Australian heavy rare earths producer Northern Minerals (NTU) has entered into a number of agreements with Iluka Resources to provide an initial 30.5 kilotonnnes supply of total rare earth oxide (TREO) in concentrate from its Browns Range project in Western Australia.
The partnership, covering the initial eight-year mine life, requires NTU to supply and sell, and Iluka to purchase and take, an agreed minimum quantity of product up to 100 per cent of the forecasted production annually.
Executing these agreements will allow NTU to complete the definitive feasibility study as a precursor to taking a final investment decision for a mine and commercial-scale beneficiation plant at Browns Range.
Iluka has agreed to subscribe for $5 million in new equity and a $15m convertible note, which will be issued on or about October 28. Iluka has also agreed to subscribe for further equity of up to $53m subject to a number of conditions, including NTU achieving certain specified milestones, completion of due diligence and NTU shareholder approval.
The Browns Range project is fully-owned by NTU, and has a mineral resource of 10.81 million tonnes averaging 0.76 per cent TREO.
NTU executive chairman Nick Curtis said the agreement was a major step towards achieving the goal of developing Browns Range into a significant alternative producer of dysprosium and terbium, which “are critical metals in a low carbon future increasingly reliant on rare earth permanent magnetic electric motors”.
Iluka managing director Tom O’Leary said the move delivered on the significant, industry building opportunities presented by the development of Australia’s first fully integrated rare earths refinery at Eneabba.
In its latest quarterly report, the company said that work on the Eneabba refinery in WA continued during the period, following an investment decision in April.
At a cost of between $1b-$1.2b, the facility will have a 17,500 tonnes per year total rare earth oxide capacity, and will employ 300 people during construction and around 270 during its operations.
All primary environmental approvals have now been received, allowing for construction to start, and first production is expected in 2025.
