Rare earths miner Arafura Resources has pulled out of a deal to buy land from steel maker Arrium as it looks to save $400 million by moving to the Northern Territory instead.

Arafura was going to build its rare earths processing complex on the 800 hectare piece of land in Whyalla, South Australia, that it agreed to buy from a subsidiary of Arrium in July 2011.

But it is now planning to build the complex near its Nolans mine site north of Alice Springs to save up to $400 million in capital expenditure.

The complex’s relocation is among changes aimed at saving the business between $500 million and $1 billion in costs.