Rare earths miner Arafura Resources has found more than $400 million in savings by reducing planned capital expenditure at a Northern Territory project.

The company, which is a quarter owned by a Chinese state owned mining investment group, is planning a phosphate-uranium mine north of Alice Springs.

In April 2013, Arafura announced it would build a processing plant at the Nolans project site instead of at Whyalla in South Australia – a move that is expected to save on transport costs.

In August 2012, Arafura estimated that the capital expenditure cost would be $1.912 billion.

But on Friday, the company told the market that in December last year, planned business investment costs had fallen to $1.504 billion.

The $408 million saving follows the scrapping of a dedicated chlor-alkali plant, which now won’t be needed following Arafura’s decision to have a rare earth separation plant at the NT site instead of in South Australia.

The East China Mineral Exploration and Development Bureau, known as ECE, owns 24.86 per cent of Arafura.

Arafura shares gained 0.4 of a cent, or 4.2 per cent, to 9.9 cents.