Joint media conference with Minister for Trade and Tourism Senator Don Farrell, Northern Territory Chief Minister Eva Lawler MLA, and Arafura Rare Earths CEO Darryl Cuzzubbo.

Eva Lawler:

It's wonderful to be here today. A great announcement around rare earths and critical minerals in the Northern Territory. I've got with me Madeleine King, the Minister for Resources, Federal Minister for Resources, Don Farrell who's the Federal Minister for Trade, and I've also got Mark Monaghan, Minister for Mining in the Northern Territory, and the CEO of Arafura Rare Earths in the Northern Territory. A wonderful announcement for the Northern Territory but also for the town of Alice Springs because this is about jobs and employment across the Northern Territory, but jobs and employment in the town of Alice Springs. So there's about 200 jobs involved with this project. It's around construction but then those ongoing jobs. But that will also mean for Alice Springs, Alice Springs will be the heart for the servicing of Arafura resources, Arafura Rare Earths. So it will be a great benefit to the town of Alice Springs. It will be a shot in the arm for that town and a great announcement today around Arafura Rare Earths. 

So very pleased to be here and I'll let the Federal Government who are putting in all the money be able to talk more about the announcement today. Thank you. 

Madeleine King:

Thanks so much, Chief Minister, and thanks so much for hosting us here and also to Minister Monaghan in your role of Minister of Mines and Education. A big of couple of days for you both here in the Territory. And also to my colleagues Minister Farrell and the member for Solomon Luke Gosling, and also representatives of course from Arafura Rare Earths. This is a very significant announcement. This is a huge body of funding that will go to really uplift Australia's capacity in rare earths mining and refining. The Federal Government have put together a package of $840 million, $500 million from the Critical Minerals Facility and $115 million also from Export Finance Australia's commercial account, teamed up with $200 million from the Northern Australia Infrastructure Facility and a previous grant of $30 million from the Modern Manufacturing Initiative. This teams up with another body of international funding by international equivalents of REFA and also commercial banking to have well over a billion dollars worth of funding to what will be the biggest rare earths mine and integrated refinery in this country, and I dare say Arafura Rare Earths would say probably the world, but I'll let them confirm that in due course. You cannot underestimate and our country cannot underestimate how significant this is for Australia's resources and critical minerals and rare earths capacity. This makes Australia one of the key cogs in diversifying the supply chains for rare earths which go into super powerful magnets for wind turbines but also Defence applications. It is going to be enormously important for the town of Alice Springs and also the Northern Territory, with hundreds of jobs in construction and then over 100 jobs in the ongoing operation of what will be a really significant facility right in the heart of Australia and right in the heart of the Northern Territory. We know the road to net zero goes through Australia's require earths and critical minerals resources and of course now the road for net zero will also go through Alice Springs and the Top End. With that I'm going to hand over to my good friend and colleague the Trade Minister Don Farrell. 

Minister for Trade:

Well thank you Madeleine and thank you Eva for hosting us today. Under the Albanese Government we want Australia to be a renewable superpower. The best way to do that is to make investments like this into the critical mineral and the rare earth space. We want the Northern Territory to be key players in the process of getting to net zero and delivering that result of being a renewable superpower. I'm very pleased one of my Department, Export Finance Australia, is working with the industry to bring that about. Australia is the lucky country. It's been lucky for a very long time and it's lucky once again. Australia has either the most or the second-most resources and reserves of critical minerals of rare earths anywhere in the world. What we don't always have is the capital to not only dig the product out of the ground, but more importantly to process and value add to those products. By investing in the Northern Territory and in this particular company that's exactly what we're going to be doing. We're going to be value adding to our wonderful luck in having all of those resources. So I'm very pleased that the Northern Territory is going to be a key player in the move to net zero. The rest of the world wants our product. We want to be able to deliver it to the rest of the world. I'm very pleased to be here with Madeleine King, my very good friend who's the person responsible in this country for resources. She's doing a terrific job in this space. And we can do an even better job into the future by ensuring that Australia plays its part in getting to net zero. Now I'd invite the company, Darryl, to come forward and talk about the very important job opportunities and investment opportunities that this new development is going to produce for the Northern Territory. Thank you. 

Darryl Cuzzubbo:

Thank you, Senator. Good morning, ladies and gentlemen, it is great to be here with you today. Let me start by just acknowledging the host, Eva, thank you for having us here today, the Northern Territory's Chief Minister. But let me also acknowledge the Australian Government, Minister King, Minister Mark Monaghan, Don Farrell and the Honorary Luke Gosling. On behalf of Arafura I'd like to just express our gratitude for the support from the Federal Government and also the Northern Territory government for getting us to this point today. As Minister King said, today it's a very significant announcement. It's going to position the Northern Territory as the forefront of the critical minerals industry in Australia and allow us to compete on the global stage. The Commonwealth funding package that has been announced today is the cornerstone of our total funding solution. It is substantial in its size. It provides the impetus for us to finalise discussions with other lenders all around the world. And it also helps provide investor confidence which helps us to raise the required equity. But the announcement is also significant because it demonstrates that Arafura can play a leading role in the Australian Government's Critical Mineral Strategy. We'll be supplying the rare earths oxide which is referred to as NdPr that is essential for the manufacture of electric vehicles, wind turbines and many other things, including the phones that you would all have, and the demand for NdPr is expected to close to double by the end of this decade. So you can't really have the energy transition take place without a lot more NdPr. I think this will obviously bring a substantial opportunity, social and economic benefits to the Northern Territory, but particularly to Alice Springs. The project highlights also the pivotal role that Australia can play in the global energy transition. Let me just briefly share with you what makes this project so unique. This will be the first NdPr mine to oxide processing plant in Australia. Wholly built in Australia. This fits with the Australian Government and the Northern Territory Government's strategy of maximising the downstream value add and hence economic contribution in this country. Arafura are committed to the Northern Territory and Alice Springs, and we have already invested over $100 million in the region. The project is shovel ready. So what that means is as we secure the remaining finance throughout this year we will be starting construction. Let me again finish by again thanking the Australian Government, the Northern Territory Government, EFA and NAIF in making today's announcement a reality. We very much look forward to partnering with the Governments in making sure that we do our bit in delivering on the Australian Government's Critical Minerals Strategy. Thank you. 

Journalist: 

You mentioned securing the remaining finance, how much finance is left to secure for we can get shovels in the ground? 

Darryl Cuzzubbo:

Yeah, so we've got  there's two parts to it. So‑ there's securing the remaining debt and then that sets us up to secure the remaining equity. At our quarterly results in about a month's time we're going to provide a little bit more detail on that. 

Journalist:

What about FID, that's been put back and put back and put back, you're now talking some time later this year, are you? When do you expect that to be ‑‑ 

Darryl Cuzzubbo:

Yeah, so we expect that during the course of this year. 

Journalist:

When though, because it's been talked about in March, it was meant to be this month, it was meant to be October last year. 

Darryl Cuzzubbo:

This announcement today is the key enabler for finalising the debt and also allowing us to reach out to investors. So I can't express enough how important today's announcement it is. It actually allows us to get on. The other comment I would just make is that I mentioned that, you know, we've already spent $100 million. From an engineering perspective, from a site perspective we are ready to go. We've got the camp facilities, we've got the road access, we've got the water, et cetera, et cetera. So as soon as we've got financing we will start construction.

Journalist: 

Why don't you just go ahead without public money though? 

Darryl Cuzzubbo:

Sorry? 

Journalist: 

Was there some issue about why it couldn't go ahead without money? 

Darryl Cuzzubbo:

No, not at all. This is obviously a key part of the Australian Government's minerals; critical minerals strategy and their support helps us with commercial lenders all over the world. But we're well advanced with other commercial lenders, Japan, Korea, France, et cetera. 

Journalist: 

But the project still may not go ahead if you don't get that private [indistinct]?

Darryl Cuzzubbo:

Of course, of course. But we're confident.

Journalist: 

Your company's previously told the Australian Financial Review that it had creditors pull out due to a lack of downstream production goods requiring rare earths in Australia. What's the plan to address this? 

Darryl Cuzzubbo:

So I'm glad you asked that question. So as Senator Farrell has already mentioned what makes us unique is that we will be producing an NdPr oxide. So if you look at the full value chain from mining to magnets, about 90 to 95 per cent of the value chain is represented getting to oxide. We will be the first wholly built mine to processing plant in Australia that reflects that close to full value chain. We think that puts us in a unique position to provide NdPr to the world, which is where the supply currently is quite localised. And that is why we're pretty confident that we will get the equity we need as well. 

Journalist:

So why did you need the Government to step in at all? 

Darryl Cuzzubbo:

We wanted ‑‑ 

Madeleine King: 

Can I add to this for a moment? 

Darryl Cuzzubbo:

Yes, sorry. 

Madeline King: 

Excuse me. I just want to clarify the work that the Government has done around this funding. It's a significant amount of money, there's no doubt about that and no one would dispute that. But it has taken a long time to put together and it takes a long time because of the extensive due diligence the excellent team at Export Finance Australia put into this, the team in my Department, the Northern Australia Infrastructure Facility put in to researching the viability of a project such as Arafura Rare Earths are putting together. It also takes into consideration the really important fact about making sure we have the capacity to have rare earth produced in this country in the national interest and as part of the critical mineral strategy of this government to make sure we're able to mine and refine and fully process these products in Australia. This is a matter of national interest, and this is where government has to step in to help the market and I am confident because of the extraordinary due diligence that the two organisations that Senator Farrell and I are responsible for have gone through around this project, that it will be a success. It is important to crowd in this funding. You have heard that there was an equivalent amount of funding from external sources. Mining and refining do not come cheap. There is no doubt about it. This rare earths processing needs a lot of energy, it needs a lot of literally chemical processes of ‑ it's a very advanced manufacturing enterprise. So this is why it costs a lot of money but the benefits to our national interest, to the Northern Territory and jobs in this region and for the whole country is absolutely enormous. 

Journalist: 

How long did it take you to put this package together? 

Madeleine King: 

It's taken anywhere between 18 months since coming into government, but I would accept that Arafura have worked with the previous government as well because of the extensiveness of the project and how really difficult it is to mine and refine rare earths. 

Journalist: 

Once these funds and investment have all been secured how long does the construction phase actually take? 

Madeleine King: 

We'll ask Arafura that, I think it's a couple of years but there's obviously a bit of work to do as well finalising environmental approvals. But it's ‑and Arafura might confirm when you expect production, but I wouldn't want to hold them to it because we know this is complicated work and it has to be done properly and delays are a natural part of that industry. 

Journalist: 

How much will have to be paid back here from the company? 

Madeleine King: 

Well the loans are all, are repayable for the Australian Federal Government, but they de‑risk the project, so they are low interest, and they are on terms agreed between the government and the Arafura Rare Earths. But all the loans, as it is for any other loan made by Export Finance Australia and the Northern Australia Infrastructure Facility are all repayable. 

Journalist: 

And if the project doesn't go ahead, the remainder is not sourced, does the money get paid back to government or what happens? 

Madeleine King: 

The money won't go out until it's all funded. So, you know, of course there is no doubt that if the project doesn't go ahead the money doesn't just disappear. So, you know, obviously we'll retrieve that. 

Journalist: 

The history of the project was always around the NAIF funding, which was always what was required. This is ratcheting it up an extraordinary amount. Is this a sign that the project simply isn't viable without an enormous amount of corporate welfare? 

Madeleine King: 

No, absolutely not, and it's not corporate welfare. That's really an unfair characterisation. Rare earths, as I said before, are really hard to produce, to mine and produce. It's a thin market so they're subject to manipulation from elsewhere. So we need to be really aware of what we're trying to do is build a national capacity under repayable loans that go back to the government and in the meantime act in the national interest but also create jobs and create further capacity. Without the project that Arafura are developing we won't have the capacity to make more magnets here. We won't have the capacity to go to our international partners and ask them to set up shop in further advance of manufacturing in this country. So this is, you know, a really critical step along the way of making sure we can build more things here, which is a really important part of a national capacity in rare earths, in critical minerals so that we can decarbonise not just Australia but the world. This is what we're doing here. On the NAIF itself, I announced last year with the Critical Minerals Strategy that we would set aside $500 million of NAIF funds just for critical minerals and rare earths projects that match with the Critical Minerals Strategy, and this is the first project out of that tranche of funds. 

Journalist: 

Senator Rex Patrick has suggested that the Government should have an equity stake or seat on the board given the scale of its investment in this project. Will you consider that? 

Madeleine King: 

Sorry, who was it that said that? 

Journalist: 

Senator Rex Patrick. 

Madeleine King: 

He's not a senator. Yeah, he has been before. These are loans so they are repayable. You know, we work with the companies to make sure the terms, obviously the terms are agreed. We also work with the international financing agencies around this. Export Finance Australia has operated for many, many years on this kind of funding model, as has the Northern Australia Infrastructure Facility and they've both proven very successful, so we're going to keep on that track because it works. 

Journalist: 

The Chief Minister's been very clear about her goals to have Aboriginal people working in the Northern Territory. We're talking about hundreds of jobs in construction.  Is there any requirement for a certain percentage of those jobs to be filled by Aboriginal people? 

Madeleine King: 

We've spoken extensively with Arafura Rare Earths, and they have a goal of 20 per cent indigenous employment I think across any of the projects they do, and that will equally apply to this project. 

Journalist: 

20 per cent from ‑‑ 

Madeleine King: 

Sorry. 

Journalist: 

Is there any agreement or special deal to give preference to Australian companies to get access to the rare earths, so you were talking about [indistinct]? 

Madeleine King: 

Yeah, well the off take agreements are being negotiated right now is my understanding. Obviously there are commercial agreements. It is difficult because we don't have a full production chain in Australia just yet. And as I think I mentioned earlier the construction of the Arafura facility, the Nolans facility will bring some, it has the potential to bring some of those projects here so that we can keep the off take in Australia. But without that sort of secondary market it's hard to keep everything here. These things need to be built but they may be exported to the countries that have invested in this, which is Korea, Germany, importantly Canada as well. And I expect the US would have an extraordinary interest in this project too.