Lindian Resources (ASX:LIN) and Iluka Resources (ASX:ILU) have executed a binding loan term sheet and full-form offtake agreement, establishing a strategic partnership for the supply of rare earth concentrate.
As part of the term sheet, Iluka, which has a market capitalisation of $2.48 billion, will provide US$20 million ($30.86 million) as a construction term loan facility, over a five-year tenor. The funds will principally fund capital costs associated with Lindian’s Kangankunde Project.
The loan will be made available subject to Iluka completing due diligence, Kangankunde being fully funded, and other construction funding has been spent.
Under the offtake agreement, Lindian will supply Iluka with 6,000 tonnes per year of rare earth concentrate for 15 years. This material would be complementary feedstock for Iluka’s Eneabba rare earths refinery and would represent 10% of its capacity.
Eneabba will become Australia’s first fully integrated rare earths refinery and will produce separated light and heavy rare earth oxides. The refinery, currently under construction, is scheduled for commissioning in 2027.
Iluka Managing Director Tom O’Leary says this deal is an example of Iluka catalysing a new mine into production as its Australian refining customer.
“This is part of our focus on securing complementary Australian and international feedstocks for Eneabba, both from within Iluka’s own portfolio and from third-party suppliers like Lindian,” O’Leary says.
“The Kangankunde deposit has the potential to support a large, low-cost and simple mining operation.”
Lindian, which has a market capitalisation of $111.24 million, says this partnership is a defining milestone for the company as it provides a credible pathway forward for developing Kangankunde.
Lindian Executive Chairman Robert Martin says these agreements provide a multi-decade source of feed for Iluka’s refinery.
“The funding and offtake agreements represent a major de-risking milestone for stage one of our Kangankunde Rare Earths Project,” Martin says.
“The larger stage two production expansion has also been significantly de-risked, with Iluka having right of first refusal for up to an extra 25,000 tonnes per annum of product if it makes an offer to fund 50% of the capital cost.”
Iluka Resources is a critical minerals-focused company that produces zircon and titanium. The company is also set to become a supplier of refined rare earth oxides.
Lindian Resources is a rare earths and bauxite-focused company that plans to produce a premium saleable monazite concentrate at 55% total rare earth oxide grade over an initial 45-year mine life.
Write to Aaliyah Rogan at Mining.com.au
Images: Lindian & Iluka Resources
