Australia-based Arafura Rare Earths Ltd has struck a five-year offtake agreement with wind turbine manufacturer Siemens Gamesa Renewable Energy, supplying 200 tonnes per annum (tpa) of key elements neodymium and praseodymium (NdPr) from the Nolans project in the Northern Territory.
This deal is set to increase NdPr to 400 tpa when the Nolans Project, commencing in 2026, achieves nameplate production capacity, the company revealed in an ASX announcement.
Under the agreement, the NdPr from Nolans will be utilised in the construction of permanent magnets for offshore wind turbines put together at Siemens Gamesa’s Cuxhaven production facility in Germany.
The said facility is where all parts for the hub, generator, and backend are put together into the turbine before being shipped globally.
With the signing of this second offtake deal, the ASX-listed company said over 53 per cent of the projected 85 per cent yearly production from Nolans has now been contracted under long-term sale contracts.
Gavin Lockyer, the managing director of Arafura, commented on the Offtake deal, expressing his excitement to have finished discussions for the company’s second offtake deal.
“Siemens Gamesa is the world’s leading manufacturer of offshore wind turbines, and this agreement compliments our strategy to create supply diversification into the renewable & E-mobility sectors,” Lockyer explained.
The offtake agreement will assist continuing negotiations with German ECA Euler Hermes, which recently gave Arafura a non-binding letter of in principle support for an untied loan guarantee of up to USD 600 million to support the Nolans Project.
The Arafura Nolans Project in the Northern Territory is a rare earth ore to oxide mining and processing facility.
The project will be Australia’s first vertically integrated rare earths operation, with single-site mining and processing operations (including waste disposal), providing a secure and traceable supply chain to meet domestic and international economic and security interests, as well as global customers’ ESG needs.
The ASX-listed company said the recent appointment of KfW IPEX-Bank as an additional mandated lead arranger and ECA structuring bank for the Project’s debt financing is in line with Arafura’s offtake strategy to target original equipment manufacturers from geographical areas known to have supportive Export Credit Agencies (ECAs).
