Monsters of Rock: Australia’s first rare earths refinery a stepping stone for local critical minerals sector
The owner of what will be Australia’s first rare earths refinery says the $1.2 billion plant will be a stepping stone for the development of a local industry in WA.
Canberra has given a low cost taxpayer loan worth over $1 billion to support the development of Iluka Resources (ASX:ILU) Eneabba refinery.
Initially fed by nine years of stockpiles of monazite concentrate from the Mid-West based Eneabba mine — monazite being the highest grade source of rare earths neodymium, praseodymium, terbium and dysprosium globally — the refinery will be ramped up to take concentrate from Iluka’s stranded Wimmera deposit in Victoria and third party feed from other local producers.
Construction will start in late 2022 with first production due in 2025.
Both Iluka and the Federal Government are hoping to tap into an expanding market for “critical minerals” that will play a role in the shift from fossil fuels to green electricity.
NdPr, dysprosium and terbium are used in permanent magnets, a key component of wind turbines and electric vehicles.
EVs and wind turbines to require a combined 36,000t of the stuff each year by the end of the decade.
Iluka boss Tom O’Leary told analysts on a conference call today the ability to process third party concentrates was a key factor in its support from Government.
“It’s also been a key part of what has attracted government to enter into this risk sharing arrangement because we’re not merely building this facility for our own resources, it’s really to enable the development of the rare earths industry in Australia,” he said.
“I’m confident that over time, we will enter into arrangements with third parties around concentrate supply.
“The beauty again of the Eneabba stockpile is that it provides us a really attractive runway to time for such arrangements and of course for Wimmera to come online.”
While concentrate from Eneabba will only take up 24,600t of plant capacity a year, the plant will be designed with a capacity to take 55,000tpa of rare earths concentrate with a total rare earths oxide production rate of 23,000tpa and NdPr production of 5500tpa.
O’Leary says Iluka wants the plant to be “meaningful globally”.
An election is coming up so PM Scott Morrison is front and centre.
He was on hand to comment on the FID from Iluka, backed by the loan as part the Government’s $2 billion critical minerals strategy as well as $200 million in equity from Iluka’s coffers.
The supply chain for processed rare earths is almost entirely located in China, with Australia’s largest rare earths producers, Lynas, planning to complete midstream processing at a new cracking and leaching plant in Kalgoorlie but maintaining its separation plant in Malaysia close to the Asian market.
The announcement comes after executives of several critical minerals companies joined Trade Minister Dan Tehan for a roundtable in the United States last week to discuss funding and partnerships between the nations over future facing minerals like rare earths.
“Australia has the best resource industry in the world and we have an unrivalled competitive-edge when it comes to being a reliable, sustainable provider of critical minerals and rare earths,” Morrison said.
“Our support for this project will capitalise on our advantages, helping to strengthen Australia’s critical minerals supply chain while also creating huge job and economic opportunities for Australians for generations to come.
“Australia’s critical minerals are in demand because they are the key input for everything from mobile phones to fighter jets, not to mention the technologies of the future that haven’t even been realised yet.”
Stocks trading in lithium, rare earths and other future metals were big winners on the bourse today.
Sayona Mining (ASX:SYA) was the most eye-catching, the lithium explorer up 32% or 8c to 33c after a month of seemingly unending gains after announcing positive test work by Novonix (ASX:NVX) indicating it will be able to produce battery quality chemicals from its Authier project in Quebec.
Mineral Resources inked a deal with Western Mines Group (ASX:WMG) to the iron ore rights at its Pavarotti project adjacent to MinRes’ Koolyanobbing mine in the Yilgarn iron ore district.