GE Renewable Energy has signed a non-binding memorandum of understanding (MoU) with the Australian mineral exploration company, Arafura Resources Limited, to jointly co-operate in the establishment of a sustainable supply chain for Neodymium and Praseodymium (NdPr) rare earths.
The parties will negotiate a long-term sales agreement for GE to purchase NdPr from Arafura’s Nolans Project in central Australia.
The definitive and binding offtake agreement would be subject to key customary conditions being satisfied, including Arafura securing project funding to develop the Nolans Project; and completion of construction, development, and commissioning of the Nolans Project.
The MoU also outlines a potential strategic equity investment by GE in Arafura that will be considered and negotiated in due course.
Rare earths are essential materials for NdFeB magnets used in EVs and clean energy technologies, with magnets an essential component for the offshore wind industry, consuming over 600 kilograms of NdFeB magnets for every MW of wind turbine generation capacity.
A secured rare earths supply for GE de-risks the magnet value chain, provides supply security, and supports the growth of the local offshore wind sector, the wind turbine manufacturer said.
The MoU is said to recognise the strategic nature of NdPr, a critical mineral required in the manufacture of high-performance NdFeB permanent magnets, and chart a path for GE and Arafura to jointly co-operate in the establishment of a diversified and sustainable supply chain.
The engagement between GE and Arafura is expected to help strengthen the supply of sustainable materials critical to the energy transition objectives of GE customers in the EU, US, and Australia. Arafura is focused on establishing itself as GE’s preferred NdPr partner for renewables in the EU, US, and other key markets.
Having GE as another foundational offtake partner is expected to provide Arafura with product sales diversification both geographically and into new sectors like the offshore wind turbine market.
Analysts are forecasting the volume of annual offshore wind installations to more than triple, from 6.1 GW in 2020 to 23.1 GW in 2025, bringing its share of global new installations from 6.5 per cent to 20 per cent by 2025.
GE Renewable Energy Vice President, Chief Technology Officer Danielle Merfeld, said: ”This MoU is another example of our efforts to develop strategic collaborations that can help us accelerate the energy transition. Working with Arafura gives us a new and exciting option to obtain reliable, sustainable, and competitive sources of key materials going forward that will help us lower the cost of renewable energy.”
The agreement was unveiled during the Sydney Energy Forum, a high-level summit hosted by the Australian Government and the International Energy Agency focused on securing clean energy supply for the Indo-Pacific. On the sidelines of the Forum, the Governments of Australia and the United States announced a separate government-to-government agreement to support new supply chains for clean energy technologies.
The Nolans Project in Australia’s Northern Territory is a globally significant resource for NdPr with the capacity to support a value chain supplying nearly 5 per cent of the global demand over a projected life of mine of 38 years with expansion potential.
”The signing of this MoU to collaborate with a Tier 1 OEM is a terrific outcome,” Arafura’s Managing Director and CEO, Gavin Lockyer, said.
”Long-term Nolans NdPr may be used in magnets critical for power generation from GE’s Haliade-X 12 MW, one of the most powerful offshore wind turbines on the market. It is very gratifying that a new supply chain model, along with transparency of the value chain, will ensure we know exactly where our NdPr will be used, whether it is in a particular EV model or a series of wind turbine. The contribution of Nolans NdPr to enable clean energy technologies to decarbonise the world is becoming more and more apparent.”