'We are delighted': Why the Arafura share price is racing higher on Tuesday

Things are looking up for this rare earths developer's Nolans project.

| More on:
Miner holding cash which represents dividends.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Arafura has announced more potential funding for the Nolans project
  • Export Development Canada could provide funding of US$300 million
  • This support is linked to the company's agreement with General Electric

The Arafura Rare Earths Ltd (ASX: ARU) share price is on the move on Tuesday morning.

At the time of writing, the rare earths developer's shares are up 6% to 35.5 cents.

Why is the Arafura share price racing higher?

Investors have been bidding the Arafura share price higher this morning after the company released an update on the funding of the Nolans Project.

According to the release, Arafura has received a letter of interest (LOI) from Canadian export credit agency Export Development Canada (EDC) for the provision of potential financing of up to US$300 million for the Nolans Project.

Management notes that the indication of support from EDC is linked to a strategic arrangement between EDC and General Electric Co (NYSE: GE) to advance the energy transition. In July 2022, Arafura and GE signed a memorandum of understanding for the supply of NdPr from Nolans for use in the manufacture of permanent magnets used in GE's offshore wind turbines.

GE has facilitated Arafura's engagement with EDC, enabling access to the financing. However, it is worth noting that EDC's indicative support is not a commitment, and its participation is subject to its standard due diligence procedures.

But if all goes to plan, things are looking good for Arafura's funding. Management notes that it aligns with in-principle letters of support from Germany's Euler Hermes for up to US$600 million and up to a combined A$350 million from Export Finance Australia and the Northern Australia Infrastructure Facility.

'We are delighted'

Arafura's managing director, Gavin Lockyer, was very pleased with the news. He said:

We are delighted to receive indicative support from Export Development Canada for the Nolans Project. This is further demonstration of the strategic significance that international governments place on the project and its capacity to provide a sustainable supply of critical NdPr to meet the needs of major businesses in key global jurisdictions. We are proud to include GE among the tier-one OEMs associated with offtake from Nolans, and welcome GE's provision of its Aero power generation technology for the Project.

Should you invest $1,000 in Arafura Resources right now?

Before you buy Arafura Resources shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Arafura Resources wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Materials Shares

Why are Fortescue shares charging higher today?

What is getting investors excited today? Let's find out.

Read more »

Business people discussing project on digital tablet.
Materials Shares

What does Macquarie think Liontown Resources shares are worth?

Let's see if analysts think that this lithium miner is in the buy zone or best avoided.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Materials Shares

Lynas shares charge higher on big news

What is getting investors excited today? Let's find out.

Read more »

Lion holding and screaming into a yellow loudspeaker on a blue background, symbolising an announcement from Liontown.
Materials Shares

Liontown Resources shares roar higher on big news

This lithium miner is catching the eye with some big news. Here's what is happening.

Read more »

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Materials Shares

What does Macquarie think BHP shares are worth?

Is now a good time to buy the miner's shares? Let's find out.

Read more »

Middle age caucasian man smiling confident drinking coffee at home.
Materials Shares

What does Macquarie think Pilbara Minerals shares are worth?

Is this lithium miner dirt cheap? Let's find out.

Read more »

Two miners standing together.
Materials Shares

Is it time to buy this beaten down lithium share?

This diversified miner’s share price has been hit on multiple fronts. What does it mean for investors?

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

Pilbara Minerals share price falls on 30% quarterly revenue slump

ASX investors are bidding down Pilbara Minerals shares on Thursday. Here’s why.

Read more »