Arafura Secures US Offtake for 500 Tonnes NdPr Oxide

Strategic US Supply Chain Partnership Secured

Arafura Rare Earths (ASX:ARU) has taken a significant step in positioning its Nolans Rare Earths Project as a key supplier to the US critical minerals ecosystem by signing a binding offtake term sheet with Traxys North America LLC. The agreement commits Arafura to supply 500 tonnes per annum (tpa) of neodymium-praseodymium (NdPr) oxide and 7.5 tpa of dysprosium-terbium (DyTb) oxide over five years, with an option to extend for two more years.

This deal is a clear signal of growing alignment between mining companies and government-backed initiatives aimed at revitalising domestic manufacturing in automotive, defence, and advanced technologies sectors across the United States. Traxys aims to channel the rare earth oxides into the US supply chain, including potential integration with the US Export-Import Bank's Project Vault, designed to secure critical mineral supplies.

Pricing Linked to Transparent Global Indices

Pricing under the agreement will be denominated in US dollars and tied to an independent, transparent global seaborne pricing index, such as Benchmark Minerals Intelligence or S&P Global Platts North America. This approach mitigates pricing opacity and aligns with market standards, providing both parties with a clear and fair valuation mechanism.

The binding term sheet is subject to customary conditions precedent, notably Arafura reaching a Final Investment Decision (FID) on the Nolans Project, expected in the second half of 2026. The company aims to finalise a long-form offtake agreement within six months of signing the term sheet, cementing this supply arrangement as a cornerstone of its commercial strategy.

Building on Existing Offtake Momentum

This US-focused agreement complements Arafura's existing offtake deal with Traxys Europe, announced in March 2025, which covers up to 300 tpa of NdPr oxide. Together, these contracts cover a significant portion of Arafura's projected rare earth output, underpinning its financing and market positioning efforts.

The timing follows recent milestones where Arafura secured approximately A$230 million in cornerstone equity funding from government-backed sources, a critical step toward the Nolans Project's FID and construction readiness. These capital injections have bolstered the company's cash reserves and advanced binding offtake agreements covering over 66% of NdPr oxide production, reflecting steady progress in bringing the project to fruition. The new Traxys North America deal further strengthens this trajectory by expanding Arafura's footprint in strategic markets.

Traxys’ Role in Critical Minerals Supply Chains

Traxys is a global metals and natural resources trader with over a century of experience and annual revenues around US$10 billion. Its commitment to environmental, social, and governance (ESG) standards positions it as a responsible partner in the critical minerals sector. This partnership not only secures a reliable buyer for Arafura’s rare earth oxides but also aligns with broader efforts to establish resilient and transparent supply chains for essential materials.