Government backs REE explorers with billion-dollar funding

Arafura Rare Earths (ASX:ARU) and Liontown Resources (ASX:LTR) have secured $840 million and $550 million respectively in debt financing packages to progress both of its rare earths assets. 

Under the federal government’s $4 billion Critical Minerals Facility, Arafura’s debt finance package includes a US$125 million limited-resource senior debt facility and a $150 million limited-resource senior debt facility from the Northern Australia Infrastructure Facility, which will be put towards accelerating the development of its Nolans Project in the Northern Territory. 

Arafura, which has a market capitalisation of $340.76 million, will provide further details about the project funding arrangements for the development of Nolans as and when credit approved commitments are received from additional lenders for the entire indicative and target debt facilities. 

Managing Director and Chief Executive Officer (CEO) Darryl Cuzzubo says: “Gaining this level of support from the Commonwealth government is a critical milestone in becoming a globally significant producer of neodymium-praseodymium, a product essential for electric vehicle and wind turbine manufacturers to achieve future growth targets as part of the energy transition.”

Meanwhile, Liontown Resources has entered into a $550 million debt facility agreement for the production of its Kathleen Valley Lithium Project in Western Australia. 

Liontown, which has a market capitalisation of $3.38 billion, says the funding will support the company ramp up production to 3 million tonnes per annum base case. 

Managing Director and CEO Tony Ottaviano says: “Having this funding in place provides strong endorsement for our project and a platform of financial certainty from which to move forward. 

We are consequently well-positioned to deliver the remaining milestones to first production mid-year and ramp-up towards anticipated positive cashflow.”

The federal government views both companies’ projects as ‘ground-breaking’ investments that will position the nation as a global leader in ethical and sustainable manufacturing of rare earths. 

Minerals Council of Australia CEO Tania Constable says the government supporting these projects addresses the need for diversification and security of supply chains, as well as leveraging Australia’s unparalleled resources and mining expertise. 

“With critical minerals essential to global economic development but geographically concentrated, Australia is well placed to extract and produce these high performance minerals. 

As the world moves swiftly to secure reliable sources of critical minerals, support for these projects is timely and strategic, ensuring that Australia continues to strengthen its position as a key player in the global transition to clean energy and advanced technological development.”

Arafura’s Nolans project encompasses a mine, process plant, and related infrastructure to be constructed and located at the site, which sits 135km north of Alice Springs. 

Liontown Resources is an ASX100 company focused on battery metals. The company’s Kathleen Valley project lies in an established mining region about 60km north of Leinster and 680km north-east of Perth. 

Write to Aaliyah Rogan at Mining.com.au   

Images: Arafura Resources
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Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.