ARAFURA Resources will purchase 800ha of land in South Australia to process rare earths mined at the NT's Nolans Bore Mine.

Managing director Steve Ward said the mineral concentrate would be mined at the site near Aileron and railed to Whyalla in South Australia for processing at the complex, which will comprise rare earths and phosphate processing plants, and feed chemical manufacturing facilities.

He said the Territory Government had worked closely with the company to find a site in the NT.

"It was not possible to identify a suitable location in the Territory that met all of Arafura's criteria for a rare earths complex in line with the company's timetable for first production in 2013," Mr Ward said.

The site selection criteria included sufficient industrial land, proximity to transport infrastructure and services, access to skilled workforce and the availability of competitively priced power and water.

Mr Ward said Arafura would still maintain a significant presence in the Territory through its exploration and mining activities because the Nolans Bore Mine project remained its flagship project.

"The Nolans Bore Mine will deliver substantial benefits to the Territory, including royalties, jobs, service and supply opportunities, and the establishment of critical infrastructure in the Aileron region that has the potential to act as a catalyst for other businesses, for example in the horticultural industry."

"This is entirely consistent with the NT Government's regional development objectives."

Mr Ward said the mine would be a supply source for critical rare earths to the world market for at least the next 20 years.

An environmental impact statement and mine design is under way and the company plans to start construction of the mine in 2012.