Australian rare earths explorer Arafura Resources Limited 11 December Disclosure and China rare earth industry leader in enterprise resource Sheng and "marriage ", the two sides have begun to try to work at the technical level ; Arafura strategic partnership with China side , expand marketing network and processing systems in order to optimize the cost structure of the relocation route operators gradually clear .

Arafura and September this year, Sheng and MOU (MOU), the proposed joint development of the Northern Territory 's flagship asset Nolan Bray (Nolans Bore) RE projects. Lockyer told shareholders that , with the signing of Sheng and resources is an important milestone in the development of the company , will bring a large number of long- and short-term real interest ; including optimization of technical processes , shorten the project to achieve commercial use , the reduction in capital expenditures and operating costs. Signed a memorandum of understanding is the first step , the two sides will form a long-term strategic partnership to develop a specific framework.

General Manager Arafura director Lockyer (Gavin Lockyer) yesterday said that since the signing of MOU, Sheng and its many Chinese rare earth processing specialist referrals , especially for important guidance in the processing and extraction of rare earths ; recently executed two sides work contract , the same work program cost far less than Australia. In addition, Sheng and also to the Arafura referrals from existing customers , brings many opportunities to project financing , expected future underwriting arrangements for carrying out the role of debt financing will gradually prominent.

Sheng and Arafura Resources wording and strategic progress in relations have been more conservative . Sheng and announced that the Arafura are actively promoting the work to which they belong and the feasibility study of rare earth mining and processing of rare earth separation plant and other aspects . Given that the feasibility study , the two sides have not yet entered into any legally binding agreement. Tips and signed by the investors there are significant uncertainties of the matters MOU, drew the attention of investors to investment risks.

Arafura recently to reduce costs become operational focus. Due to the relatively weak external economic environment , the recent restructuring Arafura start by reviewing compensation programs , streamlining of redundant jobs , the implementation of short and long term incentive programs and other ways to cut costs , this year introduced a number of capital and operating cost savings plan. The large number of rare earth processing work transferred to China is an important measure to cut costs expenditures.

Lockyer disclose plans to build beneficiation field outside Australia, where instead of Nolan Bray Northern Territory , a move intended to take advantage of overseas chemical industrial zone in raw materials, chemical reagents and cost competitiveness of electricity supply , and conducive to the promotion of cooperation with potential underwriters , ultimately minimize downstream capex purposes .

In the global rare earths market outlook section , Lockyer said the recent discussion with a lot of potential customers and end users , the market for rare earth magnets can be felt (10% CARG) needs the most exuberant , this advantage is Nolan Bray project lies. Also widely used in automotive and refinery catalyst market lithium , cerium ore demand is also growing.

Notice that, as of the end of the third quarter, Arafura cash balances 29 million Australian dollars, at current levels of capital expenditure , it takes 3.5 million per quarter, the Australian dollar . Lockyer said the company has enough cash to advance the exploration and operational activities , the results of the feasibility study is expected to be released in the first half of next year . At the same time , will continue to maintain and enhance existing strategic partnerships in China and around the rest of the world in order to protect itself sufficient working capital.

Rare earth supply shortage situation in the corporate strategic layout to Australia

Arafura minority in 10 years, a world -class large reserves of rare earth projects pushed production stage companies . Nolan project in the Northern Territory of rare earth production is expected to meet 10% of global demand. In addition , due to the global supply is expected to remain scarce state Nolan include neodymium , europium, dysprosium, terbium , yttrium , including a variety of rare earth products will be considered " critical rare earth" , is expected to receive a huge shortage in global supply commercial interests.

Since 2009 , China 's major producer of rare earth industry consolidation and environmental governance, the world's rare earth supply diversification began to accelerate . However, the current foreign companies entering the production phase of molybdenum company only American and Australian rare earth mine crude saltpeter tyndareus tapas NC company (ASX: LYC) rare earth projects. From the size, composition , stage of development and mining life ( 22 years ) , the Nolan Bray project is to become the first three important goal of rare earth suppliers , production time has been tentatively scheduled for 2016 .

In fact, the attention of the Australian rare earth resources in China Enterprise unusual. Sino Finance Online database shows that in January of this year, Shandong Bureau of Geology and Mineral Exploration and Development (SDGM) and Australia TUC Resources (ASX: TUC) signed a memorandum of cooperation in the exploration and development joint venture intends TUC Northern Territory 8 heavy rare earth mineral rights lease , the two sides still in close negotiations stage ; Beijing cong Lin Group by Australian holding company Orion (ASX: ORM) and shareholding enterprises Northern Minerals (ASX: NTU) invested in a number of rare earth mining projects. In addition, the Arafura largest shareholder China East China Mineral Exploration and Development Bureau (ECE) and strategic investment in capital holdings are highlights concerns about Australia's rare earth resources .

Insiders pointed out that rare earth ore assets with outstanding long-term growth potential is a major reason to attract Chinese enterprises frequently shot . There are rare earth ore industry, " gold" , with excellent optical and electromagnetic physical properties can vary with other material properties, a wide variety of new materials , the most notable feature is the substantial increase in the quality and the performance of other products ; cutting-edge technology can be widely used in the field of military industry, metallurgy , petrochemical , electronics and aerospace industries , new materials manufacturing. As technology continues to progress and expand the field of clean energy , global demand for rare earth ore will remain strong ; rare category of demand as a key ingredient widely used in various industries magnets and phosphors are likely to be further strengthened.


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