A rare earths minnow has won more than $1 billion from the federal government to supercharge the industry in Australia as allies race to secure supplies outside China.
An investment of $200 million to fast-track the Arafura Rare Earths mine and refinery project in the Northern Territory was announced by the National Reconstruction Fund Corporation announced on Wednesday.
"It's got huge economic importance - 600 jobs will be created just in the construction phase and another 350 ongoing jobs for local workers," Industry and Science Minister Ed Husic told reporters.
The latest federal funding brings taxpayer support to more than $1 billion in less than a year for the Gina Rinehart-backed Nolans Project, 135km north of Alice Springs.
"We've got one of the largest endowments of rare earths on the planet and the global market is expected to double over the next decade," Mr Husic said.
"It's not just about digging it up and shipping it off, it's the value add," he said, which is at the heart of the fund's investment mandate.
Arafura managing director Darryl Cuzzubbo said an investment of this significance by the fund corporation, it's largest to date, highlighted the importance of the project to local processing capabilities and building resilience in a global supply chain.
The cornerstone investment is expected to attract additional investors and strategic partners to move the project closer to a final investment decision.
Shares in Arafura Rare Earths surged more than 20 per cent in morning trade to 14 cents after the latest taxpayer-funded injection of capital was revealed.
Fund chair Martijn Wilder said the "nation-building project" would play a key role in the future of Australian industry and manufacturing.
Rare earths are essential for defence technologies and advanced communications as well as clean energy equipment including wind turbines and electric vehicles.
The mining and refining of vital minerals is a priority for the NT government, while a sovereign supply chain outside China is strategically important for Australia and its allies.
Alice Springs will be used as the logistics hub for the construction and operational phases of the project, reflecting the fund's mandate to grow regional economies.
"It is not only expected to create hundreds of local jobs, but also business opportunities for local SMEs and the potential for shared regional infrastructure,” Mr Wilder said.
Aiming to be Australia’s first neodymium and praseodymium ore-to-oxide processing facility, the construction-ready and fully permitted project also has the support of international financiers.
The mine and processing plant is forecast to produce about 4440 tonnes per annum, which is expected to account for around four per cent of global demand from 2032.
