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Gina Rinehart-backed Arafura Rare Earths (ASX:ARU) has given back some of Tuesday’s gains on Wednesday morning, dropping back to 40cps, but with the latest Trump-China critical minerals spat set to define the foreseeable future, it’s likely some may view the pullback as a chance to snatch more.
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Key to the momentum underpinning rare earth stocks through Week 42 is a renewed sense of confidence that, like Washington when it bought a stake in MP Materials earlier this year (a company headed by an enthusiastic Republican donor), Canberra may soon move to introduce price floors for rare earths here at home in a bid to incentivise companies to raise and spend the CapEx heading into production.
Reports from earlier this week suggest Canberra is currently considering doing that very thing, first published in The Age, then picked up by global newswires.
Should that move go through, it would be a show of acumen for traders who bought into Australian peers once the MP Materials deal went through.
At any rate, Arafura – backed by both Rinehart and Canberra itself – is an obvious contender when it comes to investor calculus around stockpicking what may and may not become a runner in the sector. Arafura has already inked an offtake deal for the supply of NdPr down the line with the German export agency.
Located in the Northern Territory, it’s one of two big emerging critical projects for Australia in the top end, when you also consider Tamboran Resources’ emerging Beetaloo gasfield as the other of interest.
ARU last traded at 41cps today.
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