Iluka Resources has signed an 18-year rare earth concentrate supply agreement with VHM Limited, securing long-term feedstock from the Goschen project in western Victoria for its Eneabba rare earths refinery in Western Australia.
Under the agreement, VHM will supply Iluka with 146,000 tonnes (t) of rare earth concentrate, containing 86,000t of rare earth oxides, across the 18-year term.
On an annualised basis, this equates to approximately 8320 tonnes per annum of rare earth concentrate containing about 4900 tonnes per annum of total rare earth oxides, which will be used as complementary feedstock for Eneabba.
VHM is currently developing the Goschen project, while Iluka’s Eneabba refinery is now more than 50 per cent complete and on track for commissioning in mid-2027.
Once operational, Eneabba will become Australia’s first fully integrated rare earths refinery and produce separated light and heavy rare earth oxides.
Iluka managing director Tom O’Leary said the agreement marked another step in the company’s rare earths strategy.
“Iluka’s agreement with VHM marks another step in the development of our rare earths business and Australia’s rare earths industry,” O’Leary said.
“It follows recent milestones including Iluka’s inaugural offtake agreement for rare earth oxides produced at the Eneabba refinery and the award of the final contract to complete the refinery’s construction.”
The agreement also gives Iluka a right of first refusal over any additional rare earths produced from Goschen, as well as from VHM’s earlier-stage Cannie and Nowie projects.
Iluka said overall refinery production levels will depend on the optimal blend of internal and external feedstocks and circuit capacity constraints.
“Eneabba is a strategic infrastructure asset that is bringing new mines into production, with Iluka as its Australian refining customer,” O’Leary said.
“In VHM, we have secured a feedstock partner in western Victoria, a province notable for large deposits and an attractive assemblage of heavy rare earths.
“This is a region Iluka knows well through the company’s historic operations and our Wimmera development, which is in the latter stages of a definitive feasibility study.”
To support VHM’s development of Goschen, Iluka intends to provide a $40 million secured convertible note across two tranches.
This includes an initial $10 million tranche and a further $30 million after a final investment decision as part of the project’s construction funding package.
The concentrate pricing mechanism will be linked to the price Iluka realises from the sale of rare earth products from Eneabba.
O’Leary said VHM had environmental approvals in place for Goschen and had received letters of funding interest from both the Australian and US governments.
“Our agreement reflects Iluka’s focus on securing suitable, advanced third-party feedstocks for Eneabba, in addition to progressing those in our own portfolio in parallel,” he said.
“This reinforces the longevity and flexibility of the rare earths business we are building.
“Iluka looks forward to VHM bringing Goschen into production.”
Read more: Major rare earths deal puts Iluka in the driver’s seat
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