Iluka Resources has signed its first rare earths offtake agreement, securing a binding multi-year supply contract with a global automotive manufacturer for magnet rare earth oxides from its Eneabba refinery in Western Australia.
The take-or-pay agreement covers the supply of neodymium, praseodymium, dysprosium and terbium and will commence in 2028, with an initial term of four years.
First Rare Earths Customer Secured
The contract represents approximately 10% of Iluka’s planned rare earth oxide production during the supply period, equivalent to around 1,200 tonnes of magnet rare earth oxides.
The identity of the automotive customer has not been disclosed, with both parties keeping commercial details confidential.
Under the agreement, pricing will be based on the higher of negotiated minimum prices or prevailing market-linked rates, providing a combination of revenue certainty and exposure to market conditions.
Iluka estimates the contract will generate minimum revenue of approximately US$155 million over the four-year term, with potential revenue rising to around US$172 million based on current industry pricing forecasts.
Eneabba Refinery Moves Toward Commissioning
The offtake agreement aligns with the development schedule of Iluka’s Eneabba rare earths refinery, which the company said is now more than 50% complete.
The refinery remains on track for commissioning in 2027 and is expected to become a significant producer of separated rare earth oxides outside China.
The facility will process both light and heavy rare earth elements used in permanent magnets for electric vehicles, renewable energy technologies and advanced manufacturing applications.
Supporting Diversified Critical Minerals Supply Chains
Iluka said the agreement marks an important milestone in the development of its rare earths business and highlights increasing demand for alternative sources of critical minerals.
“Iluka’s offtake agreement marks a particularly important milestone in the development of our rare earths business,” said Managing Director Tom O’Leary.
“Our first rare earths customer is a globally recognised automotive company and I am delighted that Iluka has been entrusted to deliver refined critical minerals as part of its supply chain. We look forward to a collaborative and successful partnership.”
O’Leary said the agreement covers both light and heavy magnet rare earth oxides and includes minimum pricing arrangements negotiated on a commercial basis.
“One year out from commissioning, Iluka’s rare earth oxides have been procured by an end-use customer in a like-minded nation.”
“This demonstrates increasing recognition of Iluka’s position as a credible, vertically integrated supplier, with diverse feedstock sources spanning internal operations and third-parties. Discussions with other prospective customers are ongoing.”
Government Loan Access Confirmed
Separately, Iluka announced that Export Finance Australia has confirmed the company’s access to the full A$1.65 billion non-recourse loan provided by the Australian Government to support construction of the Eneabba refinery.
The company also confirmed that engineering and construction contractor Civmec has been awarded the contract for structural, mechanical, piping, electrical and instrumentation works required to complete the project.
The Eneabba refinery is expected to strengthen Australia’s downstream rare earth processing capabilities and support the development of diversified global supply chains for critical minerals used in clean energy and advanced technology sectors.
Source: MiningMagz
