Perth-based Arafura Resources Ltd (ASX: ARU) said on Monday that it has been informed by the South Australian government that the company's breakthrough rare earths processing complex would be given major project status.

The company said that the decision was relayed to them by South Australia's Minister for Urban Development and Planning Paul Holloway on Friday last week, almost immediately following Arafura Resources' announcement that it would purchase land from OneSteel Ltd at the Eyre Peninsula for the planned processing site for its Nolans yields.

Arafura said that it picked the near-800 hectares Whyalla site due to its natural port design, which it said was an exact fit for the requirements laid out for the proposed processing plant, plus the availability of existing road and rail networks, skilled workers and the location's proximity to sea water that the complex would be utilising for its desalination plant.

The company said that it has already inked a contract with OneSteel that would allow Arafura to immediately access the site and commence evaluation for the envisioned complex, where ores from the company's Nolans Bore mine would be processed once the facility becomes operational.

Arafura said that ores harvested from its Nolans site would be transported through Whyalla via the Darwin-to-Adelaide railway route as it added that actual production of the milestone rare earth oxides it revealed last week should begin by 2013.

In his statement made public on Monday, Arafura Resources chief executive Steve Ward declared that the company is now in a strong position "to move forward at pace with all our Nolans project work programs."

As of 1538 AEST on Monday, Arafura shares were trading at $1.01, settling a bit by 1.5 cents or 1.46 percent from the gains the stocks saw when the news broke about the company's discovery of isolating rare earth oxides.