Strategic Rare Earths Supply
Iluka Secures Landmark Deals and Financing for Western Australia Rare Earths Refinery
Key Points
Civmec was awarded the construction contract for Eneabba's major works, covering structural, mechanical, piping, electrical and instrumentation components.
Export Finance Australia confirmed access to the final A$400 million tranche of the A$1.65 billion government loan for Eneabba, helping de-risk the financing package.
Eneabba is described as one of the few non-Chinese rare-earth projects capable of producing both light and heavy magnet oxides, including dysprosium and terbium.
The offtake pricing framework sets the higher of a minimum floor price or market-linked price, with potential revenue around US$172 million over the four-year term (versus a US$155 million minimum), depending on industry prices.
Iluka Resources has signed its first binding deal to sell rare earth materials to a global automaker, locking in at least US$155 million in guaranteed revenue from 2028. The four-year agreement covers 1,200 tonnes of magnet rare earth oxides and marks a major commercial breakthrough for the company's A$1.8 billion Eneabba refinery in Western Australia, according to Rare Earth Exchanges.
The announcement came alongside confirmation that Export Finance Australia has unlocked the final A$400 million tranche of Australia's A$1.65 billion government loan for the project. CEO Tom O'Leary called the automaker deal "a particularly important milestone," saying Iluka has been "entrusted to deliver refined critical minerals" as part of a major manufacturer's supply chain.
A$1.65 Billion Loan Now Fully Unlocked for Eneabba
Australia's government first backed the Eneabba refinery with a A$1.25 billion loan in 2022. That figure grew to A$1.65 billion in late 2024, alongside a A$150 million cost-overrun facility. The condition for unlocking the final A$400 million tranche was simple: Iluka had to sign a binding offtake deal. It has now done exactly that, according to Money of Mine.
The refinery is now more than 50% complete and on track for commissioning in mid-2027. Iluka aims to reach 75% construction progress by the end of 2026. Construction firm Civmec was awarded the major structural, mechanical, piping, electrical and instrumentation contract in early June 2026, lifting its order book to a record A$1.5 billion, Australian Financial Review reported.
US$220 Million Deal Covers Both Light and Heavy Rare Earths
The offtake agreement totals roughly US$220 million when market-linked pricing is factored in, versus a guaranteed floor of US$155 million, according to Australian Financial Review. Analysts estimate the deal could generate around US$172 million at forecast prices. The contract covers both "light" oxides like neodymium and praseodymium, and "heavy" oxides like dysprosium and terbium — elements critical for the permanent magnets used in electric vehicle motors.
Eneabba is designed to produce 17,500 tonnes of total rare earth oxides per year, including 6,250 tonnes of separated magnet oxides. The automaker's 1,200-tonne purchase covers roughly 10% of planned production over the four-year term, TipRanks noted. The automaker's name remains confidential but has been described as a "globally recognised" company in a "like-minded nation."
Eneabba Aims to Break China's Grip on Rare Earth Refining
China controls roughly 90% of global rare earth refining. Eneabba is one of the few facilities outside China capable of producing both light and heavy magnet oxides. That makes it strategically valuable to Western automakers and tech companies trying to reduce their dependence on Chinese supply chains, according to Rare Earth Exchanges.
The refinery is also designed to accept third-party feedstock from other Western miners. That positions Iluka as a potential regional processing hub. Its feedstock advantage is real: Iluka holds a massive stockpile of monazite-rich mineral sands built up at Eneabba since the early 1990s, providing enough feed through 2035 without needing a new mine.
Investors Rally as Funding and Revenue Risk Both Fall Away
Iluka shares rose about 3% after the announcement. Investors had worried about the project's A$1.8 billion price tag and net debt forecast to peak near A$1 billion in 2027. The confirmed government loan tranche removes what analysts had called the project's main "funding risk," according to Grafa.
The floor price structure also shields Iluka from rare earth price swings. By guaranteeing US$155 million regardless of market conditions, the deal reframes Eneabba from a cost story to a revenue story. Iluka says it is now in talks with other potential customers for the remaining 90% of planned production, with deliveries under the first deal set to begin in 2028.
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