Financial Investment Decision (FID) Discussion

[John]

So according the ARU CEO, the Financial Investment Decision (the go/no go decision made by the board) is likely to be ‘around June 2025’. Although, the CEO was also quick to point out they have financial runway to keep operating longer.

What do we know already as of Arpil 2025?

ARU has made significant progress in securing debt and equity financing, as well as establishing offtake agreements for its Nolans Project.

Debt Financing:

In July 2024, Arafura secured a debt package totalling US$775 million (approximately A$1.167 billion). This funding was supported by export credit agencies from Canada, Germany, and South Korea, along with commitments from commercial lenders.

​

Equity Financing:

ARU aims to raise A$1.2 billion through equity. In February 2025, the Australian Commonwealth Government, via the National Reconstruction Fund Corporation (NRFC), committed A$200 million as cornerstone funding for the Nolans Project.

​

So the equity book build could look something like this:

• $200m Australian National Reconstruction Fund Corporation (CONFIRMED)
• $200m Hancock (Corner Stone) (MOST LIKELY)
• $200m POsCO (Hyundai maybe in the mix) (Cornerstone) (FAIRLY LIKELY)
• $200m 2-4 Funds (Guessing one is Australian Super) (UNSURE)
• $200m Retail (Underwritten by XXXX) (FAIRLY LIKELY - They don't have to give retail/exisiting holders shares....)

Offtake Agreements:
Arafura has secured multiple offtake agreements to supply Neodymium-Praseodymium (NdPr) oxide from the Nolans Project:

​

• Traxys Europe SA: In March 2025, Arafura entered into a binding agreement to supply Traxys with a minimum of 100 tonnes and up to 300 tonnes of NdPr oxide annually over a five-year term.
• Hyundai and Kia: Arafura has established agreements with South Korean automotive manufacturers Hyundai and Kia, further diversifying its customer base and securing demand for its NdPr oxide production. There has been some suggestion that due to the delays, the expiry dates make these non-binding. However, ARU has never said this, and it all its tables for off take, have this as binding.
• Siemens Gamesa Renewable Energy: An offtake agreement has been signed with Siemens Gamesa to supply NdPr rare earths, highlighting Arafura's role in supporting the renewable energy sector.

Who else are we likely to see sign up to the off take?

• Posco?
• USA Dept of Defence?
• GE?

Timing of FID

• Well the CEO has said ‘around June 2025’
• Working backwards
• Bucket 4 – Existing Shareholders – This is likely to be a Share Purchase Plan, and these normally take about 4-6 weeks to process. So if 1 July is FID, then working back, the SPP would need to be announced around 15 may 2025.
• I think that Buckets 2 and 3 will all likely fall into the same announcement. They are all waiting on the negotiations between the off take customers who are also putting in equity – Bucket 1. So lets assume there is a 2 week break between SPP and the Bucket 2 & 3 announcements. So lets say 1 May 2025.
• Bucket 1 – Customer Cornerstone and Strategic – this is likely to be Posco and maybe USA DoD. I think for Bucket 2&3 to sign, there are about 6-8 parties, so that might take 2 weeks to get all the signatures etc. So I would assume that we would then hear something around mid April 2025.
• Of course, any of these timelines can be hastened if really required.
• But we should be hearing some Bucket 1 news by the end of April, or the timeline to FID will be too night to achieve by end of June 2025.

Conclusion on FID:
We seem to be getting to the pointy end. Crunch time. I think with so much Govt support, ARU will get FID achieved this year (I hope there are no delays). When a Govt provides this level of support, they must see it through because otherwise it looks bad to the voters. I think this has de-risked the FID decision.


What do others think about FID timing?

 

[JVP73]

In the $200M NRFC Equity Ann, it was stated that:

"At the NRFC’s election during the Conversion Period, the Convertible Notes will convert into fully paid ordinary shares in Arafura (Shares) at a fixed conversion price which will represent a 40 per cent premium to the Reference Price, which will be determined by the future equity raising required to fully fund and develop the Nolans Project(Equity Financing).

This Equity Financing is expected to be announced at or around the time that the Company makes a Final Investment Decision (FID) for Nolans. The Company will make further announcements regarding its EquityFinancing in due course."

Going by this, final equity could be announced at the time of making FID, July 1 (if that's when it's made)

Regardless, FID should be achievable for ARU, difficult to see how it doesn't given the global demand and support.

 

[John]

Yeah I agree with you @JVP73

And the CEO has also said it many times in interviews that he expects it done close to this financial year. And then he always caveats it by saying ARU has more cash runway to go into the next financial year.

What price do you think they will raise at?

I’ll maybe do a separate post with some of my analysis.

 

[JVP73]

The raise price is anyone's guess. If there are more cornerstone announcements leading up to FID and the world continues to seek REE ex-China, the raise could be around 40c. Purely speculating of course

 

[WideMouthFrog]

The raise price is anyone's guess. If there are more cornerstone announcements leading up to FID and the world continues to seek REE ex-China, the raise could be around 40c. Purely speculating of course

This also must consider the incoming government 'turbo charge'? It will be very interesting to see these unfold - imagine if we can get some interest free loans. i.e. I am not a big fan of the existing equity at 40% discount.

 

[John]

This also must consider the incoming government 'turbo charge'? It will be very interesting to see these unfold - imagine if we can get some interest free loans. i.e. I am not a big fan of the existing equity at 40% discount.

Yeah there are a range of things the Australian Governemnt can do.
- Cash Grants
- Debt
- Equity
- Off take
- Tax off sets for production
- apply Australian Tariffs on China NdPr

etc.

They have done quite a few of those (btw - the Debt part looks massive at a glance...but when you dig into the detail, the Australian Govt is not providing much actual debt).

When you look back to what the Chinese Govt did to support its Rare Earth Sector.....we are really just scratching the surface of what needs to be done. But when ARU gets up...it will be a very valuable business.

 

[WideMouthFrog]

So taking a look at the recent buy activity in the recent ARU shareholders, and there is a general theme; all incoming and increasing stakeholders are US based investors. There is definitely a theme running and its very clear, the US has intel on a matter that is undisclosed.

Notice the following;

Arafura Rare Earths has seen increased holdings from U.S.-based investment firms in 2025, particularly due to geopolitical shifts and strategic funding initiatives. Based on recent reports, key U.S. investors that have expanded their stake include:

• The Vanguard Group, Inc.
• Dimensional Fund Advisors LP
• Fidelity International Ltd
• Charles Schwab Investment Management, Inc.
• Tidal Investments LLC

Notice-
— heavy U.S. investment in Arafura *before* it's producing anything raises the strong possibility that institutional investors are acting on more than just public information. Here's why this could be happening:

---

### *1. Strategic Intelligence & Government Backing*

Major investment firms often receive *briefings or signals* from government entities — especially when national security or critical supply chains are involved. In Arafura's case:

* The *U.S. Department of Defense* and other agencies have already funded or partnered with rare earth projects outside China.
* These firms may be anticipating that *Arafura is earmarked for a future U.S.-aligned supply chain*, possibly with off-take agreements, defense contracts, or strategic stockpile purchases.

---

### *2. Due Diligence Access*

Large investors like Fidelity, Vanguard, and Dimensional often have *access to high-level management, private feasibility studies, and behind-the-scenes technical updates*. If those showed that:

* The Nolans Project is highly advanced in engineering or permitting,
* Off-take agreements with Western manufacturers are imminent,
* Or construction funding is effectively secured...

...then these investors are getting in before the price reflects that upside.

---

### *3. Anticipated Rare Earths Crunch*

These firms are likely betting on *future scarcity of NdPr* (used in EVs and military tech) and *view Arafura as a potential non-Chinese solution. So even though it's not built yet, it could become a **strategic choke-point asset*, just like MP Materials was in its early days.

---

### *4. Australian-U.S. Government Coordination*

The 2025 \$200 million investment by Australia’s National Reconstruction Fund in Arafura suggests *inter-governmental coordination. That may imply a **pipeline of future support from the U.S.*, not yet public.

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### *Bottom Line*

Yes — the clustering of U.S. institutional investment *likely indicates non-public confidence* in Arafura’s future, whether that’s due to:

* Pending government deals or off-takes,
* Strategic positioning in a supply chain reshuffle,
* Or insider knowledge of timelines and technical progress.

It’s more than coincidence — it’s positioning ahead of a probable inflection point.

---

Deeper Dive: U.S. Investment Patterns in Strategic Rare Earth Companies​

A look at how U.S. institutional capital has moved early in rare earth supply chain plays — and what that could mean for Arafura Rare Earths.

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1. MP Materials (USA)​

Background:​

• Owns the Mountain Pass mine in California — the only rare earth production site in the U.S.
• Was non-operational for years before revival via strategic private investment and federal support.

Investment Pattern:​

• Prior to full-scale production in 2020, investors included hedge funds, DoD-linked financiers, and a SPAC merger.
• The U.S. Department of Defense awarded contracts in 2020 and 2022 for separation capacity — well ahead of commercial output.
• BlackRock, Vanguard, and Fidelity built positions early, before mainstream market recognition.

Key Takeaway:​

Early institutional capital was a signal of confidence in future U.S. backing and national security relevance — rewarding those early entrants as MP became central to U.S. critical minerals policy.

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2. Lynas Rare Earths (Australia)​

Background:​

• Australia's top rare earths producer, refining in Malaysia.
• Faced environmental and geopolitical pressures, particularly from China.

Investment Pattern:​

• In 2020–2021, the U.S. DoD began funding Lynas' Texas processing plant.
• U.S. investment firms gradually increased holdings despite Malaysia-related risks.

Key Point:​

Strategic capital followed policy direction, not just quarterly earnings — aiming to build a non-China-aligned rare earth supply.

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3. Arafura Rare Earths (Australia)​

Current Status:​

• The Nolans Project is under development — not yet producing.
• Received A$200M in Australian government funding in 2025.
• No public U.S. off-take agreements yet — but signs of positioning are clear.

Investment Pattern:​

• Five or more U.S.-based institutional investors have recently taken or increased positions.
• Strategic investor Gina Rinehart holds positions in both MP Materials and Arafura, reinforcing the U.S.–Australia rare earth nexus.

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Connecting the Dots: Strategic Investment Trends​

Element	MP Materials	Lynas Rare Earths	Arafura Rare Earths
Early U.S. Investment	(hedge funds, SPAC)	(DoD + funds)	(Vanguard, Fidelity, DFA, etc.)
Government Backing	DoD contracts	DoD + Aus Gov grants	A$200M Aus Gov, U.S. alignment likely
Off-take Agreements	(Tesla, GM)	(DoD, Japan firms)	Not public yet — likely in progress
Production Status	Producing	Producing (Malaysia)	Construction phase
Geopolitical Relevance	(U.S. mine)	(China-alternative source)	(Supply chain diversification)

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Final Analysis:​

Arafura is emerging as a “next Lynas” or early-stage “MP Materials” — attracting capital from similar institutional players before production even begins.
Key insights:

• U.S. funds are positioning early — betting on future supply deals and strategic relevance.
• Geopolitics and critical minerals strategy are driving investment, not just earnings.
• Potential for valuation upside as partnerships, off-takes, or U.S. government linkages materialize.

Smart capital is moving early — again. The playbook seen with MP and Lynas may now be unfolding with Arafura.

---

 

[John]

Great work @WideMouthFrog

Yeah something has been brewing with ARU and the USA. Just hard to tell...but the insights above are amazing.

For a company as progressed as ARU and of such scale/longevity in the deposit....the Market Cap just doesn't seem right.

But I guess it is always darkest before dawn....and the world will wake up soon to the beast that ARU will become....

 

[WideMouthFrog]

Here is a copy of a news article from the NT media released today. A signal the government is backing ARU to support AuKUs. Aligns with comments above.


NT news - NT stands to benefit from Albanese Govt critical minerals and gas priority
Minister for Resources and Minister for Northern Australia Madeline King has signalled the implementation of the Future Gas Strategy and the Critical Minerals Strategy will be a priority, which augurs well for the Northern Territory. Read why.
Follow us on Apple News
Minister for Resources and Minister for Northern Australia Madeline King has signalled the implementation of the Future Gas Strategy and the Critical Minerals Strategy will be a priority, which augurs well for the Northern Territory.
Minister King said strengthening the resources industry is a key priority of the new Albanese Government as a part of its Future Made in Australia agenda.
“The implementation of the Future Gas Strategy and the Critical Minerals Strategy is vital for the nation’s productivity agenda,” she said.
“The development of our critical minerals and rare earths sector is central to Australia’s national economic, trade and security interests.
“The creation of a Critical Minerals Strategic Reserve, combined with Production Tax Credits and the expansion of the Critical Minerals Facility will support Australia’s economy and boost our resilience in a time of global uncertainty.”
The Federal Government is aiming to bolster Australia’s economic resilience and national security, transitioning from a critical mineral supplier to a global market leader.
Prime Minister Anthony Albanese said the Critical Minerals Strategic Reserve would help Australia unlock its full potential of critical minerals.
“Australia will be stronger and safer by developing our critical national assets to create economic opportunity and resilience,” Mr Albanese said. “To leverage our natural resources is in our national interest.”
To date the Albanese Government has invested $1.24 billion in the Northern Territory’s Arafura Rare Earth project
Northern Territory gas explorer Tamboran Resources recently signed a milestone agreement that could see it supplying gas to the Arafura Rare Earths Limited Nolans project in Central Australia. Tamboran and Arafura have entered into a non-binding Letter of Intent (LOI) to progress discussions for gas supply from Tamboran’s Beetaloo Basin assets to Arafura’s Nolans rare earth project 135km north of Alice Springs.
Minister King said the federal Government’s plan for northern Australia through work such as its continued support for the northern Australia Infrastructure Facility will create jobs, build infrastructure and support communities.
“Our resources industry is the engine room of the economy, but it is also increasingly important for our sovereignty and our national security,” Minister King said.
“Critical minerals and rare earths are essential for our defence industry and will be needed by our security partners, particularly as part of AUKUS.
“The Albanese Labor Government will work to ensure that all Australians benefit from the resources that are essential to our national interest.”

 

[Nomad]

Solid research and analysis as usual, appreciate the time you input to arrange and share information, thank you!

Happy "Wide Mouth Frog" has found a new home

 

[John]

Here is a copy of a news article from the NT media released today. A signal the government is backing ARU to support AuKUs. Aligns with comments above.


NT news - NT stands to benefit from Albanese Govt critical minerals and gas priority
Minister for Resources and Minister for Northern Australia Madeline King has signalled the implementation of the Future Gas Strategy and the Critical Minerals Strategy will be a priority, which augurs well for the Northern Territory. Read why.
Follow us on Apple News
Minister for Resources and Minister for Northern Australia Madeline King has signalled the implementation of the Future Gas Strategy and the Critical Minerals Strategy will be a priority, which augurs well for the Northern Territory.
Minister King said strengthening the resources industry is a key priority of the new Albanese Government as a part of its Future Made in Australia agenda.
“The implementation of the Future Gas Strategy and the Critical Minerals Strategy is vital for the nation’s productivity agenda,” she said.
“The development of our critical minerals and rare earths sector is central to Australia’s national economic, trade and security interests.
“The creation of a Critical Minerals Strategic Reserve, combined with Production Tax Credits and the expansion of the Critical Minerals Facility will support Australia’s economy and boost our resilience in a time of global uncertainty.”
The Federal Government is aiming to bolster Australia’s economic resilience and national security, transitioning from a critical mineral supplier to a global market leader.
Prime Minister Anthony Albanese said the Critical Minerals Strategic Reserve would help Australia unlock its full potential of critical minerals.
“Australia will be stronger and safer by developing our critical national assets to create economic opportunity and resilience,” Mr Albanese said. “To leverage our natural resources is in our national interest.”
To date the Albanese Government has invested $1.24 billion in the Northern Territory’s Arafura Rare Earth project
Northern Territory gas explorer Tamboran Resources recently signed a milestone agreement that could see it supplying gas to the Arafura Rare Earths Limited Nolans project in Central Australia. Tamboran and Arafura have entered into a non-binding Letter of Intent (LOI) to progress discussions for gas supply from Tamboran’s Beetaloo Basin assets to Arafura’s Nolans rare earth project 135km north of Alice Springs.
Minister King said the federal Government’s plan for northern Australia through work such as its continued support for the northern Australia Infrastructure Facility will create jobs, build infrastructure and support communities.
“Our resources industry is the engine room of the economy, but it is also increasingly important for our sovereignty and our national security,” Minister King said.
“Critical minerals and rare earths are essential for our defence industry and will be needed by our security partners, particularly as part of AUKUS.
“The Albanese Labor Government will work to ensure that all Australians benefit from the resources that are essential to our national interest.”

Great find @WideMouthFrog

For people that don't know, gas is a major part of the process to extract the NdPr. And Arafura would take up around 50% or more of the whole State's gas supply. It could even be more.

So for them to make this annoucement of increased supply, is a great insight to what the Aust Govt expects in terms of FID for ARU...ie ARU will get its finance (or JV) and move forward into constrcution.


It would be interesting to understand the timeline it takes to build this gas pipeline to match with when it is required onsite at Nolans.

 

[John]

Solid research and analysis as usual, appreciate the time you input to arrange and share information, thank you!

Happy "Wide Mouth Frog" has found a new home

REEx Forum feels more like his natural habitat. ;-)

Although we do encourage all wildlife....