Today, both governments and ILU must feel like they have stood a landmine and any move will blow them up.
For Western governments, bringing China-competing REE production into existence is necessary and within reach. They plan to then withdraw and allow private industry to continue. Easy.
This is from August gives the context, yet the technical challenges talked about remain as difficult as ever.
https://www.reuters.com/markets/commodities/world-battles-loosen-chinas-grip-vital-rare-earths-clean-energy-transition-2023-08-02/ILU's refinery will make separated mineral oxides, not production-ready metals. That's the next stage and reliant on innovative metallurgy still being tested.
ILU needs a strong government partnership to help fund a project of unknown cost and dimension. Now the refinery budget is +20-30% due to inflation and WA labour shortages - probably design changes too.
ILU doesn't have a lazy $300m and must be nervous about simply enlarging its loan from $1.25b to $1.6b. It is already 'all in' on a risky project that only gets it halfway to a salable product.
Negotiations will be difficult, prolonged and opaque as Western security agencies chime in from dark corners and the Chinese Communist party plays games to defend its monopoly - just look at NTU.
TO'L & team know not to agree to a deal that heaps extra risk and obligation on ILU. Governments are terrified of negative media reporting if private enterprise makes a buck at their expense.
I sold out of ILU this morning. While the REE refinery will be built, there is grave uncertainty and price volatility immediately ahead.
I won't share my incendiary price prediction. Let's just wait and see.
Ash
