The South Australia Government is glad to have Arafura Resources Limited (ASX: ARU) operations in the state's third most populous city.

Whyalla, a seaport on the east coast of South Australia, has been deemed suitable suitable for Arafura Resources' rare earths processing plant. The company has selected the site because of its road, rail, and port facilities, skilled workers, and sea water for a desalination plant.

In statement released to the public, the Perth-based company announced the signing of the Exclusivity Deed with OneSteel Manufacturing Pty Limited, a subsidiary of OneSteel Limited (OneSteel). The deal covers the purchase of approximately 800 hectares of land next to OneSteel's Whyalla steelworks.

“The Deed allows Arafura immediate access to the site to progress detailed engineering and environmental studies, while the parties finalise the sale and purchase agreement. Both parties are working to conclude the transaction by end 2010.”

The planned processing complex would create more than 1,000 jobs during a two-year construction phase. Approximately 300 permanent jobs are expected at the processing site.

However, the finished product from the plant will have to be shipped out of Port Adelaide because Arafura has come up with a deal to use OneSteel's Whyalla facility.

Rare earths are used in mp3 players, computer and television screens, fibre-optic cables, mobile phones, lasers, low-energy light globes, rechargeable car batteries, and wind turbines.