UPDATE 2-Arafura Rare Earths gets $600 mln loan guarantee from German government

(Adds share moves at close, details on project, brokerage comment) March 29 (Reuters) - Australia's Arafura Rare Earths Ltd said on Wednesday it received a $600 million loan guarantee from German credit agency Euler Hermes Aktiengesellschaft to develop its Nolans project in Northern Territory. The non-binding arrangement is subject to Arafura entering supply deals with German-based firms, and corresponding quantities of neodymium-praseodymium (NdPr) products ultimately being processed in Germany into permanent magnets or powertrains. Neodymium-Praseodymium (NdPr) oxide is an element used in the making of electric motors for electric vehicles, and is prized by automobile companies making the green energy transition. "While preliminary in nature, if approved, this facility has the potential to fund ~50% of total financing requirements of A$1.8 billion for the Nolans Rare Earth Project," Canaccord Genuity analysts said in a note. Nolans can support mining and processing operations for 38 years at a designed capacity of 340,000 tonnes of concentrate production per annum, according to the company website. Arafura said the Northern Australia Infrastructure Facility would support an increase in funding for the project to A$150 million ($100.41 million) from A$100 million. The rare earths miner has a seven-year deal with South Korea's Hyundai Motor Co and its unit Kia Corp to supply up to 1,500 tonnes of a rare-earth oxide per year. Shares of the company closed flat in Sydney after hitting a one-week high earlier in the session, while the benchmark stock index rose about 0.2%.
($1 = 1.4939 Australian dollars) (Reporting by Ayushman Ojha and Savyata Mishra in Bengaluru; Editing by Sohini Goswami and Subhranshu Sahu)