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Highlights
- Iluka Resources Limited has secured the board approval for Eneabba rare earths refinery construction.
- Today, the shares of Iluka Resources were spotted trading 6.684% higher at AU$12.290 per share on ASX at 10.10 AM AEST.
- The company has said that the "phase three" development involves a capital cost of AU$1,000-1,200 million.
The shares of Iluka Resources Limited (ASX:ILU) traded in the green on Monday (4 April 2022) after the company revealed that the Iluka board has approved the financial investment decision (FID) of Eneabba rare earths refinery, Western Australia. The ASX-listed company engaged in the exploration and development of mineral sands has stated that key State and Federal government environmental approvals decisions for the project have been made, and Iluka is currently working towards securing further approvals and regulatory requirements.
Today, the shares of Iluka Resources was spotted trading 6.684% higher at AU$12.290 per share on ASX at 10.10 AM AEST. Iluka shares have gained 70.15% over the last one year, while the stock is up 18% year-to-date (YTD).
Eneabba is considered the highest-grade rare earths operation globally and includes Iluka's stockpile of the rare earth-bearing minerals monazite and xenotime, along with the company's phase 1 (screening) & phase 2 (concentrating) plant.
The company has said that 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 "phase three" development involves a capital cost of AU$1,000-1,200 million and will have a total rare earth oxide (TREO) capacity of approximately 17.5 thousand tonnes per annum, said the company.
Meanwhile, refinery construction is expected to commence in H2 2022, with the first production likely in 2025.
Image Source: © Fongleon356 | Megapixl.com
In its risk-sharing arrangement, the company informed that phase 3 would be owned and operated by an Iluka entirely owned Special Purpose Entity, "RefineryCo". Iluka and the Australian government will fund the construction and commissioning of Phase 3.
The risk-sharing arrangement's terms reflect the project's strong alignment with the Critical Minerals Strategy and its significance as Australia's first fully integrated rare earths refinery, said the company. The terms also include interest charged at BBSY + 3% and long-term facility tenor, up to 16 years.
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According to the company, Eneabba phase 3 represents a defining opportunity for Iluka and a significant evolution for value addition to Australia's rare earth resources.
Iluka has been advancing its diversification into rare earths at Eneabba in Western Australia and Wimmera in Western Victoria for several years.
The company has mentioned that this final investment decision (FID) would not have been taken sans the support of the Federal Government.
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How are the prices of mineral sand stocks performing?
It is believed that the ongoing supply crisis could trigger interest in ASX-listed companies that are involved in mineral sand production. The ongoing Russia-Ukraine war has fuelled already surging prices of mineral sands. With a market capitalisation of AU$4.88 billion, the company is one of the leading Australia-based zircon producers.
