Arafura Rare Earths Limited (ASX: ARU) has signed an offtake agreement with Siemens Gamesa Renewable Energy A/S.
The Offtake Agreement is for the supply of NdPr from the company’s Nolans Project in Australia’s Northern Territory to Siemens Gamesa over a five-year term (which may be extended for a further two years by mutual agreement).
Contract volumes (per Contract Year) for NdPr Metal are 200 tonnes per annum (tpa) commencing in 2026, increasing to 360tpa in year two and 400tpa in years three to five to align with ramp up of the Project.
The other key terms of the Offtake Agreement are set out below:
▪ Pricing (in $US) is contractual but broadly determined referencing the NdPr Ex Works China price per tonne.
▪ Commercial grade NdPr/Total Rare Earth (TREE) must be ≥99.0%.
▪ The Offtake Agreement is binding subject to certain conditions precedent being satisfied by no later than 30 September 2026, such as Arafura becoming eligible for Untied Loan Guarantee cover from UFK- Guarantees of the Federal Republic of Germany for the financing of a raw material project, completion of construction and development of the Project, commencement of commercial production and ramp up.
The NdPr from Nolans will be used in the manufacture of permanent magnets used in offshore wind turbines assembled at Siemens Gamesa’s Cuxhaven production facility in Germany, where all components for the hub, generator and backend are assembled into the turbine and then shipped globally.
This process aligns with Arafura’s offtake strategy to target original equipment manufacturers from geographic regions known to have supportive Export Credit Agencies (ECAs) and the recent appointment of KfW IPEX-Bank as an additional mandated lead arranger and ECA structuring bank for the Project’s debt financing.
The Offtake Agreement will support ongoing discussions with German ECA Euler Hermes, which recently provided Arafura with a non-binding letter of in-principle support for an untied loan guarantee of up to US$600M to support the Nolans Project.
The untied loan guarantee of up to US$600M is non-binding, indicative only and any final guarantee amount will be determined with reference to the offtake volume processed in Germany, final offtake structures with German companies and NdPr market conditions at the time.
Arafura currently anticipates first production of NdPr Oxide in 2025 with annual production expected to ramp up to 4,440tpa in 2028. These dates are dependent on a number of factors including securing remaining offtake agreements, securing funding on appropriate terms to develop the Project and successful construction, commissioning and ramp up of the Project.
“We are delighted to have concluded negotiations for our second offtake agreement. Siemens Gamesa is the world’s leading manufacturer of offshore wind turbines, and this agreement compliments our strategy to create supply diversification into the renewable & E-mobility sectors,” Arafura Managing Director, Gavin Lockyer, said.
About Siemens Gamesa Renewable Energy
Siemens Gamesa unlocks the power of wind. For more than 40 years, we have been a pioneer and leader of the wind industry, and today our team of more than 27,000 colleagues work at the centre of the global energy revolution to tackle the most significant challenge of our generation – the climate crisis. With a leading position in onshore, offshore, and service, we engineer, build and deliver powerful and reliable wind energy solutions in strong partnership with our customers.
A global business with local impact, we have installed 130 GW and provide access to clean, affordable and sustainable energy that keeps the lights on across the world. To find out more, visit www.siemensgamesa.com and connect with us on social media.
About the Nolans Project
Arafura’s Nolans Project is a rare earth ore to oxide mine and processing facility in the Northern Territory. The project is Australia’s first vertically integrated rare earths operation, where its single site mining and processing operations (including waste disposal) will provide a secure and traceable supply chain to meet domestic and international economic and security interests and the ESG needs of global customers.
Nolans has received Major Project Status from the Northern Territory Government (refer to ASX Announcement dated 31 July 2020) and has received support from Federal Ministers.
For further information please visit: https://www.arultd.com/
