Analysis and Commentary

Iluka Resources orders equipment for Australia’s first rare earths refinery

Analysis and Commentary

By Peter Roberts

Mining company Iluka Resources has awarded long lead procurement packages for key equipment for the company’s planned rare earths refinery at its Eneabba zircon mine in Western Australia – the first refinery for rare earths in Australia for the minerals used in high technology products.

The company is procuring the roasting kiln, solvent exchange agitators, ion exchange system, spiral heat exchangers and boilers for the project which is supported by a $1.25 billion non-recourse loan through the federal government’s $2 billion Critical Minerals Facility.

Bulk earth works and ground improvement activities for the refinery, which has an estimated capital cost of $1.7 billion to $1.8 billion, were completed in 2023.

Iluka told investors: “Negotiations are underway on tenders for other major engineered packages and detailed earthworks.

“Significant tender preparation, delivery and review activity is underway on the balance of the procurement and contract packages.”

Iluka has strategically stockpiled monazite produced at its Narngulu Mineral Separation Plant at Eneabba since 1990, and has commissioned a concentrator plant to further process the stockpiled material.

This will separate the monazite (and additional zircon), producing a ~90% monazite concentrate material that will provide a direct feed to the new refinery which from 2026 produce the rare earth oxides neodymium, praseodymium, dysprosium and terbium.

Until now rare earth ores produced in Australia have been exported for treatment, including by the largest rare earths producer outside China, Lynas Rare Earths, which produces metals at its Malaysian plant.

The new refinery will capture more of the economic value of the minerals onshore, and enable the development of downstream industries. The Eneabba refinery will be big enough to treat ores from other Australian producers.

Rare earths are critical to smart phone screens, computers, and flat panel televisions, permanent magnets in the motors of computer drives as well as batteries.

Government support for Eneabba has been criticised by some because of the involvement of controversial Western Australian mining magnate Gina Rinehart who holds strong political views in Iluka Resources.

Apart from the fact that no government funding decision should be based on such assessments, the project is of strategic importance to Australia and the free world, with the funding a prime example of how government support can enable industry development.

Iluka Resources could never have afforded to risk close to $2 billion on an Australian first minerals processing project.

As it is Ilulka needs to secure additional funding arrangements to make the project work financially – perhaps this is something being considered by the National Reconstruction fund and the federal government’s Future Made in Australia..

If so it would be a worthy recipient of government co-investment – it would likely make a fine return given the scramble globally to secure supplies of rare earths not dependent on China.

Further reading:
Iluka Resources plans Australia’s first rare earths refinery
Produce rare earth metals, don’t just export ore – Iluka Resources MD

Picture: Iluka Resources/Eneabba refinery

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