Iluka Resources (ASX:ILU) to go ahead with Eneabba refinery

• Mineral sands company Iluka Resources (ILU) makes a final financial investment decision to proceed with construction of its Eneabba rare earths refinery located at Eneabba in Western Australia
• The “phase three” project will have a capital cost of about $1 billion to $1.2 billion and a total rare earth oxide capacity of 17,500 tonnes per annum
• The go-ahead come after finalised a risk sharing arrangement with the Federal Government involving a non-recourse loan under the government’s $2 billion critical minerals facility
• The company says the refinery will deliver a significant downstream infrastructure asset
• ILU shares last traded at $11.52 per share

Iluka Resources (ILU) has announced board approval to go ahead with its Eneabba rare earths refinery located at Eneabba in Western Australia.

The final financial investment decision (FID) commits the company to the construction of a refinery that will be designed to produce separated rare earth oxides.

The “phase three” development comes with a capital cost of about $1 billion to $1.2 billion and will have a total rare earth oxide capacity of about 17,500 tonnes per annum.

Construction will commence in H2 2022, with first production slated for 2025.

Eneabba, the world’s highest-grade rare earths operation, currently includes Iluka’s stockpile of the rare earth-bearing minerals monazite and xenotime, as well as the company’s phase one screening and phase two concentration plant.

Iluka says the new refinery will deliver a significant downstream infrastructure asset comprising roasting, leaching, purification, solvent extraction and product finishing.

Its board made the FID after the project feasibility study was completed and a risk sharing arrangement with the Federal Government involving a non-recourse loan under the government’s $2 billion critical minerals facility was finalised.

“Eneabba phase three represents a defining opportunity for Iluka and an order of magnitude evolution for value addition to Australia’s rare earth resources,” Managing Director Tom O’Leary said.

“For several years, Iluka has been progressing its diversification into rare earths based on the company’s assets at Eneabba in WA and Wimmera in Western Victoria.

“Since 2019 we have adapted, accelerated and amplified these plans in the context of key external developments, notably the continued transition towards the electrification of the global economy and the increasing policy priority assigned to critical minerals and their supply chains by the Australian Government.”

Before the market opens for the week, ILU shares last traded at $11.52 per share.