The establishment of a rare earths mine in the Northern Territory is one step closer, after Arafura Resources announced their pilot project to produce rare earth carbonate was successful.

The company says it's the first time an exploration company has successfully demonstrated the ability to produce a high quality carbonate product that can be sold to any processing plant in the world.

Arafura Resources Managing Director Alistair Stephens says rare earth products are key to several energy efficient industries.

"One is hybrid cars, the other is energy efficient wind-powered wind turbines, as well as energy efficient lights, so these products are key materials to the success of energy efficient products for the future."

Mr Stephens says his company is halfway through a bankable feasibility study into plans to produce carbonate at its Nolan bore facility, north of Alice Springs.

"We're targeting a production of 20 thousand tonnes of rare-earth material each year, which equates to 40 thousand tonnes of the carbonate product because its not 100 per cent pure, it's got a 50 per cent grade.

"At those production rates Nolan's has a resource that's capable of producing that rate for 20, 30 or even 40 years."

He says the the success of the pilot plant means their product can be shown around the world to potential customers.

"There are a number right throughout the Chinese province that have approached us interested in purchasing product."

In this report: Alistair Stephens, managing director, Arafura Resources.