en.Wedoany.com Reported - Australia's Iluka Resources has secured its first rare earth offtake agreement, signing a binding multi-year supply contract with a globally renowned automotive manufacturer. The "take-or-pay" agreement covers the supply of neodymium, praseodymium, dysprosium, and terbium for a four-year period starting in 2028, accounting for approximately 10% of Iluka's planned production during that period, equivalent to about 1,200 tonnes of rare earth magnet oxide.

Iluka Resources Managing Director Tom O'Leary stated that this offtake agreement is a key milestone in the company's rare earth business development. He noted that the first customer is a globally renowned automaker, and Iluka has been selected to enter its supply chain to provide refined critical minerals, expressing anticipation for a successful partnership.

The agreement aligns with the commissioning schedule of Iluka's Eneabba Rare Earth Refinery in Western Australia. The refinery is currently over halfway through construction and is expected to enter the commissioning phase in 2027. The pricing mechanism adopts the higher of an agreed minimum price for each product and a market-linked price, aiming to balance price volatility risks while ensuring supply security for the customer.

Iluka expects minimum revenue of $155 million over the contract period, which could reach approximately $172 million based on industry forecast prices. The customer's identity and detailed pricing terms were not disclosed. O'Leary noted that the transaction covers both light and heavy rare earth magnet oxides and includes a negotiated minimum price independent of government support arrangements, making it particularly significant.

"With a year to go before commissioning, our products have already been purchased by an end-user from a partner country," O'Leary said. He believes this reflects market recognition of Iluka as a trusted, vertically integrated supplier, with raw material sources covering its own operations and third-party channels. O'Leary revealed that discussions with other potential customers are ongoing.

Alongside the offtake agreement announcement, Iluka announced that it has received confirmation from the Australian Export Finance Agency (EFA) that it can access a $1.65 billion non-recourse loan provided by the government, specifically for the construction of the Eneabba Refinery. Civmec has been awarded the remaining construction contract for the refinery, covering structural, mechanical, piping, electrical, and instrumentation works.

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