In a visit to the Top End on Wednesday, Trade Minister Don Farrell and Resources Minister Madeleine King met with NT Chief Minister Eva Lawler and announced up to $840 million for the Nolans project, which is operated and managed by Australian exploration company Arafura Rare Earths.
"(This) will be the biggest rare earths mine in this country ... and probably the world," Ms King told reporters in Darwin on Thursday.
"We know the road to net-zero goes through Australia's rare earths and critical minerals and resources."
On Wednesday, the federal government announced a $230m loan commitment for emerging West Australian lithium producer Liontown Resources.
Prime Minister Anthony Albanese, who also hosted a cabinet meeting in Darwin this week, said the investment would help Australia become "a renewable energy superpower".
"This project is a major vote of confidence in the Northern Territory, which continues to punch above its weight in global trade," he said.
Ms Lawler said the mining and processing of critical minerals was a priority for the territory to create more local jobs.
Located 120km north of Alice Springs, the Gina Rinehart-backed Nolans project will create more than 200 jobs during construction and more than 125 ongoing jobs, including 20 per cent for the Indigenous community.
Australia has some of the world's largest deposits of critical minerals and rare earths which are in demand for the energy transition, defence and advanced communications.
The mine will produce the rare earths neodymium and praseodymium (or NdPr) which are used in electric vehicles, wind turbines and other green technology.
"Gaining this level of support from the Commonwealth government is a critical milestone in becoming a globally significant producer of NdPr," CEO Darryl Cuzzubbo said.
Ms King said it was key to growing the regional economy.
"Importantly Australia just needs to be using its minerals and processing them here for ourselves as a nation to be able to make more things but also for our international partners," she said.
(L-R) Don Farrell, Solomon MP Luke Gosling, Eva Lawler, NT Minister Mark Monaghan, Madeleine King. (Neve Brissenden/AAP PHOTOS)
The financing includes $495 million from the $4 billion critical minerals facility, $200 million from Northern Australia infrastructure funding, up to $115 million from Export Finance Australia and $30 million as a modern manufacturing grant.
The package is expected to unlock further private sector investment as trading partners seek to lock in reliable supplies.
Shares in Perth-headquartered Arafura emerged from a trading halt on the Australian stock exchange on Thursday to rise by more than 45 per cent to 21.5 cents per share.
The company wants to emulate the success of Australia's Lynas Rare Earths, which is the world's biggest rare earths miner outside China.
The federal government has been on a spending spree in the NT, and earlier this week announced a landmark $4 billion housing package and a $1 billion education investment.
