Arafura Rare Earths (ASX: ARU)has secured conditional Commonwealth Government approval for a debt financing package of US$533 million to progress its strategically important Nolans Project in the Northern Territory.
The Commonwealth Government approvals are part of a broader financing package Arafura is currently progressing, which Arafura currently has indicative interest from international and commercial financiers for a further US$550 million of senior debt facilities.
The Commonwealth debt finance package includes a US$125 million limited-recourse senior debt facility under the Commonwealth Government’s A$4 billion Critical Minerals Facility (CMF) (administered by Export Finance Australia (EFA)) and A$150 million limited-recourse senior debt facilities from the Northern Australia Infrastructure Facility (NAIF). Both facilities have a 15-year tenor with interest rates and conditions precedent to financial close customary to arrangements of this nature.
EFA will also provide a subordinated Standby Liquidity Facility (SLF) of up to US$200 million under the CMF to help manage any increases in capital expenditure and operating costs incurred during ramp up. Export Finance Australia also has conditional approval to provide further funding of up to US$75 million on its Commercial Account to participate in the ECA covered tranches and Cost Overrun Facility (COF). NAIF has agreed to provide additional funding up to A$50m via a proportion of the COF.
“Securing debt facilities of US$533 million from EFA and NAIF is a critical achievement for the Nolans Project and signifies its economic importance to Australia and the Northern Territory,” Managing Director and CEO, Darryl Cuzzubbo, said.
“Gaining this level of support from the Commonwealth Government is a critical milestone in becoming a globally significant producer of NdPr, a product essential for electric vehicle and wind turbine manufacturers to achieve future growth targets as part of the energy transition.
“Being able to secure these debt terms reflects the quality of the Nolans Project. It brings us significantly closer to making a final investment decision and contributing to a lower carbon future.
“We are thrilled to be in partnership with EFA and NAIF, other government stakeholders, our customers and communities to create jobs and economic opportunities for many decades to come.”
