Arafura Rare Earths (ASX: ARU) has taken another step toward securing its global supply footprint, signing a binding offtake agreement with Traxys Europe SA for NdPr oxide from the Nolans Project. The deal covers a minimum of 100 tonnes per annum (tpa) over five years, with the option to increase to 300 tpa at Arafura’s discretion.
A Major Step Toward Offtake Targets
This agreement pushes Arafura closer to its goal of locking in binding commitments for 80% of Nolans’ annual production capacity of 4,440 tpa of NdPr oxide. With Traxys’ commitment, the company has now secured 66% of this target, alongside agreements with Hyundai & Kia (1,500 tpa) and Siemens Gamesa (520 tpa).
Managing Director Darryl Cuzzubbo welcomed the deal, highlighting its importance in diversifying global supply chains and reinforcing Nolans as a Tier 1 ESG-compliant rare earths project in Australia.
Why This Matters
- Flexible Supply Options: Arafura retains control over the supply volume, electing to deliver between 100 and 300 tpa per year based on market conditions and its production ramp-up.
- Strengthened Market Position: Traxys, a Luxembourg-based global metals and minerals trader, provides access to customers who might otherwise struggle to secure direct long-term contracts.
- Supporting Supply Chain Resilience: The agreement aligns with Arafura’s strategy to diversify its customer base, ensuring a steady flow of rare earths into the magnet supply chain, crucial for electric vehicles, wind turbines, and advanced electronics.
Next Steps for Nolans
The deal is subject to key conditions being met by December 31, 2028, including the completion of Nolans’ construction, commencement of commercial production, and production ramp-up. Arafura is still in negotiations for the remaining 34% of its offtake target, with strong interest from European, US, and Asian buyers.
Arafura’s Growing Rare Earths Portfolio
With the rare earths market heating up and major economies looking to reduce dependence on Chinese supply, Arafura’s Nolans Project is shaping up to be a key player in the global NdPr space. The company remains confident that its remaining offtake volumes will be locked in soon, further solidifying its position in the growing clean energy economy.
