Iluka Resources Limited (ASX:ILU) has entered into an agreement with Lindian Resources (ASX:LIN) for the long-term supply of rare earth concentrate, supporting the development of Iluka’s Eneabba rare earths refinery in Western Australia.
Lindian is currently advancing the Kangankunde project in Malawi and under the terms of the agreement, they will supply Iluka with 6ktpa of rare earth concentrate over a 15-year period. This materials will provide complementary feedstock for Iluka’s Eneabba refinery and will account for approximately 10% of the refinery’s capacity.
Pricing for the concentrate will be linked to Iluka’s realised sales prices for separated neodymium (Nd), praseodymium (Pr), and didymium (NdPr) oxide products from Eneabba. This pricing mechanism aligns with Iluka’s strategy to move away from indices such as the Asian Metals Index, strengthening the security and sustainability of its rare earths supply chain.
Iluka has also established a US$20M loan facility agreement to help support Lindian’s development of the Kangankunde mine. The agreement comes with a five year term at an interest rate of SOFR+11% pa, with interest capitalized for two years during construction. The facility will become available subject to Iluka completing due diligence, the project achieving full funding, and other construction funding being utilized.
Tom O’Leary, Managing Director and Chief Executive Officer of Iluka commented, “Our agreement with Lindian is a further step towards delivering on the significant industry building opportunities presented by Iluka’s development of the Eneabba rare earths refinery. Against a backdrop of heightened emphasis on diversifying the supply of rare earths globally, this is an example of Iluka catalysing a new mine into production as its Australian refining customer. This is part of our focus on securing complementary Australian and international feedstocks for Eneabba, both from within Iluka’s own portfolio and from third party suppliers like Lindian. Construction of the refinery is progressing well, with concrete works advancing and equipment now arriving on site. In parallel, we are in active discussions with several potential feedstock suppliers. The Kangankunde deposit has the potential to support a large, low-cost and simple mining operation. I am delighted that our discussions have culminated in a binding agreement, including the potential to further expand feedstock supply in the future. Iluka looks forward to Lindian bringing Kangankunde into production and the positive contribution our cooperation will make to a sustainable rare earths industry.”
