Arafura Rare Earths have announced a binding agreement with leading wind engineering company Siemens Gamesa Renewable Energy to supply neodymium and praseodymium (NdPr).

The rare earth elements (REEs) will be sourced from Arafura’s Nolans project in Australia’s Northern Territory, and supplied over a five-year period, with an option to extend for an additional two years. The first production at Nolans is slated for 2025, with peak production reaching 4,440tpa NdPr in 2028. Under the agreement terms, Arafura will provide 200tpa of NdPr starting in 2026, increasing to 360tpa in year two and 400tpa from years three through five. The NdPr will be used to manufacture NdFeB permanent magnets, eventually employed in Siemens Gamesa’s offshore wind turbines, assembled at their Cuxhaven facility in Germany.

This marks the second offtake agreement that Arafura has secured for the Nolans project after signing a binding agreement last November for the supply of NdPr to Hyundai and Kia. Moreover, the deal is expected to bolster ongoing discussions with German export credit agency Euler Hermes, which recently provided Arafura with a non-binding letter of in-principle support up to $600M. Arafura also recently received in-principal support from the Australian Federal Government’s Northern Australia Infrastructure Facility (NAIF) to raise its project finances by $34M (AU$50M).

Based on Project Blue estimates, REE magnets used in offshore wind turbines doubled their market share over the 2010s but despite continued growth are now losing pace compared to magnets used in EVs. However, with ongoing renewable energy targets, the long-term outlook sees wind turbines account for over 20% of the total NdFeB magnet market by 2060. As it stands, about 53% of the targeted 85% annual production from the Nolans project is secured under long-term sales agreements. The deal between Arafura and Siemens Gamesa ultimately marks a critical step towards ensuring and diversifying the supply of NdPr for energy transition technologies, which remains high on government agendas.