Arafura Rare Earths has extended the deadline on key conditions for its gas supply agreement with Horizon Oil and Echelon Resources, a move seen as crucial to securing long-term energy supply for its Nolans Rare Earths Project in the Northern Territory. 

The agreement, which provides up to 27.4 petajoules of gas from the Mereenie joint venture over five years from 2026, was initially subject to conditions that were due to be met by February 4. The revised deadline of March 31, 2025, allows additional time for Arafura to finalise financing, ensuring the project's viability amid a tightening global rare earth supply chain. 

Reliable gas supply is critical for Nolans' long-term success, which aims to become a major global producer of neodymium and praseodymium (NdPr)—minerals essential to electric vehicles and wind turbines.  

The project has already secured offtake agreements with Siemens Gamesa and Hyundai, with further negotiations underway as Western economies seek to reduce dependence on Chinese rare earths. 

Echelon Resources director Andrew Jefferies said Mereenie and Palm Valley were well-positioned to meet Arafura's long-term demand, pointing to ongoing drilling success in mature gas fields. 

"Both Mereenie and Palm Valley gas fields are big structures with room for more wells. As our recent Mereenie WM29 well result demonstrates, there is gas there for the drilling," Jefferies told Energy News Bulletin.  

"Like any mature field, you have to be smart and apply the best technology appropriate to the conditions you have … you can find gas in old fields using new ideas." 

The extension highlights the importance of gas in supporting Australia's critical minerals sector, even as the federal government pushes for economy-wide decarbonisation. High-temperature processing at Nolans requires a stable energy source, and delays in securing gas could risk setbacks for the project. 

For Horizon and Echelon, the agreement provides long-term demand certainty, strengthening Mereenie's position in the NT's energy market. With ongoing concerns about east coast gas shortages, deals of this nature help ensure market stability for domestic producers. 

Jefferies said the extension primarily reflected Arafura's need to complete its financing, rather than fundamental changes to the gas agreement. 

"This is just extending the deadline for Arafura while they line up their financing, which is never easy for new mines," he said.  

"Between this contract and the long-term deal with the NT government, we've had the certainty to undertake the current Mereenie wells." 

While the extension provides additional time for Arafura, Jefferies acknowledged that market conditions could influence future terms. 

"Terms are always subject to change as markets develop," he said.

"This is just a short-term extension to provide more time for Arafura's financing to come together, so terms have reflected that." 

If finalised, the deal would mark a significant milestone for Arafura as it seeks to establish itself as a leading rare earth supplier outside China, reinforcing Australia's position in the global critical minerals race. 

To view the full article by ENB, click here.

Source: Energy News Bulletin