Arafura Resources slices $244M off Nolans CAPEX

THE BOURSE WHISPERER: Arafura Resources (ASX: ARU) has reduced the estimated capital expenditure (CAPEX) for the company’s 100 per cent-owned Nolans rare earths (RE) project in the Northern Territory.

The total initial CAPEX for the Nolans project is now estimated at $1.193 billion (or US$835 million at A$1 = US$0.7) inclusive of 20 per cent contingency but excluding deferred capital.

It comprises direct costs of $764 million at the Nolans Site in Australia and $95 million at the offshore RE separation plant.

Arafura said that since it commenced initiatives in April 2013 to improve the viability and fundability of the Nolans project, the CAPEX estimate has been reduced by $719 million, or 38 per cent.

“The initial CAPEX investment for the establishment of the Nolans project may be further reduced through ongoing value engineering including modularisation, review of plant layout to reduce construction costs associated with concrete, piping and electrical, and financial packaging, including build own and operate (BOO) of the more conventional plant infrastructure requirements such as contract crushing,” Arafura Resources said in its ASX announcement.

“CAPEX savings from these initiatives are estimated to be $30 million, potentially further reducing the initial project CAPEX to $1.163 billion.”

Email: arafura@arultd.com.au

Website: www.arafuraresources.com.au