Another Perth-based rare earth miner, Northern Minerals, is facing similar challenges.
Managing director and CEO George Bauk:
GEORGE BAUK: We're all suffering probably the same challenges in relation to the mining industry in terms of financing.
CLINT JASPER : In the past China's dominance of this market has crushed outside competition, and after the June bankruptcy of American firm Molycorp, there's only one left standing.
That's the Australian company Lynas Corporation, and Arafura's Gavin Lockyer says its success in the market is a good thing for companies like his.
GAVIN LOCKYERI : China supplies over 90 per cent of the market, and obviously when you control supply to such a degree, you can also affect your competitors that might be trying to come into the market so we've certainly seen that in the past few years.
Luckily though for Australia, we've seen the likes of Lynas Corporation actually coming online and commissioning last year, and they certainly seem to be hitting their straps now, which is great for the industry.
CLINT JASPER: While China will remain a major competitor, there are concerns about its existing stocks.
It's perhaps why some of the biggest investors in these Australian rare earths projects have come from China.
GAVIN LOCKYERI : To that extent, we've had had a Chinese state-owned enterprise support us for a very long time.
CLINT JASPER: The East China Mineral Exploration and Development Bureau owns a quarter stake in Arafura.
And Northern Minerals has signed a $49.5 million funding partnership with Jien Mining.
George Bauk says despite the failed attempts at rare earth mining outside of China, the unwilling investors and the low prices, there's a better future around the corner.
GEORGE BAUK: You know it's not just the magnets; I mean they are one of the big drivers, but we've also got lutetium which is unknown to many people; it's a key ingredient in the PET scanners which help the medical industry in early detection of cancer and the like.
CLINT JASPER: Both companies plan to start production in the next four years.
NTU Price at posting:
16.5¢ Sentiment: Hold Disclosure: Held
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