Iluka Resources to process Lindian Resources' African rare earths through Eneabba refinery
ASX-listed Lindian Resources is set to supply Iluka with 6000 tonnes of monazite concentrate a year from its future Kangankunde mine in Malawi.
The 15-year offtake agreement will be linked to a price floor set by the Australian Government — a potential policy which was flagged by Federal Resources Minister Madeleine King on Monday.
The exact details of the potential price floor are yet to be floated.
The Trump Administration last month set a $US110 per kilogram minimum for rare earth elements neodymium and praseodymium in its offtake deal with MP Materials.
Iluka will process the monazite concentrate through its Eneabba refinery, which has so far received $1.65 billion in taxpayer funding and can process up 65,000 tonnes of feedstock a year once built.
Eneabba is set to be constructed and commissioned in 2027, while Kangankunde is scheduled to be operational next year. Iluka is loaning Perth-based Lindian $US20 million ($31m) to help fund Kangankunde's build.
Iluka has its own stockpiles to feed Eneabba, as well as offtake lined up with Northern Minerals for the coveted 'heavy' subset of rare earth elements from its Brownes Range project near Halls Creek.
'Against a backdrop of heightened emphasis on diversifying the supply of rare earths globally, this is an example of Iluka catalysing a new mine into production as its Australian refining customer,' Iluka managing director Tom O'Leary said.
'Construction of the refinery is progressing well, with concrete works advancing and equipment now arriving on site.
'In parallel, we are in active discussions with several potential feedstock suppliers.
'The Kangankunde deposit has the potential to support a large, low-cost and simple mining operation. I am delighted that our discussions have culminated in a binding agreement, including the potential to further expand feedstock supply in the future.'
Lindian executive chairman Rob Martin said the Iluka deal was a defining moment for his company and established it as a long-term and significant participant in the global rare earths supply chain.
Shares in Lindian surged more than 35 per cent in early trade on Wednesday.
Meanwhile, shares in Arafura Rare Earths sunk 5 per cent, with its investors seemingly hoping Iluka's latest offtake deal would have been for feedstock from the Nolans project in the Northern Territory.
Lindian, which has a market capitalisation of about $160m, has faced security issues at its Malawian project.
In April, two Chinese nationals were charged with criminal trespass after being detained at Kangankunde.
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