The Arafura Rare Earths Ltd (ASX: ARU) share price has started the month in a very positive fashion.
In early afternoon trade, the rare earths developer's shares are up over 7% to 64.5 cents.
Why is the Arafura share price charging higher?
Investors have been buying the company's shares today despite there being no news out of it.
However, it is worth noting that investors have been piling into the resources sector on Wednesday, which has driven the S&P/ASX 200 Resources index almost 2% higher.
This compares favourably to the 0.1% decline being recorded by the ASX 200 index this afternoon.
Big annual gain
Today's gain means that the Arafura share price is now up over 200% since this time last year, as you can see on the chart below.
The catalyst for this has been excitement around the globally significant Nolans Project in the Northern Territory.
This project appears well-placed for the future thanks to forecasts for neodymium and praseodymium (NdPr) demand doubling from 2020 to 2030. And with supply tipped to remain constrained, Arafura could benefit from strong prices once it commences production.
NdPr are critical minerals in the production of high-performance neodymium magnets. These are used in everything from mobile phones and electric vehicles to wind turbines and military weapons.
