Highlights

  • Arafura's wholly-owned Subsidiary, Arafura Nolans Project Pty Ltd, has entered into a binding offtake term sheet with Traxys North America LLC to Supply 500 tonnes per annum of NdPr oxide from the Nolans Project, separate from and in addition to the existing Traxys Europe supply agreement.
  • The agreement, which covers 500tpa NdPr oxide and 7.5tpa DyTb oxide over five years with a two-year extension option, is intended to support US supply chain onshoring across automotive, defence, and advanced technology sectors, with potential supply into US EXIM's Project Vault.
  • Pricing will be denominated in USD and linked to a global, seaborne index such as the Benchmark Minerals Intelligence indices or S&P Global Platts North America pricing index, providing transparent market-based pricing.

 

Arafura Rare Earths Limited (ASX:ARU) traded at $0.36 on the ASX on 13 May 2026, recording a share price surge of 9.09%. The company released an update concerning its latest commercial milestone : a binding offtake term sheet with Traxys North America LLC, a leading global physical trader and merchant in the metals and natural resources sectors.

Arafura is developing the Nolans Project, a rare earths mine and processing Facility located in the Northern Territory of Australia, which would produce neodymium-praseodymium (NdPr) oxide and dysprosium-terbium (DyTb) oxide — materials used in the manufacture of high-performance permanent magnets. These magnets are critical components in electric vehicle motors, wind turbines, defence systems, and a wide range of advanced technology applications. The Demand outlook for NdPr oxide in particular is closely linked to the global electrification transition, giving Arafura's development asset significant long-term strategic relevance.

The Traxys North America Agreement: Terms and Structure

The binding term sheet with Traxys North America LLC commits Arafura to supply 500 tonnes per annum of NdPr oxide and 7.5 tonnes per annum of DyTb oxide from the Nolans Project. The agreement has a term of five years with an option to extend by a further two years by mutual agreement. The agreement is binding subject to conditions precedent, including the execution of long-form documentation — which the company expects to finalise and execute within six months of the term sheet — and Arafura completing an FID for the Nolans Project.

Pricing will be denominated in US dollars and will be based on a global, seaborne pricing index, with candidates including the recently established Benchmark Minerals Intelligence indices or S&P Global Platts North America pricing index. The use of independent, transparent pricing indices is a commercially important feature of the agreement: it provides Arafura with market-linked pricing that captures upside in improving rare earths price environments, while providing Traxys and its Downstream customers with reference to widely observable price benchmarks for supply chain accounting and hedging purposes.

Strategic Context: US Supply Chain Onshoring

Traxys North America has indicated its intention to supply the NdPr oxide into the US supply chain, including the potential supply into US EXIM managed Project Vault — a government-supported initiative designed to develop secure, domestic supply chains for critical minerals that reduce US dependence on Chinese rare earths processing and supply. This context is significant for two reasons. First, it positions the Nolans Project product stream as potentially eligible for US government-backed purchasing programmes, which can provide additional demand security and pricing support. Second, it reflects the broader geopolitical trend of Western governments actively constructing alternative supply chains for critical minerals, in which Australian producers are increasingly preferred partners.

This agreement is entirely separate from and additional to the company's earlier offtake agreement with Traxys Europe SA, announced on 20 March 2025, which covers the supply of up to 300 tonnes per annum of NdPr oxide. Together, these two Traxys agreements represent a committed demand framework for 800 tonnes per annum of NdPr oxide from the Nolans Project — a material component of the total NdPr oxide production the project is designed to deliver.

Building the Offtake Framework for FID

For a development-stage Mining and processing company like Arafura, the accumulation of binding offtake commitments is one of the most critical prerequisites for securing project financing and proceeding to an FID. Lenders and Equity investors providing the multi-hundred-million-dollar Capital packages required for large mineral processing projects typically require demonstrated demand for the product, transparent pricing mechanisms, and creditworthy counterparties as conditions of their participation. Traxys, as a global commodities trader generating approximately US$10 billion in annual Revenue with over 500 employees and a 100-year operating history, represents a credible and commercially substantial offtake partner.

Managing Director Darryl Cuzzubbo's commentary in the announcement emphasised the long-term, strategic nature of the partnerships Arafura is building, framing them not merely as transactional sales arrangements but as reflections of industry and government-aligned thinking about the importance of resilient critical minerals supply chains. This framing is consistent with the broader positioning of Australian rare earths developers as preferred suppliers to Western industrial and government buyers.

About Traxys

Traxys is a leading global physical trader and merchant across base metals, concentrates, minor and alloying metals, industrial minerals, chemicals, and materials for steel mills and foundries. The company trades over 65 commodities and generates approximately US$10 billion in annual revenue, operating through over 20 global offices with more than 500 employees. Traxys has committed to ESG standards for responsible sourcing and trading of metals and minerals, making it a commercially and reputationally appropriate partner for Arafura's Nolans Project as it advances toward FID.

Conclusion

The Traxys North America binding offtake term sheet is a meaningful step forward in Arafura's commercialisation strategy for the Nolans Project. It adds 500 tonnes per annum of NdPr oxide to the offtake framework, brings US government supply chain linkages into the demand picture, and further establishes the Traxys relationship as a multi-geography, multi-product commercial Partnership. As Arafura works toward its FID, each additional binding offtake commitment strengthens the commercial case for the project and reduces the financing risk that lenders and investors must price. The combination of an improving rare earths demand outlook, Western government critical minerals policy support, and an increasingly complete offtake framework positions Nolans as one of the more strategically significant rare earths development Assets in the Australian pipeline.