Car Manufacturers Interested in Australia’s Mineral Resources

by | 24. Sep 2021 - 11:53 | Market

Arafura Resources is negotiating with car manufacturers from Europe about the supply of rare earths.

If the EU Commission’s plan, unveiled in July this year, goes ahead, no car with an internal combustion engine should receive a new registration in the European Union from 2035. Car manufacturers now face a double challenge, because developing e-cars suitable for mass production until they are ready for the market takes time. In addition, large quantities of strategic raw materials such as rare earths are needed. However, the materials neodymium and praseodymium, which are important for the traction motors of zero-emission vehicles, come mainly from China. Looming tensions between the U.S. and China are repeatedly fueling concerns that market power could be exploited politically and supplies disrupted. Automakers are therefore looking for ways to diversify the supply chain.
As reported by Bloomberg news agency, several European car companies are in talks with Australian mining company Arafura Resources about supplying rare earths. These are mined in Australia’s Northern Territory. According to the company’s own information, the Nolans project, 135 kilometers north of Alice Springs, could cover a significant part of the world’s demand for neodymium-praseodymium.

In addition to mining, Arafura also handles on-site processing of the raw materials. For automakers, this makes it much easier to prove the material’s origin and compliance with sustainability standards, Bloomberg writes. From 2023, corresponding requirements for companies in the EU will come into force with the Supply Chain Act.
Talks with automakers are progressing, according to Arafura CFO Peter Sherrington, and contracts could be signed before the end of the year.

Photo: iStock/bennymarty

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