Company Overview

Arafura Rare Earths (ASX: ARU) is an Australian mining and development company based in Perth, Western Australia, advancing its 100%-owned Nolans Rare Earths Project in the Northern Territory — one of the world’s largest undeveloped Neodymium-Praseodymium (NdPr) deposits. Originally incorporated in 1997 and listed on the ASX in 2003 as Arafura Resources, the company rebranded to Arafura Rare Earths in October 2022 to reflect its sharpened strategic focus on rare earths development.

Located 135 km north of Alice Springs, the Nolans Project anchors ARU’s ambition to become one of Australia’s first vertically integrated rare earth producers — processing ore to oxide entirely outside China. Its primary product, NdPr oxide, is a critical input for permanent magnets used in electric vehicles, wind turbines, and defence applications, with additional end markets spanning catalytic converters, consumer electronics, energy-efficient lighting, and advanced ceramics. Explore our latest coverage of Arafura Rare Earths (ASX: ARU) here.

Business Segments & Field of Activity

Arafura operates across three formal business segments:

1- Project Evaluation & Development — the core segment, encompassing all activities related to the Nolans Project (mine design, processing plant, infrastructure, environmental approvals).

2- Exploration — covering additional tenements such as Aileron-Reynolds and Jervois, all 100%-owned.

3- Corporate — administrative, governance, and financing functions.

The company's flagship activity is the Nolans Rare Earths Project. The project is unique in that it uses a fully vertically integrated, single-site ore-to-oxide model — processing raw ore all the way to separated neodymium-praseodymium (NdPr) oxides and a by-product phosphoric acid. With an operational mine life of 38 years and a planned annual output of 4,440 tonnes of NdPr oxide (Phase 1), the project is expected to supply approximately 4% of global NdPr demand from around 2032.

NdPr is a critical input for the permanent magnets used in electric vehicle (EV) motors and wind turbine generators, making Arafura a key player in the global energy transition supply chain.

Strategic Initiatives

Arafura's strategy centres on positioning itself as a trusted non-China rare earths supplier — a point of differentiation that has become increasingly valuable as geopolitical tensions and China's export restrictions on rare earths have intensified. Key strategic pillars include:

· Offtake agreements: Targeting 80% of planned production under binding agreements; currently 66% secured with Hyundai & Kia (EV magnets), Siemens Gamesa (wind energy), and global trading firm Traxys.

· Joint ventures & partnerships: Exploring JV structures to reduce Arafura's required capital contribution while retaining project control.

· Index inclusion: Arafura joined the ASX 300 index in March 2026 and received its first analyst coverage from Barrenjoey, marking a step-up in institutional investor visibility.

· Production expansion: A Phase 2 expansion targets annual NdPr output of 11,000 tonnes, placing Arafura in scale parity with established producers like Lynas Rare Earths and MP Materials.

Reasons behind the ARU share price surge and upward momentum

Here is an analysis of the primary factors fueling the stock's continuous rise:

1- Geopolitical Tensions and Export Controls

Arafura's stock has benefited significantly from a sector-wide shift toward rare-earth producers outside China. Recent Chinese export restrictions on permanent magnets and dual-use items have intensified global concerns over supply chain security. As Western nations and countries like Japan actively seek to reduce their reliance on Chinese imports, investors are betting that Arafura will emerge as a critical alternative supplier.

2- Nolan's Project Milestones

The company is making significant strides with its cornerstone Nolans Project in Australia, which is ranked among the top rare earth projects globally. The market has reacted positively to Arafura nearing a critical Final Investment Decision (FID), targeted for early 2026. Confidence has also been boosted by government funding deals, offtake memorandums of understanding (MOUs), and the company's strategic goal to produce 4,400 tonnes of NdPr oxide annually.

3- Strategic Financial Moves

In late 2025, Arafura successfully completed an equity offering that raised approximately A$9.83 million, providing crucial capital for project development. Furthermore, the company's inclusion in the S&P/ASX 300 Index has significantly enhanced its market visibility and funding path, attracting broader institutional interest.

4- Favourable Sector Tailwinds

The broader macroeconomic environment for rare earths has provided a strong foundation for Arafura's valuation. Global demand for NdPr oxides is projected to grow steadily over the next decade, fueled primarily by the expanding electric vehicle (EV) market, wind energy initiatives, robotics, and drones.

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Technical Analysis of Arafura Rare Earths (ASX: ARU)

Source: TradingView

Price action

The stock is currently trading within a well-defined ascending parallel channel, indicating a clear medium-term uptrend. After a significant spike in late 2025, when the price reached above $0.600, the stock entered a corrective phase but has since stabilised within this upward-sloping channel. The current candles show a pullback/consolidation phase, with price sitting just above the Support 1, signalling a potential re-test before the next directional move.

Key Price Levels

Resistance ~0.40: The previous rejection zone. A decisive break above this level would indicate a continuation of the upward move towards the upper boundary of the channel.

Support 1~0.32: Current trading range, previous breakout structure, mid-channel support. Holding this level maintains bullish momentum.

Support 2~0.28: This is the stronger structural support zone because it coincides with previous accumulation and aligns with channel support.

Stop Loss Analysis

The stop-loss sits below the channel's lower trendline and the Support 2 level. If the price drops into that area, the uptrend is effectively broken, and we'd recommend exiting the stock to protect your capital from further downside.

Volume Analysis

Volume shows several notable spikes during the October 2025 rally and again during the March–April 2026 recovery, indicating genuine buying interest behind the moves. The most recent selling candles in early May are accompanied by moderate-to-low volume, suggesting the pullback is a healthy consolidation rather than a distribution phase. The absence of high-volume red bars near current levels is a constructive sign for bulls.

RSI~50

RSI is sitting around 50.41, right at that neutral midpoint. If it bounces from here, that would back up the continuation momentum. A slip below the 45–40 zone, though, would suggest the trend's losing strength and calls for caution.

FAQs about Arafura Rare Earths (ASX: ARU)

1- When will Arafura Rare Earths start production?

Subject to a successful FID in Q2 2026, Nolans is expected to enter a 3–4-year construction phase, targeting first production in the second half of 2029, with ramp-up to full nameplate capacity of 4,440 tpa NdPr oxide following shortly thereafter.

2- What are the main risks of investing in Arafura Rare Earths?

Key risks include FID delays, cost overruns on the A$1.226 billion capital build, NdPr price volatility, potential equity dilution from further capital raises, and execution risk during a multi-year construction phase. The company remains pre-revenue with no commercial production to date.

3- Who heavily invests in Arafura?

Alongside substantial financial support from the Australian federal government, Arafura Rare Earths has attracted significant private investment. Notably, the company is backed by Australian mining billionaire Gina Rinehart, adding strong industry credibility and financial backing to the Nolans Project.