Iluka Resources secures rare earth development funding
Sydney (23 June)
Iluka Resources has secured access to a A$400 million loan from Export Finance Australia (EFA) – a state-owned lender – which will allow the company to fund the construction of its Eneabba Rare Earth refinery.
The company will also fully draw down another A$1.25 billion loan facility from EFA at the end of 2026 to support construction work at Eneabba, which is set to open in mid-2027, it told investors on 23 June.
The Australian Government approved the A$1.25 billion and A$400 million loans to Iluka – at a 3% premium to floating rates – in March 2022 and December 2024, respectively. But Iluka had to pre-sell rare earth oxides from Eneabba to access the second loan.
Iluka met its loan offtake conditions in late June, when it agreed to sell 10% of Eneabba’s output over 2028-2032 to a carmaker based in a ‘like-minded nation.’ The deal will generate at least $155 million (A$223 million) of revenue, from 1200t of oxide sales, because it includes price floor provisions, Iluka told investors.
Iluka has agreed to invest A$414 million in Eneabba and use its one-million-tonne stockpile of rare-earth-rich mineral sands to support the refinery in exchange for the two Australian Government loans.
Iluka will manufacture both light and heavy rare earth oxides at Eneabba. Australian manufacturer Lynas – which runs a rare earth oxide plant in Malaysia – is currently the only commercial-scale producer of heavy rare earth oxides outside China.
Australia has zero operational rare earth oxide plants. But Lynas uses rare earth feedstock from its Mt Weld mine in Western Australia to produce a suite of oxides at its Malaysian refinery.
Two producers, Arafura Rare Earths and Australian Strategic Materials (ASM), also plan to develop joint rare-earth mines and refineries with Government funding support.
Arafura’s board approved its Nolans project in late May, but ASM has not secured full funding for its Dubbo project. Arafura aims to start construction work on Nolans in September 2026, the company said on 21 May.
By Avinash Govind