Miner Iluka joins the EV load with a $1.2 billion rare earth refinery
Mineral sands miner Iluka will spend $1.2 billion to produce rare earth minerals essential for electric vehicles and wind turbines after a $1.05 billion loan from a federal fund designed to help wean the West of a dependence on China for critical minerals.
The construction will require around 300 workers and the operation of the plant will require 270 people who will travel in and out of Perth to a camp in Eneabba township.
Share prices for Iluka and rare earth producer Lynas have both hit all-time highs as growing demand from the energy transition and strategic concerns amplified by the Russian invasion of Ukraine push investors to target the sector.
On Monday, Iluka announced it would build a rare earth oxide refinery at its Eneabba operation north of Perth, backed by the federal government’s $2 billion Critical Minerals Facility set up in September 2021.
The investment will move Iluka up the value chain, from ore concentration to the more complex business of separating the rare earth oxides that are the input to metal production.
Iluka chief executive Tom O’Leary said the company had spent several years exploring how to diversify into rare earths from its existing mineral sands mining sites at Eneabba and Wimmera in Victoria.
The refinery will first process a stock of processing by-products that Iluka has stored at Eneabba since the 1990s to extract minerals containing neodymium and praseodymium (NdPr) which are used in permanent magnets for electric motors and generators. It could also accept raw materials from other Iluka operations or from third parties.
US rare-earth producer MP Materials told investors last week that each electric vehicle needs two to three kilograms of NdPr and that wind turbines use about 150 kilograms for every megawatt of capacity.
MP, who before Iluka’s announcement described himself and Australian Lynas as the only NdPr sources outside China guaranteed to be online, warned that miners with no experience in land separation few might find the technology difficult to master.