Arafura Tapping APA to Develop Gas-Fired Cogeneration to Power Rare Earth Mining in Australia

Aug. 6, 2023
Arafura is contracting APA to begin early engineering, design and project development for the cogeneration plant to supply the Nolans Rare Earth Project. Arafura’s Nolans Project includes a mine & processing plant in the nation's northern region.

Australian-based minerals exploration firm Arafura, which has vowed to reach net-zero greenhouse gas emissions by 2050, is also proposing to contract for a gas-fired cogeneration plant, essentially a giant microgrid, to supply energy directly to a project mining rare earth elements needed for advanced green technologies.

Arafura is contracting fellow Aussie company APA to begin early engineering, design and project development for the cogeneration plant to supply electricity and heat for the Nolans Rare Earth Project. Arafura’s Nolans Project includes a rare earth mine, processing plant and infrastructure some 135 kilometers north of Alice Springs in the nation's northern region.

If completed and commissioned, APA would be independent power provider connecting the plant’s electricity generation directly to the mining and processing operation under a long-term power purchase agreement. The cogeneration plant likely could be connected to an APA natural gas pipeline, as well.

The deal still needs numerous company and regulatory approvals. The Arafura Nolans project would mine for neodymium and praseodymium—minerals used in production of components for electric vehicles, wind turbines and electronics, according to the report. It also provides an alternative to China-sourced rare earth elements.

Arafura Rare Earths has secured more than $1 billion in funding for the project. It hopes to reach completion on the mine by 2025.

“We are excited to play this role in the global decarbonization process and contribute towards bringing these critical minerals to market,” APA CEO Adam Watson said in a statement. “We will also work with Arafura to explore how can deliver a bundled energy solution, pairing reliable gas firming with renewables for the project.”

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Microgrids in Mining Operations

The Nolans site is estimated to hold about 56 million metric tons of rare earth ore reserves, according to Arafura. Especially important are the deposits of  NdPr oxide, or the non-separated oxide of neodymium and praseodymium.

Among its announced goals toward net zero GHG emissions by 2050, Arafura has indicated a commitment toward concentrated solar thermal energy for steam generation in the decades ahead.

The company, however, also has acknowledged the current market and need for natural gas and the commercial viability considerations of its energy decisions.

“We recognize we will need to address a range of challenges in decarbonizing rare earth processing, which is, by its nature, an energy intensive process,” Arafura Rare Earth’s Managing Director Gavin Lockyer was quoted as saying in the company’s most recent sustainability report.

“Nonetheless, the Arafura team is committed to implementing a practical, cost-efficient pathway to net zero. We will keep a close watch on changes in the price, technology maturity and availability of relevant technologies, such as long-duration energy storage, and update the GHG emissions reduction pathway in future if it is appropriate to do so.”

Traditional power generation equipment manufacturers such as Caterpillar and MTU, among others, are working on cleaner microgrid solutions for often carbon-intensive mining operations around the world. The mining firms are looking for renewable and cleaner energy alternatives to coal and diesel, which carries troublesome environmental and supply challenges.

Natural gas, meanwhile, can reduce carbon dioxide emissions by 50 to 60 percent compared to coal-fired power and lower CO2 and nitrous oxide than diesel, according to reports. However, natural gas is made up mainly of methane, itself considered a worse greenhouse gas than CO2 by many environmental scientists. 

About the Author

Rod Walton, Managing Editor | Managing Editor

For Microgrid Knowledge editorial inquiries, please contact Managing Editor Rod Walton at [email protected].

I’ve spent the last 15 years covering the energy industry as a newspaper and trade journalist. I was an energy writer and business editor at the Tulsa World before moving to business-to-business media at PennWell Publishing, which later became Clarion Events, where I covered the electric power industry. I joined Endeavor Business Media in November 2021 to help launch EnergyTech, one of the company’s newest media brands. I joined Microgrid Knowledge in July 2023. 

I earned my Bachelors degree in journalism from the University of Oklahoma. My career stops include the Moore American, Bartlesville Examiner-Enterprise, Wagoner Tribune and Tulsa World, all in Oklahoma . I have been married to Laura for the past 33-plus years and we have four children and one adorable granddaughter. We want the energy transition to make their lives better in the future. 

Microgrid Knowledge and EnergyTech are focused on the mission critical and large-scale energy users and their sustainability and resiliency goals. These include the commercial and industrial sectors, as well as the military, universities, data centers and microgrids. The C&I sectors together account for close to 30 percent of greenhouse gas emissions in the U.S.

Many large-scale energy users such as Fortune 500 companies, and mission-critical users such as military bases, universities, healthcare facilities, public safety and data centers, shifting their energy priorities to reach net-zero carbon goals within the coming decades. These include plans for renewable energy power purchase agreements, but also on-site resiliency projects such as microgrids, combined heat and power, rooftop solar, energy storage, digitalization and building efficiency upgrades.

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