Iluka Resources has secured its first rare earths offtake agreement, marking a major commercial step for the company as it pushes its Eneabba rare earths refinery in Western Australia towards commissioning.
The binding multi-year take-or-pay agreement will see Iluka supply neodymium, praseodymium, dysprosium and terbium to a globally recognised automotive company from 2028.
Covering an initial four-year term, the agreement represents about 10 per cent of Iluka’s planned magnet rare earth oxide production during the period, equivalent to 1200 tonnes.
“Iluka’s offtake agreement marks a particularly important milestone in the development of our rare earths business,” Iluka Resources managing director Tom O’Leary said.
“Our first rare earths customer is a globally recognised automotive company and I am delighted that Iluka has been entrusted to deliver refined critical minerals as part of its supply chain. We look forward to a collaborative and successful partnership.”
The agreement comes as Iluka continues to reshape its business around rare earths, with the Eneabba refinery expected to become one of the few facilities outside China capable of producing both light and heavy separated rare earth oxides.
That distinction has grown in relevance as governments and manufacturers look to diversify critical mineral supply chains, particularly for magnet rare earth oxides used in electrification, high-performance permanent magnets and defence technologies.
Iluka’s March 2026 quarterly review showed the scale of the company’s investment in that shift, with total capital expenditure at Eneabba reaching $977 million by March 31.
The company said concrete installation at the refinery was nearing completion, while the installation of mechanical equipment, pipe rack modules, tanks and buildings had further progressed. Engineering was about 99 per cent complete at the end of the quarter.
That followed a September 2025 quarter in which site works at Eneabba accelerated, concrete placement rates continued to ramp up, piling activities were completed, and several non-process facilities, the high-voltage powerline and gas metering station were finished.
The offtake agreement aligns with Eneabba’s commissioning and ramp-up schedule, with the refinery now more than 50 per cent complete and still on track for commissioning in 2027.
Under the deal, pricing will be set at the higher of agreed minimum prices or market-linked rates for each product.
Iluka expects minimum revenue of $US155 million across the contract period, rising to an estimated $US172 million based on industry forecast pricing.
The customer’s identity and detailed pricing terms remain commercially confidential.
O’Leary said the agreement was particularly notable because it covers both light and heavy magnet rare earth oxides, while also including minimum pricing negotiated independently of government-backed arrangements.
“One year out from commissioning, Iluka’s rare earth oxides have been procured by an end-use customer in a like-minded nation,” he said.
“This demonstrates increasing recognition of Iluka’s position as a credible, vertically integrated supplier, with diverse feedstock sources spanning internal operations and third parties. Discussions with other prospective customers are ongoing.”
The commercial progress comes during a more measured production period for Iluka’s mineral sands business.
In its March quarterly review, Iluka said its 2026 production settings reflected the idling of the Cataby mine, with no heavy mineral concentrate production and no zircon or rutile output from the operation. Both synthetic rutile kilns were also idled, with their restart subject to market conditions.
Finished goods production in the first half of 2026 was therefore drawn from Jacinth-Ambrosia, while commissioning continued at Balranald in New South Wales.
Iluka recorded 70,000 tonnes of zircon, rutile and synthetic rutile sales in the March quarter, including 40,000 tonnes of zircon sand.
No synthetic rutile sales were recorded during the quarter, with shipments weighted to the second half of 2026 in line with take-or-pay delivery schedules.
At the same time, Iluka has strengthened the funding and construction pathway for Eneabba, with Export Finance Australia confirming the company’s access to the full $1.65 billion non-recourse loan provided by the Australian Government to support the refinery’s development.
Civmec has also been awarded the structural, mechanical, piping, electrical and instrumentation works contract to complete construction, further positioning Eneabba as the centrepiece of Iluka’s rare earths growth strategy.
