Complementing its offtake strategy, Arafura Rare Earths Limited continues to receiving strong interest from various parties.
Arafura Rare Earths Limited (ASX: ARU)
Arafura Rare Earths Limited (ASX: ARU) has entered into a binding offtake agreement with Traxys Europe SA for the sale of neodymium-praseodymium (NdPr) oxide from its Nolans Project in Australia. Under the terms of the agreement, Arafura will supply a minimum of 100 tonnes per annum (tpa) of NdPr oxide to Traxys over five years, with an option to increase the volume to a maximum of 300 tpa. This arrangement enables Arafura to manage its supply commitments flexibly while accommodating variability in product delivery schedules.
The agreement with Traxys is a key milestone in Arafura’s strategy to secure binding offtake agreements for 80% of Nolans’ planned annual production of 4,440 tpa of NdPr oxide. The Traxys deal alone represents up to 8% of this target. Arafura has already secured agreements with major global companies, including Hyundai, Kia, and Siemens Gamesa, covering 66% of its offtake target, with negotiations ongoing for the remaining volume.
Traxys, a Luxembourg-based global metals and minerals trading company, will market NdPr oxide from Nolans to diversify global supply chains and enhance resilience in the rare earths sector. This partnership provides Arafura with access to a broader range of magnet supply chain participants who may not be able to commit to long-term offtake contracts but still require stable access to rare earth materials. Furthermore, Traxys’ involvement supports Arafura’s efforts to align with export credit agencies and ensure a diversified customer base.
The agreement is structured with pricing based on the NdPr Ex Works China Price and includes a five-year term, with volume flexibility determined annually by Arafura. The contract is binding, subject to conditions precedent, including the completion of construction and development at Nolans, the commencement of commercial production, and the project’s ramp-up phase, all of which must be met by 31 December 2028. The NdPr oxide supplied under the agreement must meet strict specifications, including a total rare earth oxide (TREO) purity of at least 99.0%.
Arafura emphasized that the agreement with Traxys marks significant progress toward achieving the company’s offtake target and highlights the strategic importance of Nolans as a reliable rare earths source from a Tier 1 jurisdiction like Australia. He noted that securing buyers for 66% of planned production and actively negotiating the remaining 34% demonstrates strong demand for Arafura’s product.
Traxys’ Vice President for Noble Alloys and Rare Earths, Gregoire de Beco, expressed enthusiasm for the partnership, describing Nolans as an attractive Western source of NdPr oxide and reaffirming Traxys’ commitment to diversifying its rare earth supply portfolio. As a global commodity trader with an annual turnover exceeding USD 10 billion, Traxys plays a crucial role in sourcing, marketing, and distributing industrial raw materials while adhering to internationally recognized environmental, social, and governance (ESG) principles.
The agreement reinforces Arafura’s commitment to developing a sustainable, globally competitive rare earths supply chain. By securing key partnerships with industry leaders, the company is advancing its goal of becoming a significant supplier of critical minerals for the global clean energy and advanced manufacturing sectors.
(Source: Company's Report)
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