How WA rare earths refineries can provide an ecosystem for Aussie juniors

• Iluka Resources is on track to open its $1.8bn Canberra-supported Eneabba rare earths refinery in late 2027
• One of three midstream refineries operating or planned in WA, it says discussions are ongoing with third parties to secure additional feedstock
• WA juniors could navigate a path into the critical minerals supply chain through offtake deals

It’s been a slog, but Iluka Resources (ASX:ILU) is inching towards the completion of Australia’s first whole hog rare earths refinery, opening a development window for Australian rare earths juniors.

The mineral sands major began planning the Eneabba refinery several years ago to take advantage of rising rare earths prices.

Iluka is leveraging its inventory of monazite, a rare-earths bearing mineral found in mineral sands deposits which was for years stockpiled as waste.

The project hit the skids a couple of years ago when it transpired that a $1.25bn loan from the Australian government wouldn’t be enough to fund construction, which blew out from $1.2bn to $1.7-1.8bn.

After receiving an additional $475m in support along with company commitments, the site is now 65% complete, with first production due in late 2027.

Initially, the plant will be commissioned on feedstock from the Eneabba stockpile, with Iluka also planning to use its Balranald and Wimmera developments on the east coast to feed the beast.

But it’s also disclosed a number of third-party deals. Iluka has offtake lined up for Lindian Resources’ (ASX:LIN) Kangankunde mine in Malawi, VHM’s (ASX:VHM) Goschen mineral sands project in Victoria and Northern Minerals’ (ASX:NTU) Browns Range, where the heavy rare earths proponent has been held up for years while the federal government has tried and failed to remove allegedly secretly connected Chinese shareholders.

But with a total rare earth oxide capacity of 23,000tpa, including 5500tpa of lights NdPr and 750tpa of heavies DyTb, the final plant will require much more than what has already been committed.

Iluka says it remains in discussions with other rare earths purveyors for future feedstock, and for good reason. Its own numbers show the project’s value nearly doubles with the processing of third party material.

Enneab-ler

That could make the project a potential enabler for other Aussie rare earths projects.

One Aussie mine and refinery has reached FID this year – Arafura Rare Earths’ (ASX:ARU) Nolans project in the NT. But it has sat in the pipeline for decades, with costs now close to $2bn only covered thanks to a complex network of Western governments, banks and offtakers.

Proponents who have found deposits in recent years will want a faster path to development.

Enter Eneabba and rare earths giant Lynas’ (ASX:LYC) midstream Kalgoorlie cracking and leaching plant, which could help them enter production cheaper and quicker.

Critica’s (ASX:CRI) Jupiter deposit could be among the best placed to service that supply chain, sitting adjacent to a major road and gas pipeline which connect Jupiter and its broader Brothers rare earths project 270km to Geraldton.

From there, both a railway line and the Brand Highway run just one degree of latitude south to Eneabba. Alternatively, Jupiter is just 475km from Lynas’ Kalgoorlie plant.

Jupiter has a mineral resource of 1.7Bt at 1700ppm total rare earths oxide, including all four key magnet rare earths neodymium, praseodymium, terbium and dysprosium.

Using just 6% of that resource, a scoping study showed the project would produce 8300tpa of contained TREO in a mixed rare earth carbonate over 14 years.

The early numbers suggest it would take A$555m to fund. Rather than going all the way to oxide, selling concentrate to a refinery or offtaker will spare the enormous capex carried by fully integrated operations.

“We can’t really disclose who we’re talking to at the moment, but hypothetically speaking, if you think about where we are located, Jupiter is about 250 kilometres from Eneabba,” Critica CEO Jacob Deysel said.

“We’ve shown that we can produce a mixture of carbonates, we can produce a mixture of oxide at commercial quality.

“Logistically, it’s within this processing hub really, between Eneabba and Lynas.”

Where Deysel thinks Critica’s product will be attractive for offtakers is its low proportion of uranium and thorium, radioactive elements common to monazite-hosted rare earths which need to be neutralised and stored as waste.

It has also been a persistent headache for Lynas, which has faced scrutiny from Malaysian authorities and environmental groups at its Kuantan refinery.

High degree of interest

With China dominating supply of rare earths, including near total control of the heavy rare earths needed for high-performance magnets in defence tech, aviation and more, Deysel said offtake interest in Jupiter’s MREC had been strong.

“We’re were talking to Europe, we’re talking to South Korea, we’re talking to the US,” he said.

“It’s unique to be in Western Australia and have a process facility that potentially can be an offtaker.

“That makes a lot more economic sense, I think, not just for us, but also for the offtaker given that the supply is so close.”

While they are competing with countries where labour and power are cheaper, like Brazil and southern Africa, Australian assets offer both scale and a predictable regulatory framework. When you own your asset you know it will be yours for as long as you hold up your end of the bargain.

“One of the key benefits and what offtakers usually look for is long-term, stable supply,” Deysel said.

“And if you think about a project like Jupiter, it’s just an absolutely enormous resource that you have there, it’s got long-term supply and sustainable supply.”

Iluka and Lynas could be joined by another heavy-hitter, creaking the door open further for junior miners.

US major Tronox is studying a proposal to establish a cracking plant JV with Japan’s JX Advanced Metals Corporation 3km south of its titanium dioxide pigment plant in Rockingham.

It could produce 10,000tpa of TREO in conjunction with a similar facility in Hamilton, Mississippi.

It comes as Chinese export restrictions choke the supply in the West.

The Middle Kingdom has collapsed monthly exports of dysprosium oxide to 4t, a third of levels seen before controls were introduced in early 2025.

Iluka says at nameplate Eneabba could account for half of the ex-China supply of dysprosium and terbium.

Advanced players

Critica is not the only large resource holder in the vicinity of the two major WA plants.

Victory Metals (ASX:VTM) owns the North Stanmore heavy rare earth project, one of 19 rare earth assets to be included on Austrade’s Australian Critical Minerals Prospectus.

It is one of six WA projects identified by Canberra, which include all three refineries.

Sitting on a granted mining lease near the Mid West town of Cue, North Stanmore is also barely a stone’s throw in logistics terms from the Port of Geraldton.

A pre-feasibility study showed the project could produce 29,000tpa of heavy rare earth enriched concentrate per annum over 20 years of mining and processing.

It’s particularly well endowed when it comes to heavy rare earths. Within the 47Mt ore reserve 248ppm of the 692ppm concentration is heavies.

That’s a ratio of around 36%, rare for deposits in the West.

The company said in a pre-feasibility study that just A$155 million could fund its initial process and infrastructure capital.

That delivers a post-tax NPV8 of $1.21bn and internal rate of return of 240%.

VTM may not need Australian infrastructure to get up and running. It says it has two pathways for processing in the US, with the US Export-Import Bank offering a letter of interest for US$190m in project funding, up to 35% of which could support Australian operations.

Further afield, RareX (ASX:REE) has submitted a bid as part of a consortium with Iluka for the Mrima Hill project in Kenya.

The consortium was originally selected to advance to the RFP stage in July this year by the Kenyan government. It submitted a comprehensive proposal on October 21.

“The proposal brings together the best of Australian critical mineral resource development and processing capability – drawing on experts and individuals from the successful Kwale Mineral Sands operation, led by Base Resources (formerly ASX:BSE) and integrating with the processing capability of Iluka Resources’ Eneabba Rare Earth refinery, funded in partnership with the Australian government,” REE managing director and CEO James Durrant said at the time.

“Eneabba will be commissioned in 2027 and it is designed to receive rare earths feedstocks from both Iluka-owned and 3rd party sources.

“We hope that a successful bid will result in an opportunity to deepen the long-standing partnership between Australia and Kenya whilst contributing to the development of secure and diversified global critical minerals supply chains.”

RareX also owns the advanced Cummins Range rare earths and phosphate project in WA’s Kimberley.

At Stockhead, we tell it like it is. While Critica, Victory Metals and RareX are Stockhead advertisers, they did not sponsor this article.

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