Arafura Rare Earths has signed a Memorandum of Understanding (MoU) with Canada's research and technology organisation, Saskatchewan Research Council, to enhance the global rare earth elements supply chain.

The MoU focuses on processing samarium-europium-gadolinium/heavy rare earths (SEG/HRE) products from Arafura's Nolans Project at SRC-owned rare earth processing facility in Saskatoon, Saskatchewan, Canada.

This will create dysprosium (Dy) and terbium (Tb) oxide, which are key components in high-performance magnets used in electric vehicles.

The partnership will establish a framework for processing Arafura's annual production of 573 tonnes of SEG/HRE oxide, containing around 25 tonnes of dysprosium and eight tonnes of terbium.

Arafura said the collaboration is aligned its strategy to market its main product, Neodymium-Praseodymium (NdPr) oxide, and supports the company's vision for the Nolans Project as a processing hub for enriched Heavy Rare Earths.

The Nolans Project's Phase II expansion plan includes the potential to increase SEG/HRE recovery by up to 47%, reducing losses and enhancing production.

Currently, the heavy rare earths supply is largely dependent on sources from Myanmar and processing in China.

Arafura's initiative with SRC represents a significant step towards diversifying the supply chain and establishing a more geostrategically balanced source of these critical materials.

The MoU also sets the stage for future negotiations on a long-term agreement for the sale and purchase of NdPr oxide from Arafura for SRC's metal smelting operations.

Arafura MD and CEO Darryl Cuzzubbo said: “This MoU has established an exciting Australia/Canada partnership. Heavy rare earths are vital for high-performance rare-earth magnets, and by collaborating, we will be geared to stay ahead of the global demand curve as the world transitions to a lower-carbon future.”