The Arafura Resources Limited (ASX: ARU) share price has been racing higher on Wednesday morning.
At the time of writing, the rare earths developer's shares are up a massive 23% to 24 cents.
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Why is the Arafura Resources share price shooting higher?
Investors have been bidding the Arafura Resources share price higher today following the release of a positive announcement out of the rare earths developer.
According to the release, the company has been awarded grant funding of $30 million under the Federal Government's Modern Manufacturing Initiative (MMI).
This will contribute to the construction of a $90.8 million rare earth separation plant at its Nolans Project, which is located 35 kilometres north of Alice Springs in Australia's Northern Territory.
The release notes that the $1.3 billion MMI forms part of the Resources Technology and Critical Minerals Processing Roadmap that aims to develop Australia as a regional resources technology and critical minerals processing hub within 10 years.
The Nolans Project is Australia's only shovel-ready NeodymiumPraseodymium (NdPr) project. The company highlights that it is a globally significant development with potential to supply around 5% of world NdPr oxide demand. It also has an ore to oxide business model that will see downstream processing established locally and enable Australia to play a leading role in the diversification of critical raw materials.
Arafura Resources' Managing Director, Gavin Lockyer, appeared to be very pleased with the news.
He said: "This grant is an exciting milestone for Arafura, recognising the strategic significance of the Nolans Project and its place in the future of critical minerals processing in Australia."
"Rare earths are critical to the manufacture of electric vehicles and wind turbines, with demand growth forecast to be exponential in coming decades. Australia has a window of opportunity to invest in strategically important rare earths projects such as Nolans and maximise the local jobs and investment benefits of the clean energy revolution," he added.
