Arafura 101

[John]

I’m just going to put some basic ARU points here to kick things off. Disclosure – I hold shares in ARU on the Australian Stock Exchange (ASX: ARU).

Arafura (ARU) aim to produce:

Phase 1:

• NdPr Oxide – 4,400 t/pa
• SEG/HRE Oxide – 474 t/pa
• Phosphoric Acid – 144,393 t/pa

Phase 2 (which includes Phase 1 product):

• NdPr Oxide – 11,000 t/pa

The rest is not provided, but if we pro-rata:

• SEG/HRE Oxide – 1,185 t/pa
• Phosphoric Acid – 360,983 t/pa

With Phase 1, ARU modelling suggests this will provide 4% of Global NdPr Oxide demand. I note that this modelling was done, before tariffs were introduced in USA and Europe, before the demand for robotics was envisaged.

ARU hopes to reach its Financial Investment Decision by ‘around June 2025’, according to its CEO. If this happens, it is probably the largest NdPr Oxide project since Lynas back in 2007 to begin construction. Arafura has been on the journey for 18 years! It has had several failed attempts to secure finance and begin construction. One of the main contributing factors was China’s price suppression of NdPr. This made it impossible to attract investment.

However, the world has changed in recent years. And the west has woken up to China’s dominance and potential weaponisation of rare earths. To this end, ARU changed its strategy, from just producing an NdPr Carbonate that would then be processed in China, to now ARU will process it further into an NdPr Oxide. With 90% of the NdPr Oxides processed in China, ARU producing an Oxide is key to its strategy of creating an Ex-China supply of NdPr Oxide.

And with many different Governments backing ARU (through Debt and Equity), and likely to be many tier 1 companies locking in off take by also providing equity, it looks like ARU’s strategy is about to pay off.

Other attributes for ARU

• Tier 1 mining and processing location – Australia
• Has lowest quartile operating cost of any NdPr mine to oxide project in the world
• ESG compliant
• Has all permits and approvals
• Has all pre-works done to set up construction work camp, roads in/out, water etc.
• Has Gina Rinehart (Hancock Prospecting) as a significant shareholder (She also owns shares in MP Materials, Brazilian Rare Earths and Lynas)

Given that traditionally, the best time to invest in a mine is just before FID, is now the best time to invest in ARU? What do others think?

Some other Australian mines that are also seeking to move into construction soon are:

• Iluka (ILU)
• Hastings (HAS)
• Northern Materials (NTU)
• Brazilian Rare Earths (listed on the ASX BRE)
• VHM (VHM)

Who else is there?

 

[Fundamental]

I’m just going to put some basic ARU points here to kick things off. Disclosure – I hold shares in ARU on the Australian Stock Exchange (ASX: ARU).

Arafura (ARU) aim to produce:

Phase 1:

• NdPr Oxide – 4,400 t/pa
• SEG/HRE Oxide – 474 t/pa
• Phosphoric Acid – 144,393 t/pa

Phase 2 (which includes Phase 1 product):

• NdPr Oxide – 11,000 t/pa

The rest is not provided, but if we pro-rata:

• SEG/HRE Oxide – 1,185 t/pa
• Phosphoric Acid – 360,983 t/pa

With Phase 1, ARU modelling suggests this will provide 4% of Global NdPr Oxide demand. I note that this modelling was done, before tariffs were introduced in USA and Europe, before the demand for robotics was envisaged.

ARU hopes to reach its Financial Investment Decision by ‘around June 2025’, according to its CEO. If this happens, it is probably the largest NdPr Oxide project since Lynas back in 2007 to begin construction. Arafura has been on the journey for 18 years! It has had several failed attempts to secure finance and begin construction. One of the main contributing factors was China’s price suppression of NdPr. This made it impossible to attract investment.

However, the world has changed in recent years. And the west has woken up to China’s dominance and potential weaponisation of rare earths. To this end, ARU changed its strategy, from just producing an NdPr Carbonate that would then be processed in China, to now ARU will process it further into an NdPr Oxide. With 90% of the NdPr Oxides processed in China, ARU producing an Oxide is key to its strategy of creating an Ex-China supply of NdPr Oxide.

And with many different Governments backing ARU (through Debt and Equity), and likely to be many tier 1 companies locking in off take by also providing equity, it looks like ARU’s strategy is about to pay off.

Other attributes for ARU

• Tier 1 mining and processing location – Australia
• Has lowest quartile operating cost of any NdPr mine to oxide project in the world
• ESG compliant
• Has all permits and approvals
• Has all pre-works done to set up construction work camp, roads in/out, water etc.
• Has Gina Rinehart (Hancock Prospecting) as a significant shareholder (She also owns shares in MP Materials, Brazilian Rare Earths and Lynas)

Given that traditionally, the best time to invest in a mine is just before FID, is now the best time to invest in ARU? What do others think?

Some other Australian mines that are also seeking to move into construction soon are:

• Iluka (ILU)
• Hastings (HAS)
• Northern Materials (NTU)
• Brazilian Rare Earths (listed on the ASX BRE)
• VHM (VHM)

Who else is there?

Pensana (LSERE). Mkango (LSE:MKA), Meteroic (ASX:MEI)

 

[John]

Pensana (LSERE). Mkango (LSE:MKA), Meteroic (ASX:MEI)

Pensana - They are interesting, they are going to process their carbonate in the UK yeah? I want to do more research on these guys.

Mkango - These guys are in the exploration/development phase...and feel a long long time off FID.

Meteroic - This is an interesting play. Shipping carbonate to Ucore in usa.

Hey @Fundamental .....I'll create new threads in the Mine section for these Mines/Projects. It would be aweome to get your view or any useful info on these guys.

 

[Fundamental]

DM not working ?

 

[John]

Hi @Fundamental

I believe you can direct message an Admin. But you can’t direct message other Members.

 

[WideMouthFrog]

I’m just going to put some basic ARU points here to kick things off. Disclosure – I hold shares in ARU on the Australian Stock Exchange (ASX: ARU).

Arafura (ARU) aim to produce:

Phase 1:

• NdPr Oxide – 4,400 t/pa
• SEG/HRE Oxide – 474 t/pa
• Phosphoric Acid – 144,393 t/pa

Phase 2 (which includes Phase 1 product):

• NdPr Oxide – 11,000 t/pa

The rest is not provided, but if we pro-rata:

• SEG/HRE Oxide – 1,185 t/pa
• Phosphoric Acid – 360,983 t/pa

With Phase 1, ARU modelling suggests this will provide 4% of Global NdPr Oxide demand. I note that this modelling was done, before tariffs were introduced in USA and Europe, before the demand for robotics was envisaged.

ARU hopes to reach its Financial Investment Decision by ‘around June 2025’, according to its CEO. If this happens, it is probably the largest NdPr Oxide project since Lynas back in 2007 to begin construction. Arafura has been on the journey for 18 years! It has had several failed attempts to secure finance and begin construction. One of the main contributing factors was China’s price suppression of NdPr. This made it impossible to attract investment.

However, the world has changed in recent years. And the west has woken up to China’s dominance and potential weaponisation of rare earths. To this end, ARU changed its strategy, from just producing an NdPr Carbonate that would then be processed in China, to now ARU will process it further into an NdPr Oxide. With 90% of the NdPr Oxides processed in China, ARU producing an Oxide is key to its strategy of creating an Ex-China supply of NdPr Oxide.

And with many different Governments backing ARU (through Debt and Equity), and likely to be many tier 1 companies locking in off take by also providing equity, it looks like ARU’s strategy is about to pay off.

Other attributes for ARU

• Tier 1 mining and processing location – Australia
• Has lowest quartile operating cost of any NdPr mine to oxide project in the world
• ESG compliant
• Has all permits and approvals
• Has all pre-works done to set up construction work camp, roads in/out, water etc.
• Has Gina Rinehart (Hancock Prospecting) as a significant shareholder (She also owns shares in MP Materials, Brazilian Rare Earths and Lynas)

Given that traditionally, the best time to invest in a mine is just before FID, is now the best time to invest in ARU? What do others think?

Some other Australian mines that are also seeking to move into construction soon are:

• Iluka (ILU)
• Hastings (HAS)
• Northern Materials (NTU)
• Brazilian Rare Earths (listed on the ASX BRE)
• VHM (VHM)

Who else is there?

DC, the CEO of ARU, suggested they would process product from the Notthern states of Australia. Only this month he made this statement, so this opens up a very interesting can of fish? I cannot find who or what that means. Ie HRE or NdPr (their planned processing).

 

[John]

DC, the CEO of ARU, suggested they would process product from the Notthern states of Australia. Only this month he made this statement, so this opens up a very interesting can of fish? I cannot find who or what that means. Ie HRE or NdPr (their planned processing).

Was that on one of his broadcast interviews? Be great to have the link for which one he said that.

It also lines up with the Australian Govt's commitment (on both side of the house), to take back the Port of Darwin - curently in Chinese ownership.

Which mines do you think could be processed at Nolans/Arafrua? Maybe Northern Minerals?

Also maybe you can help me @WideMouthFrog what ever happened to MinHub? I thought that they were going to put a processing hub near Darwin? (Sorry i forget the finer details about it). But is this back on?