Arafura Rare Earths has received commitments to raise $350 million through an institutional placement, adding further weight to the company’s transition from a rare earths hopeful to a construction-stage developer.
The raise comes shortly after Arafura’s board made a final investment decision (FID) on the Nolans rare earths project in the Northern Territory, a milestone that has shifted one of Australia’s most closely watched critical minerals projects from strategic promise into delivery.
The commitments will be received through a two-tranche institutional placement of approximately 1.35 billion new fully paid ordinary shares at an offer price of $0.26 per share. Tranche one is expected to raise about $175.5 million, while tranche two, which remains subject to shareholder approval, is expected to raise about $174.5 million.
The placement was supported by new and existing institutional investors, including Arafura’s largest shareholder, Hancock Prospecting, which has committed to subscribe for about $85 million, or approximately 326.9 million new shares, in the placement.
Following completion of tranche two, Hancock is expected to hold an interest of about 17.5 per cent in Arafura, before any shares are issued under the share purchase plan or to cornerstone investors.
For Arafura, the raise adds to a broader financing, offtake and government-support platform that has been built around Nolans over recent months, including support involving Export Finance Australia, the National Reconstruction Fund Corporation and the German Raw Materials Fund.
Upon settlement of the placement and cornerstone investor commitments, including EFA, GRMF and NRFC, Arafura expects to have a pro forma cash balance of about $1.341 billion, before costs and excluding any proceeds raised under the share purchase plan.
Arafura chief executive officer and managing director Darryl Cuzzubbo said the strong support received for the capital raising was a “clear endorsement” of the Nolans project and Arafura’s role in building a “diversified, Western rare earths supply chain”.
“With this successful result and the Board’s recent Final Investment Decision, we look forward to commencing construction of this nationally significant project, which we are targeting for around September 2026,” he said.
That construction target is central to the next stage of Arafura’s story, with Nolans positioned to become Australia’s first fully integrated ore-to-oxide rare earths operation, with the project designed to retain more of the rare earth value chain domestically than a conventional mining and concentrate export model.
The project is expected to support more than 600 construction jobs and about 350 ongoing operational roles, while Arafura has previously said Nolans could contribute $25.2 billion to the Northern Territory economy over its 38-year mine life.
The broader strategic case for Nolans rests on its capacity to produce neodymium-praseodymium oxide outside China, at a time when governments and manufacturers are seeking more diversified supply chains for rare earths used in electric vehicles, wind turbines, advanced manufacturing and defence technologies.
Commercially, Arafura has also built a customer base around the project. Existing arrangements include offtake relationships with Hyundai, Kia, Siemens Gamesa and Traxys, while previous government and customer support mechanisms have represented a large portion of the company’s targeted binding offtake volume.
Hancock executive chairman Gina Rinehart said Hancock Prospecting was pleased to support development in the Northern Territory and Arafura’s next phase.
“Hancock Prospecting is pleased to support development in the Northern Territory, and support Arafura with additional investment to enable the start of construction of the Nolan’s Bore rare earths project, which will play a vital strategic role in the global critical minerals supply chain,” she said.
Arafura is also undertaking a share purchase plan targeting about $25 million at the same offer price as the placement.
The SPP, tranche two of the placement and director participation are expected to be considered at an extraordinary general meeting scheduled for July 2, with settlement of tranche two expected on July 8 if shareholder approval is obtained.
For Nolans, the question is now about shifting, moving from questions on whether the project can attract strategic interest, to whether Arafura can convert that support into construction delivery, commissioning and a durable rare earths supply chain outside China.
