Iluka Resources’ Eneabba rare earths refinery in Western Australia is one step closer to coming online after the Federal Government bumped up a billion-dollar loan.
The refinery has been slapped with a $1.7–1.8 billion price tag, but is expected to more than deliver on returns once it enters production.
Declared a “globally significant” refinery, Eneabba aims to establish WA as a strategic hub for the downstream processing of rare earth resources.
Iluka’s one-million-tonne rare earths stockpile at Eneabba is supported by additional mineral sands deposits that could serve as feed source for the refinery, including the Wimmera project in Victoria, the Balranald project in New South Wales.
Recognising the project’s potential, the Federal Government first announced a $1.25 billion loan for Iluka in March 2022 under the Critical Minerals Facility administered by Export Finance Australia (EFA).
Now, the Australian Government has committed to delivering a further $400 million for the project, which will join a $214 million cash equity contributed by Iluka.
In addition, Iluka and the Government have agreed to establish a $150 million cost overrun facility, which would be contributed on a 50/50 basis.
The additional funding is subject to securing offtake agreements satisfactory to the Australian Government and delivering positive outcomes in line with the Community Benefits Principles under the Government’s Future Made in Australia agenda.
“We expect the Eneabba refinery to deliver substantial, sustainable value over several decades – that is why Iluka is investing significant shareholder funds in this opportunity,” Iluka managing director and chief executive officer Tom O’Leary said.
“This is a strategic infrastructure asset that puts Iluka and Australia at the forefront of global electrification, the creation of new and resilient critical minerals supply chains, and the establishment of a rare earths industry that is genuinely independent.
“With the capital structure for Eneabba now confirmed, we remain focused on efficient construction of the refinery, and on realising the operational performance, pricing outcomes and longevity that will collectively drive returns from our rare earths business.”
Eneabba is expected to enter production in 2026.
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