KfW's investment forms part of a broader package of cornerstone equity commitments announced by Arafura, alongside Export Finance Australia's US$100 million equity investment and the National Reconstruction Fund Corporation's A$200 million investment by way of convertible notes the proceeds of which will be used to develop Arafura's flagship Nolans Rare Earths Project in the Northern Territory.
The Nolans Project, to be developed at the Nolans site approximately 135 kilometres north of Alice Springs in the Northern Territory, will include a mine, processing facilities comprising beneficiation, extraction and separation plants, and associated infrastructure.
KfW's investment represents its first into the Australian critical minerals sector and reflects the strategic importance of the Nolans Project to German (and European) industrial customers. Arafura's binding offtake agreement with Siemens Gamesa Renewable Energy A/S for the supply of NdPr to be used in the manufacture of permanent magnets for offshore wind turbines assembled at Siemens Gamesa's Cuxhaven facility in Germany, is consistent with the GRMF's objectives of diversifying critical mineral supply chains for German (and European) industrial customers.
Completion of KfW's cornerstone equity investment is subject to certain conditions precedent, including FIRB and shareholder approval.
The MinterEllison team advising KfW is led by Sebastian Rosholt (Partner, Energy, Resources & Projects), with support from Amanda Farley (Senior Associate, Corporate M&A).
Sebastian Rosholt, Partner at MinterEllison, said: "This investment reflects the growing strategic importance of Australia's critical minerals sector and the role projects like Nolans can play in supporting global supply chains. We were pleased to support KfW on its first investment in the Australian critical minerals market, working through a transaction that brings together Australian and international government backed institutions to support the development of a globally significant project."
