Hancock Prospecting Executive Chairman Gina Rinehart gestures during the Lest We Forget sunset tribute on the eve of ANZAC Day at Sydney Opera House in Sydney, Australia, April 24, 2025. REUTERS/Hollie Adams

(Reuters) -Australia's richest person Gina Rinehart has doubled down on her holdings in Australia's Arafura Rare Earths, even as shares of the developer fell by more than a fifth of its value on Wednesday due to a discounted share placement.

Rinehart's Hancock Prospecting has raised its stake in Arafura to nearly 15.7% with a commitment of around A$125 million ($81.22 million).

It previously held a 7.19% stake in Arafura, according to data compiled by LSEG.

Arafura said it will raise around A$475 million via a two-tranche placement at an offer price of A$0.28 per share.

The placement price represents a more than 25% discount to its last close on Tuesday, sending shares 22.7% down to A$0.29 in its weakest trading session since June 2021.

The stock touched its lowest level since October 10.

In addition to the placement, the company is also undertaking a share purchase plan to raise about A$50 million at the same share price.

($1 = 1.5389 Australian dollars)

(Reporting by Sneha Kumar in Bengaluru; Editing by Alan Barona)