Australian rare earths company Arafura Resources and Chinese-based rare earths producer Shenghe Resources Holdings have signed an MoU with the objective of developing Arafura’s Nolans Rare Earths Project near Alice Springs in Australia’s Northern Territory.
Shenghe aims to utilize the development of the Nolans project as an opportunity for the international expansion of its existing Chinese-based rare earths business.
Under the terms of the MoU both parties will work together to achieve the following:
• Shenghe to conduct scheduled reviews of the Nolans project definitive feasibility study (DFS) which is being prepared by Arafura;
• Upon successful completion of the DFS Shenghe will be provided with the opportunity to co-fund development of the project;
• Arafura and Shenghe to examine opportunities for the sale and distribution of rare earth products to Shenghe’s existing customers;
• Arafura and Shenghe to continue to look for opportunities and initiatives to add to and build the strategic partnership to develop an international rare earths business; and
• Negotiate a framework agreement to formalize arrangements for the establishment of a long-term strategic partnership.
Shenghe is based in Chengdu on Sichuan province and is an industry leader in rare earths production and technology development. It is a Shanghai Stock Exchange listed public company and operates a rare earths processing plant in Leshan City. It markets specialty rare earths products to international and Chinese based customers.
Arafura believes the execution of the MoU will provide significant momentum assisting it to achieve its goal of making substantial reductions in the Nolans project capital costs and operating costs. With the ongoing support of Shenghe and its other strategic partners Arafura is confident it can advance the Nolans project towards sustainable financing and commercialization.