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RareX Ltd (ASX:REE) is teaming up with Iluka Resources Ltd (ASX:ILU) to facilitate the development of a globally significant rare earth project in Kenya, which includes niobium, phosphate, and manganese.
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The two companies have established a consortium to apply for the Mrima Hill project – located in the country’s south, less than 100 kilometres from Mombasa – with plans to form a special purpose vehicle to de-risk and develop it.
This consortium has made a formal submission to Kenya’s National Mining Corporation (NAMICO) to take on Mrima Hill; if this is successful, the proposal will go on to be presented to the cabinet secretary for Mining, Blue Economy and Maritime Affairs, to consider the formation of a joint venture with NAMICO.
Under the SPV, Iluka would hold 25% control. RareX would take the lead, progressing work in community engagement, environmental protection and technical derisking through studies and field work.
The company’s experience at Cummins Range – a similar style deposit – will come in handy for this, with lessons gleaned from this project in the WA Kimberley being useful for application at Mrima Hill.
At the same time, Iluka’s planned rare earths refinery at Eneabba in Western Australia also has the potential to play an important role in development of Mrima Hill, with the consortium agreement including a binding conditional offtake term sheet with Iluka for all of the project’s rare earth and heavy mineral product from Mrima Hill, with consideration that the rare earths could provide feed to Eneabba.
The refinery is currently under construction, with support from a non-recourse loan from the Australian federal government worth AU$1.65 billion. Its location close to the Indian Ocean, as is Mrima Hill, is also expected to be a boon for transport costs.
Also beneficial to the development will be the range of potential technical and financial partners who have indicated support as per the consortium submission.
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This includes Curtin University, which, through an MOU with RareX, plans to support the latter in transferring skills to Kenyans to provide immediate support to the project as well as preparing to operate it longer term.
REE has been trading at 4.1 cents, 13.89% higher since market open.
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