Northern Minerals Price Target Cut 17% to A$0.05/Share by...

Northern Minerals Price Target Cut 17% to A$0.05/Share by Canaccord Genuity. 13/03/2024 4:03PM. No story, headline only
_______________________________________

Relevant excerpts from Labor backs Rinehart on rare earths in today's AFR:

The Albanese government is supercharging its push to break China’s stranglehold on global critical minerals supply with an $840 million package of loans and grants to help Gina Rinehart-backed Arafura Rare Earths develop its Northern Territory mine and refinery.

Arafura’s funding – which includes about $495 million in loans from the Critical Minerals Facility, $200 million from the revamped Northern Australia Infrastructure Facility, and up to $115 million in federal export financing – will underpin Australia’s second rare earths refinery after federal taxpayers loaned $1.25 billion to Iluka for a facility at Eneabba in Western Australia.

Arafura, which is listed on the ASX with a market value of $355 million, has agreements to supply rare earths to South Korean carmaker Hyundai, Siemens Gamesa Renewable Energy and GE.

The planned mine, situated about 125 kilometres north of Alice Springs, would produce elements like neodymium (Nd) and praseodymium (Pr) in oxide form. The construction of the mine and processing facility would cost about $1.68 billion, Arafura has said.

The company aims to benefit from agreements between the South Korean and Australian governments to partner on critical minerals given both have struck defence alliances with the United States. In December, the South Korean export credit agency, KEXIM, provided a letter of intent that suggested it was willing to lend $US150 million ($226 million) to the company.

Prices for neodymium and praseodymium crashed to a three-year low in March of $US50 per kilogram. The benchmark price for NdPr in China was $US139.30 per kilogram in early 2022. Arafura has had a torrid year, with its shares down 72 per cent to 15¢ from 53¢ a year ago.

Most of the Labor package is in the form of debt financing, with around $30 million in the form of a direct grant from the former Coalition government’s Modern Manufacturing Initiative.The NAIF money is the first to be released since Labor reconfigured the fund in last year’s budget, which earmarked $500 million for critical minerals projects. Labor’s support is expected to create more than 300 jobs in the NT, including 200 in construction.

Rare earth metals are among the most technically challenging and economically fragile mining investments, but are becoming increasingly vital to global supply chains amid fears over China’s dominance of the market.Essential in most high-tech products, rare earths are used to make magnets for applications across military hardware, consumer electronics and renewable energy.China produces more than 80 per cent of the world’s separated rare earth oxides, prompting governments in Canberra and Washington to pump money into projects that could break China’s stranglehold on global supply of rare earths.

Arafura has told investors it wants to secure funding for the Nolans project before the end of March and it expects to spend the next two years on construction before delivering first products around December 2026.

__________________________

Ash here.

A few posts up on this page are charts showing the difference between ARU's Nolans and NTU's Wolverine: Nolans produces NdPr while Wolverine produces DyTb.

ARU and ILU/NTU are not in direct competition. Both groups of elements are used in different forms of permanent high performance magnets for electric motors and related applications.

The real significance for REE shareholders in the story is the nature of governmental assistance. ARU has received large commitments for concessional loans on favourable terms and NTU may expect similar support. I have been rabbiting on about the glory of grants, yet this form of assistance looks too ambitious.

Watching the saga unfold with great interest.

Ash