Commission, fivebob,Interesting discussion. I disagree with your...

Commission, fivebob,

Interesting discussion. I disagree with your dour conclusions.

TO'L & team have always known about the value of the monazite and reserved the material, while lacking the means to monetise it. They studied the issue from every conceivable direction, including plant design. Eneabba held all the ingredients - monazite, electricity, gas, water, engineering skills, land, most permits and tailings void.

NdPr is essential for quality permanent magnets. Windfarms, electric vehicles, military, etc require the performance - and have the means to pay for it.

When Western governments discovered the vulnerability from China's key role in critical minerals processing, ILU shared information about its resource and outline of plant. The Australian Government and US Geological Survey drooled over the strategic significance.

Then comes the fun bit.

In 2021, ILU sold 57.7 kt of monazite to China. Testing the market.

The government agencies had hissy fits - flogging unprocessed monazite to China did not match their agenda.

Could they incentivise ILU to build the plant?

Looking at the agreed deal where almost all the funding is from government, it is clear ILU said NO NO NO NO NO to lesser offers.

The rationale runs something like, a concentrator will earn a manufacturing margin, while the big $$ "commission'" mentions above accrues to the monazite owner.

ILU did not want to spend $1.5b ++ on a plant that would not meet their hurdle rate of return, while government really, really wanted the asset brought into existence.

Hence the giant non-recourse loan. Principal repayments will roughly match plant depreciation.

The REE concentrator falls to ILU almost for free. It get to diversify its business into the electrical revolution while turning tailings into cash.

Great work.

Ash