Nolans nexus highlights Traxys traction

The owner of a large-scale Australian rare earths project that has assembled an impressive line-up of backers and sales channels opened important new avenues to market through its offtake deal with US-based Traxys, IMARC 2025 heard.

Arafura Rare Earths’ agreement with Traxys on up to 300 tonnes per year of neodymium-praseodymium (NdPr) oxide for five years from its proposed US$1.2 billion Nolans project in the Northern Territory added to larger offtake arrangements with Hyundai and Kia in South Korea and Siemens Gamesa in Germany.

Arafura plans to produce up to 4440tpy of NdPr oxide.

But the raw numbers bely the significance of its partnership with Traxys. CEO Mark Kristoff told IMARC the major US-based commodity trading group was a rare, long-term fixture in the increasingly critical international RE space.

“We’ve been in the rare earth business for 30 years, so long before many people knew what a rare earth was, and we've been committed to the space,” he said.

“We understand the really irreplaceable applications for many rare earths in our everyday lives.

“We have technical salespeople that understand what the end users are looking for. We can help [offtake partners] optimise their blend of raw material production.

“The way Arafura addressed it with a multi-pronged approach to different stakeholders, diversifying their sales outlets, and then coming to the realisation that a company like Traxys can provide a catch-all and expose them to another 25 different customers that they could not necessarily face on their own, has been noteworthy.

“Other companies that are thinking about this should think about developing partnerships that further protect the capital at risk that’s invested in their assets. Traxys is a bankable offtaker so the banks that are likely to provide project finance are going to be very happy to see us at the end of the cash recovery period, collecting the receivables and marketing the product in a thoughtful way.

“It really is about partnerships and finding the right partners that are bankable counterparties.

“We’d like a larger offtake from our partners and by delivering the results that I know we can deliver that's typically what happens. Shorter-term agreements can become lifetime agreements.”

IMARC heard new efforts to decouple global supply chains from a dominant source of rare earths and downstream products such as RE magnets – which has been China for the past two decades – were being made following the landmark public-private partnership between the US Department of War (DoW) and California RE producer MP Materials earlier this year.

A joint announcement by the US and Australian governments that they would explore opportunities to co-invest in Nolans under the US Australia Critical Minerals Framework signed in Washington, DC, pre-IMARC underlined the credentials of the project.

“Having resilient value chains is critical to underwriting industry and manufacturing,” Arafura CFO Peter Sherrington said at IMARC.

“The big thing the [US Australia CMF] does is it de-risks raising money for what are really quite challenging projects from an equity perspective. They’re very capital intensive.”

Kristoff agreed on the nature of the projects and said resilience would need to be a feature of expanded ex-China supply chains receiving increased government and other support in the face of security concerns and also fears about distorted markets.

“It’s really incumbent upon us as an industry to be able to execute and deliver that alternative supply chain availability,” he said.

“That’s why we look to partner with strong management teams and new deposits that are in search of capital surety and the ability to raise capital in a relatively speedy fashion.

“Many of the projects that are announced today will not get done because they don't have the fundamental resource characteristics that justify the investment.

“[But] the right projects with the right resources have a great likelihood of continued support from the private sector and the public sector.

“I think what we’ll also see is [more] collaboration between mine producers.

“What we have tended to miss in the [rare earths] dialogue is the midstream processing capability. You need to be able to process the separated rare earth oxide into the semi-finished product that goes to make the magnets. And we’ve got to develop that supply chain.

“I think you'll see governments liberalising the ability of companies to work together so the right projects will collaborate and build stable supply chain opportunities for industrial consumers.

“I think you’ll see some M&A.”

Kristoff said on an earlier IMARC panel discussion an “appropriate level of government protection” was clearly needed to rebuild long-term alternative supply chains feeding vital industries.

“The industries that we bring to bear have to be collectively profitable and in the lower quartile of the production cost curve if possible,” he said.

“They have to make sense. So you need smart people thinking about the projects but then you do need the government support. The Chinese have supported their industrial champions for years. So this is not something that the winners haven’t been doing.

“The West has failed miserably in providing capital for extractive industries, or perhaps transformational industries, and we have to fix that if we’re going to bring these solutions to bear.”