Arafura Rare Earths Locks in Indian Offtake Deal for Nolans

Highlights

• Arafura Rare Earths (ASX:ARU) has signed a binding term sheet to supply magnet-feed rare earth elements to an Indian manufacturing venture.
• The agreement follows completion of site reinstatement work at the Nolans rare earths project in the Northern Territory ahead of a planned construction restart.
• Government-backed financing proposals remain a key milestone as the company works to complete funding for project development.

Australia's critical minerals sector continues to strengthen its global position after Arafura Rare Earths (ASX:ARU) secured another commercial milestone for its flagship Nolans project. The company has entered into a binding term sheet to supply magnet-feed rare earth elements to an Indian industrial group's manufacturing venture, expanding its future customer base while supporting India's growing ambition to establish domestic permanent magnet production.

The agreement comes as Arafura advances preparations for construction at Nolans, with financing and project execution now becoming the primary focus.

Indian Offtake Expands Commercial Footprint

The new agreement covers future supply of key magnet rare earth elements including neodymium, praseodymium, dysprosium and terbium.

Pricing under the proposed arrangement will reference an internationally recognised seaborne benchmark rather than relying on a single domestic pricing mechanism. The agreement remains subject to final documentation and the buyer receiving formal recognition under India's manufacturing incentive programme.

The structure reflects an increasing preference across the rare earths industry for diversified pricing frameworks that reduce reliance on any single regional market.

India Emerges as a Growing Rare Earths Customer

India has been actively encouraging domestic magnet manufacturing as part of its broader industrial development strategy.

Permanent magnets play an essential role across electric vehicles, renewable energy systems, industrial automation and defence technologies. Building domestic manufacturing capability requires secure access to rare earth feedstock, creating opportunities for suppliers outside traditional markets.

For Arafura, establishing an early commercial relationship with an Indian customer broadens future demand beyond established Asian supply chains while supporting customer diversification.

Nolans Moves Closer to Construction

The commercial milestone coincides with further progress at the Nolans project in the Northern Territory.

Arafura has completed site reinstatement activities following its final investment decision, positioning the project for a construction restart once remaining financing requirements are satisfied.

Nolans is designed as an integrated mining and processing operation capable of producing separated rare earth products domestically, supporting Australia's strategy of developing more value-added critical minerals processing capacity.

The project's Northern Territory location also aligns with broader government initiatives supporting strategic critical minerals developments across northern Australia.

Funding Remains the Key Milestone

Attention now turns to the company's upcoming shareholder meeting, where investors will consider several funding proposals involving government-supported financing partners.

The proposals include equity investments and convertible note arrangements involving export credit agencies, development finance institutions and government-backed investment funds.

Securing these funding arrangements would significantly reduce uncertainty surrounding the project's capital requirements and provide greater confidence around the planned construction timetable.

Government-supported financing has become increasingly common across the global critical minerals sector as countries seek to diversify strategic supply chains.

Rare Earths Sector Continues to Evolve

The broader ASX Rare Earth Minerals sector has increasingly rewarded companies capable of demonstrating three important milestones:

• Binding customer agreements
• Construction readiness
• Credible financing pathways

Arafura has continued progressing across each of these areas, strengthening the commercial profile of the Nolans development while positioning itself among Australia's more advanced rare earth project developers.

Growing demand from electric vehicles, renewable energy infrastructure and defence applications continues supporting long-term interest in diversified rare earth supply outside traditional processing centres.

Why Nolans Matters

Unlike many earlier-stage exploration companies, Nolans has already progressed through significant permitting, engineering and development work.

The combination of an approved development pathway, construction readiness and international customer agreements distinguishes the project within Australia's rare earth development pipeline.

Successfully bringing Nolans into production would further strengthen Australia's role in supplying critical materials required for permanent magnets and advanced manufacturing industries.

What Comes Next?

Investors and industry participants are likely to monitor several upcoming milestones closely, including:

• Shareholder approval of proposed financing arrangements.
• Final execution of documentation supporting the Indian offtake agreement.
• Confirmation of construction timing at the Nolans project.
• Additional commercial agreements with future international customers.

Each milestone would further strengthen the project's path toward eventual production.