Iluka Resources to develop Australia’s first integrated rare earths refinery in WA

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Iluka Resources has been granted a $1.25 billion loan through the Critical Minerals Facility to develop Australia’s first integrated rare earths refinery in Western Australia.

The Eneabba Refinery Project will manufacture separated rare earth oxide products (Praseodymium, Dysprosium, Neodymium, and Terbium), which are utilized in permanent magnets in a variety of applications, including electric vehicles, renewable energy generation, and defense.

“Australia has the best resource industry in the world and we have an unrivalled competitive-edge when it comes to being a reliable, sustainable provider of critical minerals and rare earths,” Prime Minister Scott Morrison said in a media release.

“Our support for this project will capitalise on our advantages, helping to strengthen Australia’s critical minerals supply chain while also creating huge job and economic opportunities for Australians for generations to come.

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“Australia’s critical minerals are in demand because they are the key input for everything from mobile phones to fighter jets, not to mention the technologies of the future that haven’t even been realised yet.”

In an ASX announcement, the company revealed it had completed the feasibility study and the agreement of a risk-sharing arrangement with the Australian Government, allowing it to progress with Phase 3 of the project and the integrated refinery.

“For several years, Iluka has been progressing its diversification into rare earths based on the company’s assets at Eneabba in Western Australia and Wimmera in Western Victoria,” said Managing Director Luke Woodgate.

“Since 2019 we have adapted, accelerated and amplified these plans in the context of key external developments, notably the continued transition towards the electrification of the global economy and the increasing policy priority assigned to critical minerals and their supply chains by the Australian Government.”

According to Mr Woodgate, Phase 3 is not an opportunity without risk for the company.

“The partnership we have agreed with the Australian Government mitigates risk in a way that recognises the substantial contributions of both parties. It also provides a strong platform for Eneabba’s success as a sustainable, secure and globally competitive source of separated rare earth oxides,” he said.

“This is consistent with Iluka’s disciplined approach to capital allocation and the development pathway we have been pursuing for some time, based on the alignment of commercial and policy objectives.”

The Eneabba Refinery Project, according to Treasurer Josh Frydenberg, will help secure Australia’s manufacturing capability by opening up a new generation of high-wage, high-skill, and high-tech jobs.

“Building a modern manufacturing sector and securing our sovereign capability is a key part of our plans for a stronger economy and a stronger future for Australia,” the Treasurer said.

“Australia’s critical minerals sector and the job-creating industries that rely on it are being supercharged under the Morrison Government’s $2.5 billion Modern Manufacturing Strategy.”

According to Minister for Resources and Water Keith Pitt, aside from increasing Australia’s sovereign critical minerals processing capacity, the facility could supply up to 9% of the global rare earth oxide market once fully operational.

“It will initially use the Eneabba Stockpile – one of the highest-grade sources of rare earth elements in the world,” Minister Pitt said.

“The refinery is also designed to process concentrate from many other deposits across Australia, making it a natural hub and reducing the capital required to bring other projects online.”

Image credit: https://iluka.com/operations-resource-development/resource-development/eneabba