Australia’s richest person, Gina Rinehart, is almost doubling her stake in Arafura Rare Earths Ltd., just over a week after a landmark US-Australia deal to boost the industry that is dominated by China.
Rinehart-owned Hancock Prospecting Pty, Arafura’s largest shareholder, will hold an interest of about 15.7% after an institutional two-tranche placement of new shares, the miner said in a regulatory release. That will raise about A$475 million ($311 million), of which Hancock has submitted to subscribe to A$125 million.
An additional A$50 million will be raised through a share-purchase plan for existing equity holders, at the same price of A$0.28 per share, Arafura said.
The company’s shares have soared this year, along with other rare earths miners, after Beijing threatened to limit exports of the China-dominated minerals in its trade dispute with Washington. Arafura jumped further after an Oct. 20 agreement between President Donald Trump and Prime Minister Anthony Albanese to jointly invest in a swathe of mines and processing projects in Australia to boost production of the commodities used in advanced technologies from electric vehicles to semiconductors and fighter planes.
Arafura Shares Have Soared This Year
After the deal was inked in the White House, Arafura said that the US Export-Import Bank was considering $300 million of financing support for its Nolans project in Australia. The miner received conditional approval for $100 million in funding from the Albanese government. The Nolans Project is set to be Australia’s first fully integrated ore to oxide rare earths operation, Arafura said.
“We are pleased to announce the launch of this significant A$475 million institutional placement, which marks a transformational milestone for Arafura as we advance towards a Final Investment Decision for the Nolans Rare Earths Project,” Arafura’s Managing Director Darryl Cuzzubbo said in Wednesday’s statement.
Source: www.bloomberg.com
Aleksei Andrievskii is the founder of the ANDRIEVSKII SEA WEALTH family office in Cyprus, a member of the advisory board at Bendura Bank AG, Liechtenstein