Iluka Resources Secure $750 Million on Rare Earth Refinery Backed by Australia

Iluka Resources will build Australia's first rare earth refinery after receiving A$1 billion ($749 million) in debt from the government, which wants to shift critical mineral supplies away from China.

The mineral sands producer's Eneabba refinery in Western Australia (WA) is expected to cost between A$1 billion and A$1.2 billion and will begin producing light and heavy rare earths critical to a range of technology applications, from electric vehicles to missiles, in 2025.

The new plant is key to a push by the U.S. and allies, including Australia and Japan, to develop new sources of a range of key minerals, including rare earths, to counter China's dominance of those supply chains.

"Without the support of the Australian government, we would not have made the final investment decision," Iluka said in a statement. Australian Resources Minister Keith Pitt said the plant, at full capacity, could supply 9 percent of the global market for rare earth oxides.

“We have the best resource industry in the world and we have an unrivaled competitive edge when it comes to being a reliable, sustainable provider of critical minerals and rare earths, our support for this project will capitalize on our advantages, helping to strengthen critical minerals supply chain while also creating huge job and economic opportunities for generations to come.” the Prime Minister said.

Following the news, Iluka shares jumped 9% to a record A$12.50. Rare earth projects around the world have faced many cost and financial setbacks over the past decade. To ensure the project went ahead, Iluka treated the refinery as a separate entity and negotiated a risk-sharing agreement with the government to cover cost surges.

Iluka Resources contributed A$200 million to cover construction costs, a screening plant, a concentration plant, and deposits of the rare earth minerals monazite and xenotime that it owns in Eneabba. Future material for the refinery may come from other deposits owned by Iluka and other companies.

The plant will have the capacity to produce 5,500 tons of rare earth oxides neodymium and praseodymium (NdPr) and 750,000 tons of dysprosium and terbium (Dy+Tb) per year.

In another rare earth project, Lynas Corp is building a rare earth refinery processing plant in WA that will produce carbonate rare earths to feed its separation facility being built in the United States.

Headquartered in Perth, Western Australia, Iluka Resources is an international mineral sands company focused on exploration, development, mining, processing, marketing, and rehabilitation. The company's portfolio includes mining and value-added processing operations in Australia and Sierra Leone.

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