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Iluka takes FID on Eneabba, with govt backing

4th April 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Rare earths producer Iluka has taken a final investment decision on the Eneabba rare earths refinery, in Western Australia, with the Commonwealth government providing over A$1-billion towards the project construction.

At a cost of between A$1-billion and A$1.2-billion, the refinery will have a 17 500 t/y total rare earth oxide capacity, and will employ about 300 people during construction and around 270 during its operations.

Construction is slated to start in the second half of this year, and first production is expected in 2025.

Eneabba is the highest grade rare earths operation globally and currently consists of Iluka’s stockpile of the rare earth bearing minerals monazite and xenotime, as well as the company’s Phase 1 screening and Phase 2 concentrating plant.

Phase 3 will build on this existing operation to deliver a significant downstream infrastructure asset comprising roasting, leaching, purification, solvent extraction and product finishing. The refinery will be fed initially from the Eneabba stockpile.

Iluka told shareholders that potential future sources of feedstock include Iluka’s Wimmera and other deposits and a range of third parties.

The Phase 3 operation will be funded jointly by Iluka and the federal government, with Iluka contributing A$200-million in equity, a A$1.2-billion equity-like contribution of the Eneabba stockpile, as well as A$50-million deployed for the Phase 1 and Phase 2 plant and A$20-million deployed for the Phase 3 feasibility study.

The federal government will contribute A$1.05-billion through a non-recourse loan under the Critical Minerals Facility, along with a A$200-million cost overrun facility, if required.

“Phase 3 is not an opportunity without risk for Iluka. The partnership we have agreed with the Australian government mitigates risk in a way that recognises the substantial contributions of both parties,” Iluka MD and CEO Tom O’Leary told shareholders on Monday.

“It also provides a strong platform for Eneabba’s success as a sustainable, secure and globally competitive source of separated rare earth oxides. This is consistent with Iluka’s disciplined approach to capital allocation and the development pathway we have been pursuing for some time, based on the alignment of commercial and policy objectives.

“Our final investment decision would not have been taken without the support of the Australian government. Eneabba Phase 3 reflects the Commonwealth’s commitment to the development of a downstream critical minerals industry and I extend the Iluka board’s thanks to Ministers and agencies with whom we have been engaging over a number of years who have recognised the opportunity that this refinery represents,” O’Leary said.

The Chamber of Minerals and Energy for Western Australia (CME) has welcomed the rare earths investment, with CEO Paul Everingham saying Western Australia had the opportunity to become a major supplier of the critical minerals that are needed in smartphones, electric vehicles, solar panels, wind turbines and vital components in military technology.

“With the shift to cleaner energy sources, there is growing global demand for minerals used in the technologies that help save energy and assist in the production of lower emission and renewable energy,” Everingham said.

“The drive to reduce the world’s dependence upon fossil fuels and decrease carbon emissions, coupled with the growing demand for technology that is faster, smaller and more efficient, is expected to foster significant growth in the rare earths market in the coming decade.

“In light of the projected strong growth in demand for products utilising rare earths and the focus from the US, the EU and other key markets on sourcing reliable supplies of these critical minerals, Western Australia is in the box seat to continue to emerge as a global supplier of choice.”


 

Edited by Creamer Media Reporter

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