Araxá Funding Boost Highlights Risks in Global Critical Minerals Supply
St George Mining has secured A$72.5 million in institutional and strategic funding to advance its Araxá rare earths and niobium project in Brazil towards a final investment decision. The capital raise underscores the project's strategic importance amid tightening global critical minerals supply chains.
- A$72.5 million equity raise led by major North American and European institutional investors
- Strategic placement of A$22.5 million to Hancock Prospecting, pending shareholder approval
- Funds allocated to resource upgrades, permitting, metallurgical testing, and feasibility studies
- Araxá hosts high-grade rare earth elements and niobium critical to US and global supply security
- Chinese export controls heighten demand for non-Chinese rare earths supply sources
Strategic Capital Injection for Araxá
St George Mining Limited (ASX, SGQ) has announced a significant A$72.5 million equity raising to accelerate development of its Araxá rare earths and niobium project in Brazil. The raise includes a A$50 million institutional placement attracting major North American and European funds, alongside a A$22.5 million strategic placement to Australian mining heavyweight Hancock Prospecting, subject to shareholder approval.
This capital injection reflects strong investor confidence in Araxá’s potential to become a world-class supplier of critical minerals, particularly rare earth elements and niobium, which are essential for emerging technologies and clean energy applications.
A World-Class Critical Minerals Resource
The Araxá Project boasts a JORC-compliant mineral resource estimate of 40.6 million tonnes at 4.13% total rare earth oxides (TREO) and 41.2 million tonnes at 0.68% niobium pentoxide (Nb2O5). Notably, the project contains six of the US Department of Interior’s Top 10 critical minerals, including samarium, lutetium, terbium, dysprosium, gadolinium, and niobium.
With a high-grade neodymium-praseodymium (NdPr) content of 0.78%, Araxá is positioned to supply permanent magnet manufacturers, critical for electric vehicles and renewable energy technologies. Its location in Minas Gerais, adjacent to established niobium operations, offers logistical advantages such as access to infrastructure, renewable power, and skilled labor.
Geopolitical Shifts Boost Project Importance
Recent policy moves, including China’s comprehensive export controls on rare earths announced in October 2025, have intensified global supply chain concerns. These restrictions limit access to rare earth magnets and materials outside China, increasing demand for alternative sources like Araxá.
The US government has recognized the strategic significance of niobium and rare earths from Brazil, exempting these imports from increased tariffs to secure supply chains. St George’s strategic alliance with US-based REAlloys further positions Araxá as a key player in supplying critical minerals to US industries.
Funding to Propel Project Towards Final Investment Decision
The funds raised will support an upgrade of the mineral resource estimate, project permitting, metallurgical test work including pilot plant development, and feasibility studies. Additionally, part of the capital will cover deferred cash payments to Itafos Inc., the previous project owner.
Executive Chairman John Prineas highlighted the strong institutional support and Hancock Prospecting’s strategic investment as validation of Araxá’s potential. He emphasized the project’s favourable logistics and the accelerated timeline envisioned to bring Araxá into production as a next-generation rare earths and niobium supplier.
With an aggressive drilling program underway to expand and upgrade the resource, St George is well-positioned to deliver a final investment decision in the near term, responding to the urgent global need for secure critical minerals supply.
Bottom Line?
As geopolitical tensions reshape critical minerals markets, Araxá’s development could become a pivotal chapter in securing Western supply chains.
Questions in the middle?
- Will Hancock Prospecting’s strategic placement receive shareholder approval as planned?
- How will ongoing feasibility studies impact the project’s timeline to production?
- What downstream processing partnerships will St George secure to add value to Araxá’s rare earths and niobium?
