Australia grants further $258 million in funding for Iluka's rare earths refinery (updated)

Iluka Resources

05/12/2024 22:00

(Adds background of refinery in paragraphs 2-4, funding details in paragraphs 5-8)
       Dec 6 (Reuters) - The Australian government will grant A$400 million ($257.96 million)
in funding for Iluka Resources'  ILU.AX  Eneabba rare earths refinery in the state of Western
Australia, in addition to its previous A$1.25 billion loan, the miner said on Friday.
    The mineral sands producer's Eneabba refinery in Western Australia is expected to cost
between A$1.7 billion and A$1.8 billion, with production of light and heavy rare earths crucial
for a range of tech applications — from electric vehicles to missiles — due to begin at the end
of 2026.
    Iluka had first committed to building what will be Australia's first fully integrated rare
earths refinery in 2022, with the company contributing A$200 million along with the government's
loan.
    The refinery forms part of a push by the United States and allies such as Australia, to
develop new sources of critical minerals, including rare earths, to diversify the supply chain
away from top producer China.
    The new funding is subject to the company securing offtake deals for the refinery, and can
only be used after the original A$1.45 billion funding is fully drawn, Iluka said.
    "Iluka continues to engage actively with potential offtake counterparties and is focused on
securing commercially-attractive supply agreements for ... the Eneabba refinery," the mineral
sands producer said.
    Iluka will also contribute a further A$214 million in equity to the refinery, it added.
    

($1 = 1.5506 Australian dollars)

 (Reporting by Aaditya Govind Rao in Bengaluru; Editing by Alan Barona)
 ((Aaditya.GovindRao@thomsonreuters.com))