An Australian mining company announced Friday its intention to raise roughly A$350 million ($250 million) through a stock offering to finance development of its major rare earth mining venture, with backing from the investment firm owned by Australia’s wealthiest individual.
Arafura Rare Earths revealed the fundraising strategy one day following approval for its $1.6 billion Northern Territory mining operation, which is expected to become Australia’s third-largest rare earth facility by 2030.
The company will release an initial batch of shares valued at approximately A$175.5 million, priced at A$0.260 each, marking a 16.1% reduction from Thursday’s closing price. A second round of shares worth A$174.5 million awaits shareholder authorization.
Hancock Prospecting, the investment company belonging to Australia’s richest person Gina Rinehart and currently Arafura’s biggest investor, has pledged approximately A$85 million toward the stock offering.
Following the completion of this fundraising effort, Hancock’s ownership percentage in Arafura is expected to increase from its current 15.5% to about 17.5%.
According to Arafura, the money raised will completely cover the equity portion needed for the Nolans project’s development.
The mining operation has already obtained financing commitments from export credit organizations in the United States, Canada, Germany and South Korea, along with international trading companies and manufacturers, as Western nations increase efforts to reduce dependence on China, the world’s leading rare earth producer.
The company reported securing approximately 93% of its binding sales target for neodymium-praseodymium (NdPr) oxide through recent supply contracts and export credit agency backing.
Australia aims to become the primary rare earth supplier for its international partners, with Arafura scheduled to provide 500 metric tons of NdPr to the nation’s strategic mineral stockpile, expected to begin operations by year’s end.
Additionally, Arafura announced a separate share purchase program targeting up to A$25 million from individual investors.
Trading of the company’s shares has been temporarily suspended.
