Germany and the EU as a whole, as well as South Korea, are staring at a deficit of rare earth elements, while the U.S. and Japan are busy making supply deals, according to the top executive of Australian rare earths miner Arafura.
The recent U.S. government deals to buy stakes in projects and miners in North America in exchange for supply are poised to ease America’s dependence on Chinese supply, which has been choked for more than a year after Beijing restricted rare earths exports to the West.
“So the EU and in particular, Germany, and Korea are quite exposed, right? Where are they going to get their supply from?” Arafura’s chief executive officer Darryl Cuzzubbo told Reuters.
Arafura has announced so far three binding offtake agreements to the market, which currently represent 66% of its binding offtake target, the company said last month in its 2025 results release.
Arafura is developing the Nolans Project in Australia’s Northern Territory, aiming to supply around 4,440 tons of NdPr oxide annually beginning in late 2029. These volumes would account for about 4% of global supply of the elements vital for making permanent magnets for the automotive and defense industries.
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“The current geopolitical and trade environment has created a favourable environment for the negotiation of the remaining offtake volumes, as many potential customers have been directly impacted by China’s rare-earth export restrictions, exposing vulnerabilities within the global supply chain,” Arafura noted in the 2025 financials.
With equity investment consideration from the German Raw Materials Fund tied to offtake supporting German and European industry, Arafura is targeting a minimum of 500 tons per year (tpa) of neodymium-praseodymium (NdPr) oxide for this market, in addition to the 520 tpa offtake deal with Siemens Gamesa RE.
Arafura also said that the U.S. has become another region vying for the remaining offtake volumes, following the signing of the Critical Mineral’s Framework agreement between Australia and the United States last autumn.
By Tsvetana Paraskova for Oilprice.com
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