Noble Group to take stake in Australian rare earths developer

This article is more than 12 months old

Jun 21, 2019 06:00 am

MELBOURNE: Commodities trading company Noble Group is set to take a small stake in ambitious Australian rare earths developer Arafura, raising its exposure to strategic minerals critical to high-tech industries and electric vehicles.

In a filing yesterday, Arafura said Noble's rare earths subsidiary Talaxis would underwrite A$7.2 million (S$6.8m) of the A$23.2 million share offering. According to Reuters calculations, that would give Talaxis a stake in Arafura of around 8 per cent.

The offering was priced at a discount - 8.5 Australian cents compared with 12.5 Australian cents on Wednesday's close - sending shares in Arafura skidding 20 per cent yesterday.

Rare earths are a group of 17 minerals critical to a wide array of industries.

China is the world's largest producer of the minerals, and state-owned news outlets have reported that as part of the trade dispute, China could cut its shipments to the US, which imports 80 per cent of its rare earths from China.

The investment is Noble's second into a rare earths project. It is the largest shareholder in Canada-listed Mkango Resources, which has a high-grade rare earths deposit in Malawi, with a 12.5 per cent stake. - REUTERS