million, requires shareholder approval at an extraordinary general meeting set for 2 July 2026, with settlement due on 8 July. In between, a share purchase plan for retail investors opens on 3 June, targeting a further A$25 million on the same terms as the institutional tranche.

The biggest single taker across the whole raise is Hancock Prospecting, the privately held empire of Gina Rinehart. Hancock subscribed for roughly A$85 million, receiving around 326.9 million new shares. Once the full placement is completed, Hancock is expected to hold about 17.5% of the enlarged capital, cementing its position as Arafura’s largest individual shareholder.

The institutional placement priced each new share at A$0.26, a 16.1% discount to the last close before the announcement. The market reaction was predictable: when trading resumed, the stock dropped almost 10% and now sits at A$0.27, giving Arafura a market capitalisation of roughly A$1.24 billion.

But the fully funded picture looks stronger. After all tranches of the placement and the previously committed cornerstone investments — including the European Fund for Infrastructure, Germany’s mineral resource security fund and the Northern Australia Resources Fund — Arafura expects a pro-forma cash position of around A$1.341 billion. Costs and proceeds from the share purchase plan are not yet included in that tally.

That war chest is not the only backing the project has attracted. The Australian government has designated Nolans a cornerstone of its critical minerals strategy, with Resources Minister Madeleine King calling the company a pillar of the national effort. Under the Quad partnership with the United States, Japan and India, Canberra has set up a strategic reserve worth A$1.2 billion to secure 500 tonnes of rare earths — a stable, non-Chinese source of NdPr-oxide. Export credit agencies from the US, Canada, Germany and South Korea are also lined up to support Arafura, while the Australian government is providing up to A$700 million in credit alongside A$140 million in equity.

Nolans is targeting an annual capacity of 4,440 tonnes of NdPr-oxide — enough to cover between 4% and 5% of global demand once production begins. That first output is scheduled for mid-2029, with construction starting in September 2026. The project is located 135 kilometres north of Alice Springs and is expected to become Australia’s third-largest rare earths producer, behind Lynas and Iluka. It will generate 600 construction jobs and 350 permanent positions for the Northern Territory.

CEO Darryl Cuzzubbo described the strong demand for the placement as a clear endorsement of the Nolans plan. For the Western allies bankrolling and buying from the project, the message from Canberra is equally blunt: Arafura Rare Earths must prove that independent supply chains for critical minerals are not just possible, but deliverable.