(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)
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