Will ILU metallise its REE concentrate?

Today's AFR has much prose about Critical Minerals. Some of it is useful and I have cherry-picked:


The US plans to make Australia a ‘‘domestic source’’ under its Defence Production Act, to support the development of a local industrial base. Siriana Nair, the US Consul General in Perth, said Australia was ‘‘uniquely positioned to be a supplier of choice for US and global manufacturers’’.

‘‘These strengths can go beyond extracting minerals to position Australia further along the value chain to create more value domestically by processing the minerals essential to clean technology into the materials and components that are the building blocks of our clean energy future.’’

Iluka is building Australia’s first fully integrated refinery on the West Australian coast with the help of a $1.25 billion non-recourse loan from taxpayers, in what represents the government’s biggest single financial commitment to downstream critical minerals processing.

Mr O’Leary said it was unlikely the government would offer similar deals to other critical minerals players. ‘‘I think there’s going to be a limited ability for Australia to do much more like they’ve done with us,’’ he said.

Under the terms of the non-recourse loan, the government has security over the rare earths stockpile, which sits in tailings built up over decades of sand mining by Iluka in WA.

Iluka contends it could have pocketed more than $1 billion by selling the stockpile directly to China but chose to move downstream.

Mr O’Leary said the rare earths industry in Australia should aim to push downstream to making permanent magnets onshore.

‘‘The metallisation of rare earth oxides occurs entirely within China or in South-East Asia under Chinese control, and so getting some diversity in the supply chain around metallisation is an absolute must,’’ he said.

Amanda Lacaze, of rare earths miner Lynas, says onshore processing requires government support.

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Ash here.

So I rang ILU and asked about their position on metallisation.

The refinery will produce a range of separated REE concentrates. ILU is seriously examining processing the really valuable ones to metal - Nd Pr Dy and Tb.

Further downstream stages would require significantly less capex than the $1.45b refinery. Hooray to that!

The US and Oz governments are very very keen to create a non-China supply chain of permanent magnet elements for geopolitical reasons and recognise practical financial support is needed to incentivise production and reduce risk. ILU can reasonably expect their practical help. Whether this will be at the scale of support the refinery attracted is an open question.

Ash