It has been a rough month for Arafura Rare Earths Ltd (ASX: ARU) shareholders, but Friday is finally bringing some relief.
The Arafura Rare Earths share price is up 4.41% to 17.8 cents in morning trade after the rare earths developer released a new offtake update.
That comes after the stock fell to a 52-week low of 16.5 cents earlier this week.
Even with today's rise, the shares are still down around 17% over the past month and 34% since the start of 2026.
So, let's take a closer look at the details.
Image source: Getty Images
Arafura locks in more demand
According to the release, Arafura has extended an existing binding offtake agreement with a global wind turbine manufacturer.
The deal covers the supply of up to 500 tonnes per annum of neodymium-praseodymium (NdPr) oxide equivalent from the Nolans Project in the Northern Territory.
The initial contract runs for 5 years, with the potential to extend it to 8 years.
Pricing will be in US dollars and linked to independent global rare earth pricing indexes, including Benchmark Mineral Intelligence or S&P Global Platts North America.
Arafura hasn't named the customer, saying it doesn't plan to disclose counterparties unless their identity is considered material.
The company also said it remains in discussions with a number of other parties over additional offtake.
This means that at the maximum annual volume, this agreement would represent just over 11% of Nolans' planned NdPr production.
Construction is getting closer
The latest offtake deal adds another piece to Arafura's plans to move the Nolans Project from development into construction.
Nolans is designed to produce 4,440 tonnes of NdPr oxide each year over a planned 38-year mine life. Arafura says the project could eventually supply around 4% of global demand.
NdPr is used in permanent magnets in products such as electric vehicles and wind turbines.
The board made its final investment decision (FID) in May, with construction targeted to begin from September.
Management said project financing is in its final stages, with contractual close and strategic equity subscription settlement targeted for October.
Foolish takeaway
I like this update, particularly with Arafura locking in more demand ahead of construction at the Nolans Project.
The agreement covers a decent chunk of future production and gives the company another customer before the project is even built.
And with financing also nearing completion, I think Arafura shares are starting to look more attractive at these levels.
At 17.8 cents, I'd be keeping a close eye on Arafura shares as the company moves closer to getting Nolans off the ground.
