Australia has made a groundbreaking investment in rare earths with the nation’s first combined mine and refinery in the Northern Territory.
The Albanese government on Thursday announced up to $840 million for the project that will be operated and managed by Australian exploration company Arafura Rare Earths.
“This project is a major vote of confidence in the Northern Territory, which continues to punch above its weight in global trade,” Prime Minister Anthony Albanese said.
NT Chief Minister Eva Lawler said the mining and processing of critical minerals was a priority for the territory to create more local jobs.
Located 120km north of Alice Springs, the Gina Rinehart-backed Arafura project will create more than 200 jobs during construction and more than 125 ongoing jobs, including 20 per cent for the Indigenous community.
Australia has some of the world’s largest deposits of critical minerals and rare earths which are in demand for the energy transition, defence and advanced communications.
Resources Minister Madeleine King said the rare earths will be used in electric vehicles and in super strong magnets for wind turbines and other green technology.
“Importantly Australia just needs to be using its minerals and processing them here for ourselves as a nation to be able to make more things but also for our international partners,” she said.
The financing includes $495 million from the $4 billion critical minerals facility, $200 million from Northern Australia infrastructure funding, up to $115 million from Export Finance Australia and $30 million as a modern manufacturing grant.
The package is expected to unlock further private sector investment as trading partners seek to lock in reliable supplies and follows a significant financing deal for emerging lithium producer Liontown Resources.
Meanwhile, Western Australian battery minerals producer Liontown Resources – in which Rinehart, Australia’s richest woman, has a nearly 20 per cent stake – has secured a $550 million liquidity investment for its Kathleen Valley lithium mine, which is expected to fund the project through first production and ramp-up to 3Mtpa.
Located 680km north-east of Perth in the Goldfields-Esperance region of Western Australia, the Kathleen Valley lithium mine is set to be one of the world’s largest and highest-grade hard rock lithium deposits.
Forecast to be able to produce approximately 500kt of six per cent lithium oxide concentrate per year, production will start in June with an initial 2.5 million tonnes per annum (Mtpa), before ramping up to 3Mtpa while Liontown completes a review of a proposed 5Mtpa expansion.
Backing development, construction, and initial production is a $550 million debt facility signed with a syndicate of leading international and domestic commercial banks and government credit agencies, including the Australia’s government-owned Clean Energy Finance Corporation (CEFC), which committed up to $110 million.
Also included in the syndicate of lenders is Australia’s export credit agency, Export Finance Australia, which will contribute $120 million, as well as commercial lenders the Commonwealth Bank of Australia, National Australia Bank, and Societe Generale.
The design of the Kathleen Valley lithium mine is based on a low-carbon approach with a 46MW hybrid generation operation consisting of 30MW of wind and 16MW of solar PV.
A 17MW/19MWh battery energy storage system, as well as synchronous condensers to provide critical system stability and resilience, will help ensure the mine can be powered by at least 60 per cent renewable energy from the start.
The mine’s renewable power generation is described as the largest off-grid wind + solar + battery storage power station for a mining operation in Australia, and is being delivered by Zenith Energy, who received the contract in late-2022.
“Australia has an abundance of critical minerals and is already the world’s largest producer of spodumene,” said Rob Wilson, CEFC executive director for WA and resources.
“This investment strengthens Australia’s battery supply chain, which has a crucial role to play in our acceleration towards a net zero economy. Lithium is one of several key minerals that will underpin the global energy transition and is becoming a major export earner for Australia.”
Shares in Arafura remain in a trading halt as it seeks to emulate the success of Australia’s Lynas Rare Earths, which is the world’s biggest rare earths miner outside China.
Source: AAP with additional reporting by Joshua S. Hill
