Arafura Rare Earths Limited has signed an Offtake Agreement with Siemens Gamesa Renewable Energy A/S to supply the latter with NdPr.
Under the Offtake Agreement, Arafura will supply Siemens Gamesa with NdPr from the Nolans Project for a five-year term, which can be extended for a further two years. Contract volumes (per Contract Year) for NdPr Metal are 200 tonnes per annum (tpa) commencing in 2026, increasing to 360tpa in year two and 400tpa in years three to five to align with the ramp-up of the Project.
The Offtake Agreement is binding subject to certain precedent conditions being met by 30 September 2026, such as Arafura becoming eligible for Untied Loan Guarantee cover from UFK-Guarantees of the Federal Republic of Germany for the funding of a raw material project, completion of construction and development of the Nolans Project, the start of commercial production, and ramp up.
The Nolans NdPr will be used to manufacture permanent magnets for offshore wind turbines produced at Siemens Gamesa’s Cuxhaven production facility in Germany, where all hub, generator, and backend components are combined into the turbine and then transported globally. This procedure is consistent with Arafura’s offtake strategy of focusing on original equipment manufacturers from geographical regions known to have supportive Export Credit Agencies (ECAs) and the recent appointment of KfW IPEX-Bank as an additional mandated lead arranger and ECA structuring bank for the Project’s debt financing.
The Offtake Agreement will support current discussions with German ECA Euler Hermes, which recently granted Arafura a non-binding letter of in-principle support for a US$600 million untied loan guarantee to support the Nolans Project. The loan guarantee of up to US$600 million is non-binding and indicative; any final guarantee amount will be established based on the offtake volume processed in Germany, final offtake structures with German enterprises, and current NdPr market conditions.
According to the Company’s Project Update, Arafura expects to begin production of NdPr Oxide in 2025, with annual production ramping up to 4,440 tpa in 2028. These timelines are contingent on several circumstances, including the completion of outstanding offtake agreements, the acquisition of necessary funds to complete the Project, and the successful construction, commissioning, and ramp-up of the Project.
“We are delighted to have concluded negotiations for our second offtake agreement. Siemens Gamesa is the world’s leading manufacturer of offshore wind turbines, and this agreement compliments our strategy to create supply diversification into the renewable & E-mobility sectors,” Arafura Managing Director Gavin Lockyer said.
