Arafura Secures Funding Milestone for Critical Minerals Project

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Australian rare earths developer Arafura Rare Earths has entered the new year with a significantly strengthened balance sheet, marking a crucial step toward a final commitment on its flagship Nolans project. The company is targeting a Final Investment Decision (FID) by the end of the second quarter in 2026, according to its latest quarterly update, which detailed a transformed financial position.

A dramatic increase in cash reserves was the headline figure from the report. Arafura’s cash balance soared to 571 million AUD at the quarter's end, a substantial jump from the 90 million AUD held previously. This infusion stems primarily from a two-tranche equity placement completed in late 2025, which raised 475 million AUD (before costs). An additional 6.4 million AUD was secured through a Share Purchase Plan offered to existing shareholders.

The capital raise attracted participation from major shareholder Hancock Prospecting alongside new institutional investors, solidifying the funding base for the project's next phase.

The Path to Final Investment Decision

Management outlined the remaining capital requirements to reach FID. An estimated 134 million AUD in additional equity is still needed. On the debt side, the company has secured conditional financing commitments totaling 775 million USD. Furthermore, a non-binding letter of interest from the US EXIM Bank for up to 300 million USD is in place.

Concurrently, Arafura is advancing discussions with three potential cornerstone investors, each at an advanced due diligence and documentation stage:
* Export Finance Australia (EFA): Conditional approval for up to 100 million AUD
* National Reconstruction Fund
* German Raw Materials Fund: An initial 50 million EUR

The company aims to finalize agreements with these cornerstone investors by the end of March, which would enable a shareholder vote in the second quarter.

Supportive Market and Operational Readiness

Arafura’s update highlighted a favorable shift in market conditions for its core products. Over the past twelve months, the NdPr (Neodymium-Praseodymium) price has surged by approximately 80%, recently exceeding 100 USD per kilogram on the Asian Metal Index. According to the ex-China index from BMI, prices are trading about 10 USD per kilogram higher.

While a 12-month trade truce between the US and China has eased immediate tensions, China's export controls (implemented in April 2025) remain in effect. This continues to drive structural supply chain diversification efforts, supporting projects like Nolans.

On the operational front, Arafura restructured its project organization in late 2025 and appointed Hatch as the project management services provider. Hatch's prior involvement in early engineering and design phases is expected to accelerate the transition to execution planning. The company's current cash burn rate is approximately 2 million AUD per month, a figure anticipated to rise as the project team expands ahead of construction.

With the cornerstone investor agreements targeted for completion by the end of March, Arafura's roadmap points toward a shareholder vote in the second quarter and the overarching objective of achieving FID by the end of Q2 2026.