Under the agreement, the Papua New Guinea government paid Nautilus $7 million, which entitles it to a 15% stake in the project, with an option to increase it by another 15% in the next 12 months.
The mine has an initial annual production capacity of 35 million tonnes and is a key part of BHP's plans to lift capacity from its Pilbara operations to 220 million tonnes a year.
At the moment about 90% of the world’s rare earths —used in a variety of industries including green technology, defence systems and consumer electronics— come from China.
While the WA government is favours Chinese capitals, Australian junior Padbury Mining says it has secured $6.5 billion to take over the project, but refuses to reveal backer's name.