May 7, 2012 (Source: WSJ) — An unidentified Korean multinational is banking on rare earths developer Arafura Resources for future supply.
Arafura says it is moving to convert an initial agreement on supply of rare earths–a group of 17 elements used in products ranging from tablet computers to hybrid cars–from its Nolans project in Australia into a binding sales and purchase agreement. The preliminary deal also covers processing facilities in Australia and South Korea and funding to bring Nolans into production.
The Nolans project, which has operations both at the Nolans Bore Mine in the Northern Territory and the Whyalla Rare Earths Complex in South Australia state, has a projected mine life of 20 years. Its projected annual production of 20,000 tons of rare earth oxides is equal to around 10% of the world’ s supply.
In March, Arafura said it was discussing funding and commercial off-take agreements with the commodity trading unit of Germany’s ThyssenKrupp. The aim was to conclude an exclusive commercial agreement for the sale of Arafura’s rare earths products in Germany and possibly other European countries.
China currently produces around 95% of the world’s rare earth minerals but controls exports, hampering their availability to non-Chinese countries.
Arafura is trading at a 12-month low of 25 cents a share, giving it a market value of 99 million Australian dollars (US$100.2 million).
Other companies looking to export rare earths from Australia include Lynas and Alkane Resources.
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