The rare earths developer had to cancel a $74 million capital raising last week following a fall in its share price and also had its remuneration report voted down at Friday's annual meeting.

The company plans to develop a $1 billion rare earths processing plant at Whyalla, to process minerals from its Nolans rare earths project in the Northern Territory. 

Mr Kowalick has been with Arafura since the company floated on the stock exchange in 2003 and has strong government and business connections in South Australia.

He was head of the Department of Premier and Cabinet from 1995-2000 and is the chairman of Playford Capital, a councillor of the University of Adelaide and deputy chair of the Adelaide Festival Centre Trust.

It is understood major Chinese shareholder ECE Nolans Investment Co threw its 64.4 million shares into the push against Mr Kowalick, who was due to take over chairmanship of the company from Ian Laurance.

Overall there were 69.3 million votes against Mr Kowalick's re-election and 37.6 million in support. Before the meeting, just 3.9 million proxy votes had been cast against his re-election.

ECE Nolans at one stage owned more than 24 per cent of Arafura but has allowed itself to be diluted to 17.5 per cent via capital raisings over recent years.

ECE had indicated to the company that it would participate in the $74 million rights issue which was cancelled last week.

The rights issue was to have been carried out at 60c, but the Arafura share price has been trading well below this, motivating the board to cancel it.

"The company currently has approximately $45 million which can serve immediate needs," it said on Thursday.

"Arafura will appoint a leading corporate advisor to assist with identifying and executing all means to raise additional funds in the current environment.

"These funds will be needed to complete the Nolans bankable feasibility study."

Chief executive Steve Ward told the AGM on Friday about $70 million was required for this purpose.

ECE is represented on the board by non-executive directors Shasha Lu and Dr Alex Losada-Calderon.

Mr Kowalick would not comment on the issue yesterday.

Meanwhile the remuneration report attracted 20.0 million votes in support, and 17.6 million against. As more than 25 per cent of the votes cast were against the resolution, it counts as a "strike" against the board, and a spill would be triggered if a similar protest vote were returned at next year's annual meeting.

The company's aim is to finish its bankable feasibility study and have project financing in place by the end of 2012.

Arafura shares closed steady at 46.5c yesterday.