S. Korea Exim Bank: $150 Million for Arafura’s Nolan Project

by | 4. Dec 2023 - 09:15 | Economy

Letter of interest is tied to off-take agreements of rare earths between Arafura, Hyundai, and Kia.

Australian mining company Arafura is developing its Nolans rare earth mining and processing plant in the Northern Territory and continuously enjoys the support of new financing partners. Arafura has already tapped various sources to finance the project, for example, German credit insurer Allianz Trade. On Monday, the company announced signing a Letter of Interest (LOI) with the Export–Import Bank of Korea, also known as Korea Eximbank, for $150 million. Korea Eximbank is the official export credit agency of South Korea.

The LOI is directly tied to rare earth off-take agreements signed between Arafura and South Korean carmakers Hyundai and Kia. According to the company’s Managing Director, Gavin Lockyer, the LOI between EXIM Bank and Arafura deepens the relationship between the Asian country and the Australian miner. Lockyer said in a statement (PDF), “Arafura’s foundation offtake agreement with Hyundai and Kia was the beginning of a meaningful relationship with Korea, and our engagement with KEXIM further strengthens that relationship.” The deals signed with the Korean carmakers represent roughly 40 percent of the 85 percent annual production of the Nolans project available to be secured under off-take agreements. Through the partnership with Hyundai and Kia, Arafura could contribute notably to South Korean electrification targets, Lockyer added.

Beyond carmakers who use rare earths in the motors of electric vehicles, for example, future Arafura customers also include Spanish-German wind turbine manufacturer Siemens Gamesa, as rare earths are used in most offshore wind turbines.

Photo: iStock/slovegrove

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