Rare earths producer Arafura Resources Ltd (ASX: ARU) announced on Friday that it has forged a deal with OneSteel Ltd to acquire land in Whyalla on South Australia's Eyre Peninsula where the company will house its new processing plant .

The company said that it has been granted immediate access so it can commence engineering and environmental assessments on the site though it clarified that full-blown development of the location would greatly depend on the completion a viable feasibility report and sourcing of funding for the rare earths processing facility.

Arafura Resources chief executive Steve Ward said that the proposed Whyalla plant would host the company's processing of rare earth oxides, phosphoric acid, uranium oxide and gypsum produced from the Nolans project in the Northern Territory.

Dr Ward said that the establishment of the processing plant would re-characterised the way that Nolans yields were delivered as the value adding initiative would upgrade the project's mineral resources before they enter the market.

He also stressed that Whyalla would eventually become the country's gateway to international rare earths markets, adding that once completed, "the complex will be a substantial mineral processing and chemical manufacturing facility by Australian standards."

South Australian Mineral Resources Minister Paul Holloway is upbeat on the economic prospects of the processing project, stating that the initiative is poised to create an estimated 1000 jobs during the construction stage, after which 300 workers would be employed to man the Whyalla plant.

More so, Mr Holloway said that the state government is optimistic that the Whyalla project "will also act as a major catalyst for attracting support industries into the upper Spencer Gulf."

Industrial use of rare earths have been growing as the elements were increasingly required in large-scale productions of lasers, computers, fibre-optic cables and mobile phones as efforts in developing green technologies such as wind turbines and rechargeable motor vehicle batteries also rely on rare earth materials.

As of 1101 AEST on Friday, Arafura Resources shares were trading at $1.035, soaring by 4.5 cents or 4.55 percent, which analysts said was the highest attained by the stocks since the end of September last year.