Who is potentially going to JV with ARU?

John

John

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So it was announced in the Quarterly that ARU has been approached about doing a Joint Venture.

This has a benefit to shareholders, because there would be less dilution, and you also get a partner that brings something to the venture.

Now that is a good place to start. What would ARU want in a JV partner.....

- Money
- Rare earth experience
- General mining experience
- Downstream
- Government

So if we look at each of these...who could they be:

Money Focused
This could be some type of fund. So the following are some of the bigger ones with a mandate for rare earths....
  • Qatar Investment Authority (QIA) - These guys are very very active..and fits their business model.
  • Japan Investment Corporation (JIC) - Were aligned with Lynas...but maybe this is changing? But seems like a low probablity.
  • Korea Investment Corporation (KIC) - Maybe...but they already have commited money/support through their agencies...don't think they would do much more?
  • Saudi Arabia’s PIF - Very active in this space too.....
  • U.S. International DFC Development Finance Institution - Maybe...but they would probably just invest money....doubt a JV.
  • National Reconstruction Fund Corporation (NRFC) -

There could also be some type of super fund - my bet would be Australian Super. They seem to be making big plays across lots of ASX miners.

Rare Earth Focused
Well I don't think they would JV with any other junior....so it has to be someone producing....so that narrows the list....
  • Lynas (Don't think this is likely...why does Lynas need ARU? They don't need feed stock?)
  • MP Materials (MP is an interesting one....there could be synergies....but I think MP have their own issues at the moment, I don't think this is likley)
  • Serra Verde (This is actually a possibility. Their experience would be great. They coud send their concentrate to ARU (bit of a logistics issue...but just like Lynas)...
  • ?
General Mining Focused
So this is bascially a big boy wanting to buy their way in.
  • BHP Group - This is def possibility
  • Rio Tinto - Same with Rio
  • Glencore - Same
  • Vale S.A. - Same
  • Freeport-McMoRan - Same
Given Arafura's CEO previously wSorked at BHP...that would be the front runner if one of the big boys want some RE exposure.

Downstream Focused
So this is most likely a magnet producer
  • POSCO is the most likley. I heard they don't usually do equity type deals. So that has been the sticking point. So maybe a JV is the way they want to move forward?
  • Proterial, Ltd. (Hitachi Metals) - I would have thought they would have relationships with Lynas...so prob not.
  • Shin-Etsu Chemical Co., Ltd. - Same as Proterial.
  • VACUUMSCHMELZE GmbH & Co. KG Germany - This would be left field.....
  • Neo Performance Materials Canada - Maybe...but probably left field
  • Electron Energy Corporation USA - again...left field...
  • Siemens Gamesa / Siemens Energy - This could be a possiblity.
  • Hyundai & Kia (Hyundai Motor Group) - They already have their Korean Govt committed.....not sure they would go this far?
Government Focused
So i'm not sure how this would work...but jsut throwing it in here
  • Australian Govt - Maybe they have just said...we are buying in with the debt, equity and buying product....might as well just JV. But again...not sure how that would work. So low probablity
  • USA Govt - Again....how would it work? But also I don't think Trump would allow anything until they have done their 180 day review of the sector..

So given all of the above the likely ones are (in my order of liklihood:
- BHP
- POSCO
- Serra Verde
- Qatar Investment Authority
- Saudi Arabia’s PIF


What do others think? @patarnoster ?
 
Fantastic write up, you got the majority of the players.

I was thinking maybe Hancock, could be how they pivot their business without buying a REE project directly.

Woodside could another, FMG is a stretch, aside from that, I’ll have a bit of a snoop to find more.
 
Could Iluka Resources be a dark horse JV partner for Arafura? Possibly as a short- to mid-term processing solution. With its government-backed Eneabba refinery nearer to completion than Nolans' and designed to accept third-party feedstock (assuming there for they can process Nolans' ore).

Iluka could help fast-track Nolans’ rare earth output while Arafura builds its own on-site processing plant. This kind of partnership could bring early revenue for Arafura and fill part of Iluka’s refining capacity. It’s speculative, of course, but the strategic fit is there, Aus Gov has an interest in both so it could be a win-win that helps both companies move faster.
 
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JVP73 said:
Could Iluka Resources be a dark horse JV partner for Arafura? Possibly as a short- to mid-term processing solution. With its government-backed Eneabba refinery nearer to completion than Nolans' and designed to accept third-party feedstock (assuming there for they can process Nolans' ore).

Iluka could help fast-track Nolans’ rare earth output while Arafura builds its own on-site processing plant. This kind of partnership could bring early revenue for Arafura and fill part of Iluka’s refining capacity. It’s speculative, of course, but the strategic fit is there, Aus Gov has an interest in both so it could be a win-win that helps both companies move faster.
Click to expand...

Interesting thought.

Lets look at what Iluka would have to do, they would have to bascially reengineer their processing plant (that is being built) to cater for Nolans ore type/complexity. I think the design work alone would take about 6-12 months (at least). And then to build it. Then ARU would also need to do a bunch of work about how they change their processes/assets on site to transport the ore etc. And they would be transporting alot of it. Would it be economic?

Given the time to design/change both their plants/assets, i can't see how it would benefit either party.

But the technical 'know how' might be of benefit.....but again...most of this is subcontracted out to the big engineering design firms....that is where the real knowledge is.


If I was to bet....it is either a Soverign Wealth Fund....or BHP.
 
Honestly don't know too much about the processing capability of the Enneaba plant, I thought as ILU would take external feed supply, they could process, perhaps not all the way to an oxide though and that this would help Aus Gov stockpile sooner. Always happy to be wrong when speculating :)

Has BHP come out and said they want to invest in RE? I know RIO has.
 
JVP73 said:
Honestly don't know too much about the processing capability of the Enneaba plant, I thought as ILU would take external feed supply, they could process, perhaps not all the way to an oxide though and that this would help Aus Gov stockpile sooner. Always happy to be wrong when speculating :)

Has BHP come out and said they want to invest in RE? I know RIO has.
Click to expand...

I think they have some generic "Critical minerals" jargon in their decks.

It is more the relationship of DC and BHP. I think maybe he has been talking with them? Pure speculation of course.
 
They are all great ideas above, and completely valid. Here’s my guess.

A few key considerations—because every decision must pass the pub test.

When looking at a JV partner, excluding the Australian Government - who is very likely - also plausible and really should be the most likely candidate, but not addressed here.

The government has already committed over 50% of the funding from public resources. This means any JV partner must be both ‘reputable and strategically aligned. i.e. what does the partnership give the Australian people considering the major source of funding?

Imagine if, tomorrow, they announced funding for a project that supports Saudi interests, securing offtake and producing magnets. How does that serve Australia? National security? Unlikely. Sale of magnets back to Australia? Not happening. So where’s the real value? I don’t see the synergies so clearly.

Gina? A risky marketing move—handing her the full project debt could be contentious. The same goes for BHP, RIO, Korea, (I recall a letter I wrote to the board of ARU about 18 months ago- all saying, why are we as a country supplying the entire funding, and then handing the value to Korea to capture all the upside), or any other major player.

There has to be a win - win, and given the ex-China supply scarcity, I felt the executive 18 months ago, didn't value ARU worth or essentially recognise the strategic importance of their product, and were giving away the opportunity, just to get runs on the board. When you do a deep dive, Ex-China product is scarce (and the word critical does not do it justice) and so it should value accordingly. That’s economics and the ‘right time and the right commodity’.

From a marketing perspective, the only viable partner I can see is the U.S.
They don’t just ‘want‘ offtake, they ‘need’ it. It’s a make-or-break moment for them—and for us.

China is so far ahead that the national security and productivity battle is nearly lost.

So, what’s the sell? National security. Strategic partnerships. Magnet-driven bots, AV, and military applications.

This is Australia’s chance to be part of a new industrial era. Without us, the West falters, the U.S. crumbles. Now *that* is a narrative that sells.

There may be other options, but this must be a full-scale marketing play that stands up to scrutiny.

I’m open to ideas—but so far, all I’m seeing are potential partnerships, not compelling narratives that can sell this to the Australian electorate.
 
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Additionally,

Recently, Peter Sherrington (CFO of ARU) was a guest speaker at a conference in the US only 60 minutes from Mountain Pass - coincidence?

Or other ideas to consider for JV if looking at the US idea. Here are potential JV models for each of these strategic partners:

1. MP Materials (Mountain Pass Mine, CA) – Rare Earth Processing JV
- Model: A joint refining and processing facility for Arafura’s NdPr material in the U.S.
- Structure: Arafura supplies raw material, MP Materials refines and distributes within the U.S. supply chain.
- Strategic Value: Strengthens U.S. defense and EV supply chains, reduces reliance on China.
- Challenges: Need for processing infrastructure, possible regulatory hurdles.

2. Albemarle Corporation (Charlotte, NC) – Specialty Materials JV
- Model: Arafura and Albemarle form a joint venture to secure NdPr supply for lithium-ion batteries and magnets.
- Structure: Long-term offtake agreement with co-investment in processing technology.
- Strategic Value: Expands battery material security, opens doors for EV partnerships.
- Challenges: Albemarle’s primary focus is lithium**, making rare earth collaboration secondary.

3. Tesla (Austin, TX) – EV Magnet Supply JV
- Model: Arafura partners with Tesla to supply high-purity NdPr for EV motor production.
- Structure: Tesla invests in rare earth refining capacity, securing direct access to Arafura’s supply.
- Strategic Value: Strengthens Tesla’s supply independence, supports scaling of EV production.
- Challenges: Tesla prefers direct mineral contracts rather than equity JVs.

4. NextEra Energy (Juno Beach, FL) – Renewable Energy Magnet JV
- Model: Arafura co-develops a rare earth supply hub for wind turbine magnets.
- Structure: NextEra commits capital investment, securing NdPr for renewable energy growth.
- Strategic Value: Strengthens the wind energy sector, aligns with clean energy incentives.
- Challenges: Rare earth pricing volatility may impact long-term commitments.

5. U.S. Department of Energy (Washington, D.C.) – Strategic Defense JV
- Model: Arafura enters a government-backed JV to process rare earths in North America.
- Structure: The DOE provides funding, grants, or tax incentives for refining.
- Strategic Value: Strengthens national security, supports AUKUS-linked defense contracts. As outlined by Madeleine King
- Challenges: Requires government approvals, aligning with U.S. security interests.

Among these, MP Materials and the DOE are most likely JV candidates if using my view on marketable to the Australian electorate.
 
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