ASX-listed rare-earths-miner Arafura Resources on Thursday reported that its Nolans project, in the Northern Territory, would start production by 2013.

Arafura MD and CEO Steve Ward told the ASX’s Open Briefing that the company had begun 2010 with a “clear intention to progress the Nolans project to production as soon as possible”.

“We have stepped up all our work programmes after raising new funds in the first quarter of 2010, and are on schedule to start production in 2013.”

Ward said that mine optimisation work at the site was progressing well, with the first pass results expected by the end of May. Arafura has also completed the logistics study and the contract for the final engineering studies required for the bankable feasibility study would be awarded shortly.

The chemical plant design studies were also continuing, and site selection work was now in its final phase, with a limited number of short-listed sites under evaluation.

“This is a critical decision with long-term implications for the company and requires interaction and working with a number of stakeholders, including governments, regulators, landowners and communities,” Ward said.

Commenting on the proposed super profits tax (SPT), which the Australian government plans to impose, Ward noted that its impact at this point was uncertain.

However, he noted that the Nolans project was not just confined to be a mining project, as resources extraction represented a minor part of the project.

“We also have a significant value-adding chemical processing component, so the tax treatment of an operation like ours may not be straightforward. We are carefully working through the issues to better understand the impact of a tax whose application to Australia-based value-add projects like Nolans isn’t yet clear to us.”

Ward added that Arafura remained concerned about any new tax or change which could potentially impact on the project, regardless of the scale of the impact.

“While there are still uncertainties, scenario modelling based on our current assessment indicates that the Nolans project fundamentals remain strong. This means we believe there are still good prospects to raise development capital to meet our 2013 production schedule, and future returns to shareholders will remain attractive.”

The Nolans project is estimated to contain around 30,3-million tons of measured, indicated and inferred resource, containing around 850 000 t of rare-earths ore, as well as 3,9-million tons of phosphate pentoxide and 13,3-million pounds of uranium.