The Forward - Issue 07: Arafura Rare Earths

Mining & Resources · Sustainability Report

Last week we annotated MinRes, looking at what the Yindjibarndi Federal Court decision means for every operator working on Native Title land. This week we turn to a different kind of company: a junior with no operating mine, 30 employees, and a sustainability report that just helped underwrite $1.6 billion in project finance.

Arafura Rare Earths announced its Final Investment Decision (FID) for the Nolans Project on 21 May 2026, backed by Australian, US, Canadian, German and Korean export credit agencies, a $200 million federal cornerstone from the National Reconstruction Fund, and Hancock Prospecting at 17.5%. Construction starts in September, with first NdPr (neodymium-praseodymium) oxide targeted for mid-2029. The FID lands in the middle of a critical minerals geopolitical moment, with Chinese export controls making non-China rare earths supply a sovereign capability question for allied governments. Against that backdrop, Arafura's FY2025 Sustainability Report is not a marketing document. It is the culmination of two decades of project-execution work that made the financing possible.

Published 25 November 2025 - Covers year ended 30 June 2025 - 56 pages - Reported 'with reference' to the GRI (Global Reporting Initiative) Standards 2021. Aligned to Equator Principles IV, IFC (International Finance Corporation) Performance Standards on Environmental and Social Sustainability, and the Global Industry Standard on Tailings Management. UN Global Compact participant. AASB S2 (the Australian climate disclosure standard) alignment in development.

RARE EARTHS EQUATOR PRINCIPLES IV CRITICAL MINERALS

Annotated with plain-English context and our take on what it means for you

Passage 01 — The independent consultant’s finding

"The IESC (Independent Environmental and Social Consultant) recognised that while the international standards applied in the ESDD are comprehensive, Arafura's existing practices, shaped by strong Australian regulatory frameworks, were found to either meet, partially meet, or exceed many of the assessed requirements. Where Australian standards surpassed international benchmarks, no additional action was required. The ESDD (Environmental and Social Due Diligence) focused on identifying areas where further alignment with global standards is needed, and these have been addressed through a targeted Environmental and Social Action Plan (ESAP)."

- Arafura FY2025 Sustainability Report, page 13

Our Take

The Environmental and Social Due Diligence (ESDD) referenced here was conducted by an Independent Environmental and Social Consultant (IESC) on behalf of project lenders. It is the most important element to note about this report. Nine export credit agencies and commercial banks across five countries committed more than US$1 billion of conditional debt in July 2024 because an independent third party assessed Arafura's practice and found it credible. Not the brochure. The practice.

The Environmental and Social Action Plan (ESAP) that came out of the ESDD is now a covenant of the project finance facilities. For every junior building a sustainability report, the question is whether the underlying operational work would survive the same audit, or whether the report is running ahead of the practice.

💡 Plain English: Lenders did not lend on the strength of the report. They lent on the strength of what an independent consultant found when they audited what Arafura has committed to. The report is the formalised commitment.

Passage 02 — The Anmatjere partnership

"In FY2024 we established a Project Liaison Committee. Since then, we have worked closely with our Traditional Owners and the Central Land Council (CLC) to establish two sub-committee working groups. One is for Workforce Development and the other for Community Development. Nominees from the Traditional Owners have been elected and the groups will continue working with us and the CLC to co-design programs to benefit our local Indigenous communities through training, employment opportunities and community development."

- Arafura FY2025 Sustainability Report, page 34

Our Take

Native Title agreement was executed with the Anmatjere People in June 2020. Six years on, the relationship is structured through a Liaison Committee with Traditional Owner nominated representatives, two sub-working groups on workforce and community development, and live commercial pathways including Penangke Cultural Consultants and a Blaak Line bus services joint venture. This is what post-ILUA (Indigenous Land Use Agreement) partnership infrastructure looks like when a company is doing it rather than describing it.

Read it honestly though. Workforce targets of 4% Indigenous in construction and 20% aspirational in operations have not been tested because the project has not started. The next 30 months determine whether the structures translate into outcomes.

💡Plain English: The partnership structures are real. The construction-phase and operations-phase targets are aspirational and not yet tested. A note on language: the quoted passage uses the phrase "our Traditional Owners". CFS does not endorse that phrasing as it infers the company has some form of ownership over Traditional Owners and the land itself, which is of course inaccurate.

Passage 03 — The critical path on the ground

"To date, three of the five EMPs have been approved. Arafura's Water Abstraction Management Plan was approved in FY2024; Arafura's Biodiversity Management Plan was developed and approved in FY2025; and Arafura's Radiation Protection and Radioactive Waste Management Plan was developed in FY2025 and approved shortly after in July 2025. With the approval of these EMPs, Arafura has all necessary EPBC approvals to commence construction of the Nolans Project."

- Arafura FY2025 Sustainability Report, page 24

Our Take

This is the project execution critical path in rare earths language. Five federal Environmental Management Plans (EMPs) are required before construction, under the EPBC Act (Environment Protection and Biodiversity Conservation Act 1999). Three are approved. Without the Biodiversity Management Plan, no earthworks. Without the Radiation Protection and Radioactive Waste Management Plan, no processing plant build. The Nolans ore body contains naturally occurring radionuclides, which is why Arafura's single-site ore-to-oxide model exists at all. The alternative is shipping an intermediate product to a foreign jurisdiction.

For executives running juniors with critical mineral exposure, this is the sustainability story that matters. Not framework alignment. The list of approvals required before a shovel goes in the ground, and the design choices made to manage the host ore body's actual characteristics.

💡 Plain English: Five environmental approvals are required before Arafura can break ground. They have three. You can always expect sustainability to be on the critical path of project execution.

Environmental and Social Due Diligence (ESDD) and Environmental and Social Action Plan (ESAP):

The ESDD is an independent assessment of a project's environmental and social risks and management practices, commissioned by project lenders and conducted by an Independent Environmental and Social Consultant. The ESAP is the binding corrective action plan that comes out of the ESDD, with named actions and timeframes. For Arafura, the ESDD was assessed against the IFC Performance Standards, Equator Principles IV, and the Global Industry Standard on Tailings Management. Ongoing compliance with the ESAP is a covenant of the project finance facilities.

Critical Minerals Strategic Reserve:

A framework operated by Export Finance Australia under which the Commonwealth provides guaranteed offtake or other support to nominated critical minerals projects. Arafura received a non-binding letter of support from EFA under this framework, covering 500 tonnes per year of NdPr oxide. The commitment pushed Arafura's contracted offtake from below 80% to 80.4% of nameplate capacity, crossing the board's internal gate condition for FID.

Environmental Plans under the EPBC Act:

The Environment Protection and Biodiversity Conservation Act 1999 is the Commonwealth's primary environmental legislation. For projects assessed as a controlled action, approval is typically conditional on the development and approval of specific Environmental Management Plans before relevant scopes of work can commence. Arafura's Nolans Project requires five EMPs: Water Abstraction, Biodiversity, Radiation Protection and Radioactive Waste, Acid and Metalliferous Drainage, and the Kerosene Camp Creek Management Plan. Three are approved.

⛏️ This week at CFS - Project execution capability for critical minerals juniors

Arafura's path to FID shows what disclosure looks like when it sits on top of operational substance. For critical minerals juniors approaching PFS (Pre-Feasibility Study), DFS (Definitive Feasibility Study), financing or construction readiness, CFS Groundwork delivers ESG concurrently with PFS, DFS and project implementation planning, mapped to capital raise cycles, so the operational work is in place before the lender's independent consultant arrives.

Get in touch by emailing Bronwyn directly.

CFS Cantilever Future Solutions

ESG & sustainability advisory · Mining & Energy

Perth, Western Australia

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