Iluka Locks In Rare Earths Supply Through 18-Year VHM Agreement
Synopsis
The deal will supply Iluka with 146,000 tonnes of rare earths concentrate over the life of the agreement, strengthening feedstock security for its downstream processing operations.
Key Highlights
- VHM entered an 18-year supply agreement with Iluka Resources for rare earths.
- VHM will supply 146,000 tonnes of rare earth concentrate from the Goschen project.
- Iluka has agreed to a $40 million secured convertible note facility to VHM.
- The Eneabba refinery is over 50% constructed and projected to commence refining in mid-2027.
Iluka Resources has entered into a binding long-term agreement with critical minerals developer VHM to purchase all of the planned rare earths concentrate production from the Goschen project for an initial 18-year term.
The agreement included the supply of a total of 146,000 tonnes of rare earths concentrate from VHM in total featuring 86,000 tonnes of total rare earths oxides. This is similar to around 4,900 tonnes per annum of rare earth oxides and would be used as supplementary feedstock for its Eneabba refinery, Iluka said.
Supply Agreement Supports Eneabba Refinery
The Eneabba refinery is now more than 50% complete, but is commissioning in mid-2027 on track.
Iluka will pay VHM a $40 million secured convertible note facility to fund the transaction, with proceeds structured in two tranches as part of an agreement. The facility consists of a $10 million tranche, followed by a $30 million tranche on completion of VHM’s final investment decision.
The company added that VHM has environmental approvals in place for the Goschen project and that it also received letters of interest from both the Australian and US governments regarding funding, said Tom Leary, managing director of Iluka.
The management reflects Iluka’s emphasis on securing advanced third-party feedstocks for Eneabba, along with progression of those existing in the portfolio, he added.
Source: Capital Brief
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