The Federal Government has approved the proposed acquisition by a Chinese company of an equity stake in minerals explorer Arafura Resources.

Jiangsu Eastern China Non-Ferrous Metals Investment Holding Company plans to buy a 25 per cent interest in Arafura for $24 million.

Perth-based Arafura said today the Foreign Investment Review Board had approved the sale of 60 million shares for up to 40 cents a piece in two placements.

JEC is an associated entity of the East China Exploration & Mineral Development Bureau (ECE), a major mineral exploration, development and mining group based in Nanjing in the Jiangsu Province of China.

Arafura managing director Alistair Stephens said in a statement the capital injection will ensure the company has the funds to progress an engineering feasibility study for its Nolans project in the Northern Territory.

“JEC is a highly strategic and influential partner who will actively work with Arafura to assist funding and development of the Nolans project,” he said.

“The skills and expertise that JEC brings to Arafura are substantial.”

Arafura and JEC have agreed to establish joint ventures and co-operate in additional funding for exploration on all of Arafura’s existing exploration licences.

The parties have also agreed that if Arafura acquires additional exploration licences or mineral projects, then they will negotiate to develop them jointly.

Arafura shares were up four cents, or 5.8 per cent, to 73 cents at 8.50am.