A Gina Rinehart-backed rare earths miner will build its flagship project with help from the federal government to ease China's stranglehold on the sector.
Arafura Rare Earths has made the final investment decision to build its Nolans Project in the Northern Territory, which will be Australia's first fully integrated ore-to-oxide rare earths operation.
The decision came after years of building offtake relationships with companies, including Hyundai, Kia, Siemens, and as the miner became the first company to secure support under a federal government plan to build a rare earths strategic reserve.
China mines more than half the world's rare earths but refines as much as 90 per cent of global production.
Rare earths contain essential elements and alloys that are key to modern technologies with applications in defence and renewable energy.
These relationships with buyers and the government were not transactional in nature, Arafura managing director and CEO Darryl Cuzzubbo said.
"They reflect a shared recognition that the diversification of global rare earth supply chains is an imperative, not merely an opportunity," he said in a statement.
"The Australian government has taken a decisive and proactive approach, developing an economic toolkit that supports the rare earths sector in the near term that will deliver independent and functional markets into the future."
The miner's decision to proceed was one of a limited number globally capable of producing Neodymium-Praseodymium oxide - an alloy crucial to producing permanent magnets - outside of China.
The project's green-lighting showed how recent reforms to the Strategic Reserve and Export Finance Australia (EFA) were translating policy into practical outcomes, Minerals Council chief executive Tania Constable said.
"Australia has globally significant critical mineral resources, but bringing projects online – particularly in rare earths – requires navigating opaque markets, long development timelines and concentrated supply chains," she said.
Arafura, in which Ms Rinehart's Hancock Prospecting holds a more than 15 per cent stake, has received roughly $1.2 billion in taxpayer support so far.
Nolans is expected to create 600 jobs during construction and sustain 350 permanent positions during steady-state operations as it adds a forecast $25.2 billion to the NT economy over a 38-year mine life.
