Australia supports plans to build new rare earth smelters

Iluka Resources is expected to complete a feasibility study of its plant in Eneabba, Western Australia, in early 2022, whose concentrate contains important elements and plans to build a new rare earth processing plant in Australia. This is part of a move by Western countries to end China's monopoly on this key raw material.

Ore producer (Iluka Resources) says its proposal to build a fully integrated rare earth refinery in Eneabba, a small town 280km north of Perth, Western Australia, has the support of the government.

Tom O'Leary, managing director of ILuca, said: "the Eneabba refinery is an exciting opportunity for the company and is in line with our long-standing plan to diversify into rare earths." "this is not a risk-free opportunity."

The threat of supply disruptions from China has prompted countries such as Australia and the US to improve their capabilities in recent years.

"the more important issue is access to raw materials," said Yoshihiro Azuma, an equity analyst at Jeffery (Jefferies). "the rare earth magnet industry is still heavily dependent on China."

Shares in Iluka, which is listed on the Australian Stock Exchange, remained unchanged at A $8.16 on Thursday.

Feasibility study

ILuca is expected to complete the feasibility study of the plant in early 2022. Currently, Iluka produces concentrates containing rare earths from radioactive mono antimony ores.

"the Morrison government is focused on developing Australia's key mining sector, gaining more value from our resources and diversifying global supply chains by moving downstream," Trade Minister Dan Tehan and Resources Minister Keith Pitt said in a joint letter to the Australian Stock Exchange in support of Iluka.

"this includes support for Australian projects that are of broader benefit to the industry as a whole," the letter said. "

"ILuca is in talks with (Export Finance Australia), the Australian export finance company, on financial support for the project, including seeking non-recourse loan arrangements," ministers said.

Founded in 1998 as a result of the merger of the titanium businesses of Westralian Sands and Renison Goldfields Consolidated, ILuca is the world's largest producer of rutile and synthetic rutile derived from zircon and titanium dioxide.

The company is dwarfed by Lynas (Lynas Rare Earths), the world's largest producer of rare earths outside China. Lynas is also building a plant in (Kalgoorlie), Calgary, Western Australia.

Against the export ban

Before Australia launched the plan, the US and Canada had planned to set up a rare earth supply chain to reduce their dependence on China.

Neo Performance Materials of Canada, Energy Fuels and Chemours of the United States have found an effective way to safely produce rare earths from solitary stone sand.

China is the world's largest producer of rare earth metals and magnets, which are widely used in electronic systems, weapons, electric vehicles and other advanced technologies. These rare earths are crucial to the manufacture of Lockheed Martin's (Lockheed Martin) Fmur35 "Lightning II" (Lightning II) fighters and other cutting-edge weapons.

A report from the Congressional Research Service found that the Fmur35 plane contained 417 kilograms of rare earth material and a nuclear submarine contained more than 4 tons of rare earth material.