Arafura Rare Earths has executed an offtake agreement with Traxys Europe, a global minerals trader based in Luxembourg, for the sale of NdPr oxide from Arafura’s Nolans Project in Australia. Contract volume is 100 tons annually over five years, with further volume of 200 tons per year at the option of Arafura to increase to a maximum of 300 tons per year.
The agreement is binding subject to conditions being satisfied by the end of 2028 that are related to the startup nature of the minerals project. They include completion of construction and development, commencement of commercial production and ramp-up. The volume represents 8% of Arafura’s target for locking in sales of the offtake from Nolans.
Traxys specializes in marketing metals and minerals and has a long history of involvement in the rare earths sector. It provides a channel to place Arafura product with participants in the magnet supply chain who may otherwise be unable to commit to long-term offtake commitments or may not be considered as a bankable offtake partner by Arafura’s lenders for the purposes of project financing.
“This agreement with Traxys moves us closer to achieving our offtake target of 80 percent,” said Darryl Cuzzubbo, managing director of Arafura. “With only 34 percent of the product from Nolans remaining to be marketed our ongoing negotiations means we are well-positioned to reach this target.”
“We are pleased to enter into this offtake agreement with Arafura as we continue to diversify our supply sources of rare earths. The Nolans deposit is an attractive Western source of NdPr and we are looking forward to this exciting opportunity,” said Gregoire de Beco, vice president noble alloys and rare earths at Traxys. The company is a physical commodity trader and merchant in the metals and natural resources sectors. Its logistics, marketing, distribution, supply chain management and trading activities are conducted by over 450 employees in over 20 offices worldwide. Annual turnover is in excess of $10 billion.
The agreement complements Arafura’s offtake strategy to target original equipment manufacturers from geographic regions with supportive export credit agencies. Earlier deals have been struck with automaker Hyundai and Kia in Korea for 1,500 tons per year which amounts to 43% of the offtake target, and with wind turbine manufacturer Siemens Gamesa Renewable Energy in Germany for 520 tons per year which amounts to 15% of the target. For more info, see www.arultd.com and www.traxys.com.
