Arafura Rare Earths (ASX:ARU) – the recent beneficiary of an injection of cash from Canberra at $800M as well as support from Gina Rinehart and a A$1B+ US support package – has inked a deal with Germany’s export credit agency for US$115M (A$171M).
Provided through the German branch of Euler Hermes, owned by Allianz, the agreement sees Arafura “[securing neodymium-praseodymium (NdPr)] for German-based companies, including Siemens Gamesa.”
One of the better known technologies requiring NdPr is wind turbine engines, which need up to 600kg of the stuff per engine – wind power assets being what Siemens Gamesa manufactures.
This latest deal, Arafura expects, will help further solidify its role on the international stage as an ex-China provider to global rare earth supply chains and markets.
The $171M deal announced on Thursday is to be doled out over a 10 year period; the German agency and Arafura have something of an existing relationship.
This final deal, the company noted, is a final milestone towards mature funding strategy deadlines.
“Approval from Euler Hermes is the latest milestone in the Company’s debt-led strategy and is the final ECA approval required to complete the senior debt structure,” Arafura wrote on Thursday.
“It follows the conditional Commonwealth Government approval for a US$533 million debt financing package.”
Management pointed to the strength of its flagship project in highlighting the news.
“We continue to demonstrate the increasing geostrategic importance of the Nolans Project and developing a diversified global NdPr supply chain, this time by securing German export credit agency support,” Arafura MD Darryl Cuzzubbo said.
“This agreement is linked to offtake with German-based companies, including our key customer Siemens Gamesa, who are global leaders in building wind turbines to advance the energy transition.”
Arafura last traded at 18cps.