Gina Rinehart Expands Stake in Arafura Rare Earths Despite Stock Slump

Australia’s richest woman, Gina Rinehart, has significantly increased her investment in Arafura Rare Earths Ltd, doubling down even as the company’s shares suffered a sharp decline. Through her company Hancock Prospecting, Rinehart has raised her stake to 15.7%, committing approximately A$125 million (US$81.2 million). This marks a substantial increase from her previous 7.19% holding, based on data from LSEG.

The investment move comes as Arafura announced a two-tranche share placement to raise about A$475 million. The offer price was set at A$0.28 per share, representing a 25% discount from its previous close. Following the announcement, Arafura’s shares plunged 22.7% to A$0.29, marking their weakest performance since June 2021 and hitting the lowest level since October 10.

Despite the immediate market reaction, Rinehart’s move signals strong confidence in Arafura’s long-term prospects, particularly in the rare earths sector, which is vital for electric vehicles (EVs), renewable energy technologies, and defense applications. Arafura’s Nolans Project in the Northern Territory is among Australia’s most promising rare earth ventures, expected to play a crucial role in diversifying global supply chains away from China.

In addition to the placement, Arafura plans to initiate a share purchase plan (SPP) aiming to raise another A$50 millionat the same discounted price. The capital raised will support project development and expansion initiatives.

By bolstering her stake amid a market downturn, Rinehart underscores her strategic belief in the future of Australia’s rare earth industry and its importance to the global clean energy transition.