ANOTHER Chinese business interest has taken a major stake in a Northern Territory mining operation. 

Jiangsu Eastern China Non-Ferrous Metals Investment Holding Company has entered an equity investment agreement with 

Arafura Resources. 

Arafura will use the money to push ahead with developing the Nolans Bore rare earths and phosphate project, 135km northwest of Alice Springs. 

Chairman Ian Laurance said the alliance secured Arafura's long-term future. 

He said the deal meant Nolans could finish its feasibility study and be in production by 2011. 

"It's full-steam ahead."

Under the proposal, the Chinese investment firm will inject more than $8 million into Arafura by acquiring up to 25 per cent of its final shares on issue. 

This will occur through two placements, the first at an issue price of 30c and the second at 40c. 

Foreign Investment Review Board approval is also being sought. 

The Territory Government took some credit for the deal. 

Resources Minister Kon Vatskalis said the agreement came about because of the Government's China Minerals Investment Attraction Strategy. 

He said the four-year program aimed to position the Territory as the preferred location for China's mineral and metal requirements. 

"The Territory Government is playing a key role to raise equity for junior and mid-tier exploration and mining companies by actively matching NT companies and exploration projects with potential Chinese investors," Mr Vatskalis said. 

"We are the only Australian jurisdiction with a dedicated strategy for attracting investment from China and the results can be seen with this recent announcement. 

"This is the fifth significant investment by Chinese companies in the Northern Territory minerals industry in the last two years and I am confident that there will be more to come."

Jiangsu Eastern China Non-Ferrous Metals Investment Holding Company is a subsidiary of the East China Exploration and Development Bureau, a major mineral exploration, development and mining group based in the Jiangsu province of China. 

The Chinese said that they undertook extensive due diligence into the Nolans project geology and metallurgical test results before signing the agreement. 

Arafura is a Perth-based specialty metals explorer. 

Its focus is Nolans Bore. 

Rare earths are used in magnets and rechargeable batteries needed for the rapidly growing hybrid and electric vehicle market. 

Arafura believes Nolans has a mine life of more than 20 years. 

The resource is estimated at 30.3 million tonnes, containing 848,000 tonnes of rare earth oxides, 3.9 million tonnes of phosphate and 13.3 million pounds of uranium.