en.Wedoany.com Reported - Australia's Iluka Resources has entered into an 18-year supply agreement with VHM, under which the latter will deliver rare earth concentrate to Iluka from the Goschen project in western Victoria, Australia.

Under the contract, VHM is required to supply 146,000 tonnes of concentrate, equivalent to 86,000 tonnes of rare earth oxides (REO). This translates to an average annual supply of approximately 8,320 tonnes of concentrate, corresponding to about 4,900 tonnes of rare earth oxides.

The concentrate will be directly supplied to Iluka's Eneabba rare earth refinery, which is currently more than halfway through construction and is scheduled to enter the commissioning phase in mid-2027. Iluka stated that the final output level of the refinery will depend on the blending ratio of internal and external feedstocks and operating conditions.

In addition to the long-term supply agreement, Iluka has also secured a right of first refusal on any additional rare earth materials produced from the Goschen project and VHM's early-stage projects, Cannie and Nowie. To support the development of the Goschen deposit, Iluka plans to provide VHM with secured convertible notes valued at A$40 million (approximately US$27.6 million). The funds will be disbursed in two tranches: an initial A$10 million, followed by an additional A$30 million after a final investment decision under the overall construction financing plan.

The pricing mechanism for the rare earth concentrate will be linked to the price of rare earth products sold by Iluka from the Eneabba refinery.

Iluka Managing Director Tom O’Leary stated that the agreement between Iluka and VHM marks another step forward for the company's rare earth business and the development of Australia's rare earth industry. He noted that this follows a series of milestones, including Iluka's first offtake agreement for rare earth oxides produced at the Eneabba refinery and the final contract awards for the refinery's construction.