Rare earths developer Arafura Resources has executed a nonbinding memorandum of understanding (MoU) with a Korean multinational for a long-term sales agreement and the joint development of separation facilities in Australia and Korea.

“Today’s development is a very important endorsement of Arafura and the Nolans project. Execution of an MoU with this key strategic customer confirms both parties’ intention to work together to develop a strong, long-term relationship in rare earths,” said Arafura chairperson Ian Kowalick.

The MoU aimed to formalise a sales and purchase agreement for Nolans product, as well as the codevelopment of rare-earth separation facilities in both Australia and Korea, and a cooperative effort to share technology and organizational capacity, while also formalising funding arrangements to bring the Nolans project to production.

The potential commercial agreement could account for the sale of some 3 000 t/y of rare-earth products from the Nolans project.

“This highly successful group brings substantial experience in major construction projects and its associated organisations have vast exposure to both the chemicals industry and rare-earth end-users in a key, globally significant market in Asia,” said Kowalick.

“Furthermore, the group has agreed to work with Arafura to pursue project funding, which will be a key component of our overall project financing work,” he added.

The miner has previously warned that the bankable feasibility study (BFS) on the Nolans project would be delayed until at least the third quarter of 2013, after the company reduced the work rate on the project, until additional capital could be secured.

Subject to the availability of funding, Arafura still had to complete a number of critical work streams, including the delivery of an updated resource mode, beneficiation test work, a rare earths demonstration plant, laboratory work for the simplification of the phosphate circuit and the production of a solid phosphate project, as well as rare-earth oxide separation of cerium and lanthanum.

The Nolans project hosts an estimated 850 000 t of rare-earth oxides, 3.9-million tons of phosphate pentoxide and a further 13.3-million pounds of uranium. It was initially slated to start production in 2013, however, this was delayed as the company completed an expanded BFS.