Iluka Resources' taxpayer-backed Eneabba rare earths refinery north of Perth will be partly fed by concentrate from Africa amid a growing push to secure non-China supply chains.
Iluka Resources' taxpayer-backed Eneabba rare earths refinery north of Perth will be partly fed by concentrate from Africa amid a growing push to secure non-China supply chains.
ASX-listed Lindian Resources is set to supply rare earth concentrate from its under-development project in Malawi to partly feed Iluka’s under-construction Eneabba refinery in WA.
The deal comes amid heightened interest in rare earths as some industry players the governments move to solidify rare earth supply chains outside of China’s stronghold after US-China trade tensions escalated.
In April, China slapped export restrictions on heavy rare earths terbium and dysprosium, drying up the flow of the material critical to the automotive, defence and renewable industries.
Under the deal, Lindian will ship 6,000 tonnes of rare earth concentrate per annum for 15 years, which would make up 10 per cent of Eneabba’s capacity once online.
Iluka boss Tom O’Leary said the deal was an example of Iluka “catalysing a new mine into production as its Australian refining customer”.
He said it came against a backdrop of growing emphasis on diversifying the supply of rare earths globally.
"This is part of our focus on securing complementary Australian and international feedstocks for Eneabba, both from within Iluka’s own portfolio and from third party suppliers like Lindian," Mr O'Leary told the market.
"Construction of the refinery is progressing well, with concrete works advancing and equipment now arriving on site. In parallel, we are inactive discussions with several potential feedstock suppliers."
Iluka also agreed to loan Lindian $US20 million ($AUD32 million) to support its development of its Kamgamkunde project, subject to due diligence and other factors.
Eneabba is set to produce separated light and heavy rare earth oxides once in production now tipped for 2027. It’s backed to the tune of $1.65 billion of government dollars, which was upped amid cost blowouts.
The refinery will be feed by Iluka's stockpile and third-parties, including Gina Rinehart-backed Arafura Rare Earth's Nolans project in the NT, but the Lindian deal would introduce international feed into the asset.
The Australian federal government is looking secure non-China supply chains and incentive a local rare earths industry through its critical minerals stockpile plan, announced in the wake of the White House's tariffs in April.
On Tuesday, Federal Resources Minister Madeleine King flew into Kalgoorlie where she revealed the government was open to taking an equity stake in a rare earths developer or set a price floor for the elements.
Both measures would follow the US Department of Defence making a landmark equity investment in the only American rare earths producer, MP Materials, and setting a price floor almost double current prices.
Tech giant Apple followed suit and also invested in MP Materials to solidify its supply.
The only other rare earths producer outside of China is Lynas Rare Earths, which refines its Mt Weld - 30 km south of Laverton - concentrate in Malaysia. Lynas and MP are also backed by Mrs Rinehart.
Lynas is planning to build a Texan refinery, backed by US government funds, but has faced several setbacks in the process. Rare earths developer Australian Strategic Metals is also eyeing an expansion into the US.
The interest in rare earths has translated into a healthy uptick in rare earth stocks this week. Shares in Lindian were surging more than 30 per cent to around 12.5 cents apiece.
The deal also puts Lindian’s rare earths project back in the spotlight after the company detained a group, including two Chinese nationals, for trespassing on its project earlier this year.
