| Arafura Resources Limited |

The price of rare earth products has increased significantly over the past 3 years due to the constraints placed on mining, processing and export by the Chinese authorities. This is despite a temporary decline during the global financial crisis.

Within days of the China Ministry of Commerce announcing a drastic cut in the rare earths export quotas in July 2010 pricing for all rare earth oxides rose to historical highs. This trend has continued into August, levelling out by the end of August 2010. Given that rare earths account for only a minor portion of the cost but a crucial component in hi-tech applications price rises could potentially continue. The impact of the tightening supply issues is evident in the price table below.

		2004¹	2007¹	2008¹	2009¹	AUGUST 31 2010
Cerium oxide 99%	US$/kg	1.57	2.50	4.35	4.50	36.00
Lanthanum oxide 99%	US$/kg	1.60	3.10	7.75	6.25	37.00
Praseodymium oxide 99%	US$/kg	7.44	28.00	27.00	14.00	55.75
Neodymium oxide 99%	US$/kg	5.64	29.00	27.00	14.00	56.75
Dysprosium oxide 99%	US$/kg	31.00	85.00	110.00	100.00	288.00
Europium oxide 99%	US$/kg	292.00	300.00	475.00	450.00	585.00
Terbium oxide 99%	US$/kg	341.00	555.00	650.00	350.00	595.00
Average Nolans RE value	US$/kg	4.31	13.32	11.43	11.17	45.10

Source:
1 Metal Pages

Note: Prices are for a nominal 99% REO product. Prices have been rounded.

Commentary & Evaluation of the Nolans rare earths content, August 31 2010