Perth-based explorer Arafura Resources Ltd and fertiliser maker Incitec Pivot Ltd are studying the possibility of constructing integrated chemical facilities to supply chemicals to Arafura's proposed rare-earth phosphate processing facility.

The pair has signed an agreement to undertake the study, which will include a review of potential plant sites in South Australia and the Northern Territory for both a chemical plant and the rare-earth processing facility.

The study is expected to take six months.