Arafura Rare Earths (ASX:ARU) signed a binding term sheet with a member of an Indian industrial group for 500 tonnes per annum of rare earth magnet feed, including neodymium-praseodymium oxide, over a minimum five-year period, according to a Tuesday Australian bourse filing.

The price payable by the Indian firm will be determined with reference to a seaborne traded index, the filing said. The term sheet has an option to extend for a further two years by mutual agreement.

The term sheet is subject to the execution of full form documentation, as well as the offtake partner being selected, approved, and formally designated as a beneficiary under an Indian government scheme for establishing production capacity of sintered rare-earth magnets in the country.

Priority activities relating to the reinstatement of site-based camp facilities, water, and power were completed at the Nolans project in the Northern Territory, per the filing. The company plans to begin construction in September.