KEY POINTS
- Iluka signs offtake deal for rare earths.
- The deal for rare earths includes a boost in project funding.
- Phase 2 expansion could double supply volumes.
ASX-listed Iluka Resources has inked a binding long-term supply agreement with fellow Australian company Lindian Resources, marking a strategic move to secure feedstock for its upcoming Eneabba rare earths refinery in Western Australia.
Under the 15-year offtake deal, Lindian will supply 6,000 tonnes of rare earth concentrate annually—90,000 tonnes in total—from its flagship Kangankunde project in Malawi. The agreement also includes a $20-million project loan, further deepening Iluka’s role in advancing the critical minerals supply chain.
Iluka signs offtake deal for rare earths
The concentrate will be a complementary feedstock for Eneabba, which is set to become Australia’s first fully integrated refinery for both light and heavy rare earth oxides when it begins operations in 2027. Iluka’s managing director, Tom O’Leary, described the deal as a catalyst for bringing new supply into production.
“This reflects our strategy to source both internal and third-party feedstock to support Eneabba,” said O’Leary. He added that construction at the site is advancing, with equipment arriving and concrete work well underway.
Rare earths deal includes project funding boost
To support Kangankunde’s development, Iluka is offering Lindian a $20-million loan facility over five years. The loan carries an interest rate pegged to the secured overnight financing rate plus 11 percent per year, with the first two years interest-free during the construction phase.
However, the deal includes built-in protection against commodity price risks, offering floor price mechanisms above operating expenses. Lindian notes it has also secured international legal counsel and technical experts to support due diligence and project execution.
Phase 2 expansion could double supply volumes
Lindian is evaluating a Phase 2 expansion, which could raise concentrate output well beyond the 15,300 tonnes per year targeted in Phase 1. Under a right-of-first-refusal clause, Iluka may fund at least 50 percent of expansion costs in exchange for up to 25,000 tonnes more per year over 15 years.
“This partnership provides confidence and clarity as we transition Kangankunde from development to production,” said Lindian executive chairperson Robert Martin, calling the deal a milestone in the company’s growth strategy.
