Arafura share price halted ahead of blockbuster funding news

This rare earths developer could be about to sign a game-changing funding package.

| More on:
A young woman with her mouth open and her hands out showing surprise and delight as uranium share prices skyrocket

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Arafura Rare Earths Ltd (ASX: ARU) share price is expected to be out of action on Thursday.

That's because yesterday the rare earths developer requested a trading halt until the market open on Friday.

Why is the Arafura share price halted?

The company requested the trading halt so that it could prepare an announcement relating to debt funding for the Nolans Project in the Northern Territory. Its request states:

The Company is seeking a trading halt pending an announcement to the market regarding debt financing support; b) The Company requests the trading halt remain in place until the earlier of the Company releasing an announcement in relation to debt financing support or the commencement of trading on Friday 15 March 2024.

What's going on?

While the details of the debt funding have not been released to the market yet, there are reports claiming that Arafura is about to get a huge cash injection from the government.

According to the AFR, the Albanese government is expected to announce an $840 million package of loans and grants to support the development of the Nolans Project.

This will be the Labor government's largest single financial commitment in the critical minerals sector and brings taxpayers' exposure to rare earths mining and processing to over $2 billion. Previously the government has supported the development of the Eneabba project owned by Iluka Resources Limited (ASX: ILU) in Western Australia.

Arafura's funding reportedly includes approximately $495 million in loans from the Critical Minerals Facility, $200 million from the revamped Northern Australia Infrastructure Facility, and upwards of $115 million in federal export financing.

Prime Minister, Anthony Albanese, is quoted saying:

This will create local jobs and economic opportunities, helping Australian and Territory companies and workers capture more value from the game-changing critical minerals deposits we have here.

The Arafura share price is down 72% over the last 12 months.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Industrials written in orange.
Share Market News

Why did ASX 200 industrial shares lead the market last week?

ASX 200 industrial stocks led the market with a 2.93% rise, while the benchmark index lifted 0.52%.

Read more »

A man looks surprised as a woman whispers in his ear.
Broker Notes

These ASX 200 shares could rise 20% to 40%

Analysts are tipping these shares to deliver market-beating returns over the next 12 months.

Read more »

a young woman looks happily at her phone in one hand with a selection of shopping bags in her other hand.
Share Market News

This leading fundie just bought more Zip shares. Here's why

Are Zip shares worth a closer look following institutional backing?

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a spectacular end to the trading week for the ASX today.

Read more »

A piggy bank on the cloud in the blue sky symbolising a record high share price.
52-Week Highs

These 13 ASX 200 shares just hit new 52-week highs

These shares had a fine send-off to the weekend this Friday.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why AMP, Civmec, Cochlear, and LGI shares are falling today

These shares are ending the week in the red. But why?

Read more »

Three people jumping cheerfully in clear sunny weather.
Share Gainers

These 3 ASX 200 stocks are shooting the lights out this week. Own any?

These ASX 200 shares have soared 11% to almost 23% this week. But why?

Read more »