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Arafura Rare Earths locks in gas supply for NT rare earths project

Updated: Mar 21

Arafura Rare Earths is making steady progress with the development of its Nolans project in the Northern Territory. Credit: File

Arafura Rare Earths has secured the gas supply for its proposed Nolans rare earth project in the Northern Territory after signing an agreement with the joint venture (JV) partners of the Mereenie onshore gas field.

Gas supplied as part of the deal will be aggregated from the Mereenie field JV partners – Central Petroleum, Macquarie Mereenie, Cue Energy Resources and New Zealand Oil & Gas – to supply a combined volume of up to 27.4 petajoules (PJ) of gas to Arafura.

The agreement was signed by Arafura’s subsidiary Arafura Nolans Project, requiring the gas-focused partners to provide natural gas from 2026 for a three-year term, with an option to extend for a further two years. According to the agreement, Central Petroleum will supply 6.85 PJ of gas, aggregated with supply of 2.06 PJ from Cue Energy, 13.7 PJ from Macquarie Mereenie and 4.8 PJ from New Zealand Oil & Gas.

Management says Mereenie is the biggest onshore gas field in the NT. Central Petroleum is the Mereenie field operator and has a 25 per cent participating interest while Cue Energy holds 7.5 per cent, Macquarie adds 50 per cent and New Zealand Oil & Gas has the remaining 17.5 per cent.

We are pleased to confirm the terms of gas supply for Nolans. Ensuring access to local natural gas is a positive step in the development of this major project, which will see critical rare earth minerals from the Northern Territory delivered to customers around the world in support of energy transition initiatives. Arafura Rare Earths managing director Darryl Cuzzubbo

The terms of the agreement include take-or-pay provisions and a requirement for conditions associated with the development of the Nolans project being met by the end of this financial year. It includes a final investment decision to proceed with the development of Nolans and the finalisation of debt financing for the project.

The deal is also dependent on Arafura obtaining all authorisations, approvals, licenses or permits from a government agency necessary for it to take delivery of gas.

The Nolans rare earths development is a shovel-ready, world-class neodymium-praseodymium (NdPr) project in the NT, about 135km north of Alice Springs. Access to the site is provided via a major nearby airport and there is also other infrastructure including the Stuart Highway about 10km to the east, major rail access in Alice Springs and a deepwater port in Darwin.

The project has a resource underpinning 4440 tonnes per annum of NdPr oxide production and a minimum 38-year mine life.

All NT Government approvals are secured, a mineral license and mining authorisation have been granted and a native title agreement is in place. There is also strong government support due to a close alignment with the Federal Government’s critical minerals policy.

Arafura has binding offtake agreements in place with Hyundai Motor Co., Kia Motors and Siemens Gamesa for up to 2020 tonnes per annum of NdPr oxide. The deals see about 53 per cent of the company’s binding offtake target met already, with it targeting 85 per cent of its nameplate production to be committed to such agreements.

A significant component of the project will be downstream processing, with Arafura signalling its clear intent for a beneficiation, extraction and separation plant. It is believed to be one of the only advanced ore-to-oxide projects of scale in the western world and is expected to churn out the 4440 tonnes of NdPr oxide a year when it hits peak production in 2028.

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