Arafura Rare Earths (ASX:ARU) has signed an expanded offtake agreement with Traxys Group’s US subsidiary, increasing the volume of neodymium-praseodymium (NdPr) oxide supply from its Nolans Project in Australia.
Under the binding agreement, Arafura will supply Traxys North America with 850 tonnes of NdPr oxide annually, a 70% increase from the 500 tonnes outlined in their original term sheet signed in May 2026.
The agreement will run for five years, with an option to extend for another two years by mutual consent.
The original term sheet also included potential supplies of 7.5 tonnes of dysprosium-terbium (DyTb) oxides annually.
The expanded deal marks another milestone for Arafura as it advances the Nolans Project in Australia’s Northern Territory. Nolans aims to meet approximately 5% of global rare earth demand.
Located about 135km from Alice Springs, Nolans is being developed as Australia’s first fully integrated ore-to-oxide rare earth operation, comprising a mine, beneficiation, extraction and separation plants, and supporting infrastructure.
Construction officially began earlier this month, with first production expected in mid-2029.
US supply chain ambitions
The rare earths supplied under the agreement are earmarked for the US Government’s Project Vault initiative to create a strategic reserve of critical minerals and insulate American manufacturers from foreign supply disruptions.
Traxys is currently one of three designated commodity trading and procurement companies selected to source and manage raw materials for the program.
The agreement comes as the US seeks to reduce its reliance on China for rare earths. These metals are essential for permanent magnets used in defence equipment, electric vehicles, and advanced technologies.
Strong backing for Nolans
Arafura has also secured significant support within Australia.
Through its $1.2 billion Critical Minerals Strategic Reserve, the Australian Government has committed to purchasing 500 tonnes of NdPr oxide annually from Nolans.
Hancock Prospecting, the private mining company controlled by Australian billionaire Gina Rinehart, is also a major shareholder in Arafura with a 17.5% stake.
Meanwhile, Arafura says it remains in discussions with several other parties over potential offtake agreements as it works towards bringing Nolans into production.
Write to Jackson Chen at Mining.com.au
Main image: Arafura Rare Earths
