Iluka Resources Limited is pleased to announce the signing of a binding, long-term rare earth concentrate supply agreement with Lindian Resources Limited, marking a significant milestone for both companies and advancing the strategic development of critical mineral supply chains.
Under the terms of the agreement, Lindian will supply Iluka with 6,000 tonnes per annum (6ktpa) of rare earth concentrate over a 15-year period. The concentrate will be sourced from the high-grade Kangankunde deposit in Malawi and will serve as a valuable feedstock for Iluka’s Eneabba rare earths refinery in Western Australia. Once operational, this supply will account for approximately 10% of Eneabba’s total feedstock capacity.
This agreement not only strengthens Iluka’s security of supply for its refining operations, but also supports the broader global goal of diversifying rare earths production outside of China, contributing to greater geopolitical and economic resilience in the sector.
Supporting a Sustainable Rare Earths Industry
The rare earth concentrate supplied by Lindian will be processed at Iluka’s Eneabba refinery, which is currently under construction and scheduled for commissioning in 2027. The Eneabba project represents Australia’s first fully integrated rare earths refinery and will produce both light and heavy separated rare earth oxides essential for a wide range of advanced technologies including electric vehicles, renewable energy systems, and defence applications.
Eneabba is being developed through a strategic partnership between Iluka and the Australian Government, reflecting the national importance of building an end-to-end rare earths supply capability within Australia.
Financial Support for Project Development in Malawi
To assist with the development of the Kangankunde project, Iluka has also entered into a US$20 million loan facility agreement with Lindian. The loan, with a five-year term and an interest rate of SOFR + 11% per annum (with interest capitalised for the first two years), will support construction activities and is contingent on several conditions, including the completion of due diligence by Iluka, full project financing, and expenditure of other capital already raised.
This financial support underscores Iluka’s role not only as a customer but also as a partner in facilitating the development of responsible, high-quality new sources of rare earths.
Significant Economic Potential for Malawi
The Kangankunde project is poised to have a transformative impact on the Malawian economy. As one of the largest and highest-grade undeveloped rare earth deposits in the world, Kangankunde offers a rare opportunity for Malawi to establish itself as a key player in the global rare earths supply chain.
Potential economic benefits include:
- Job Creation: The project is expected to generate hundreds of direct and indirect jobs during construction and operations, with opportunities across mining, logistics, infrastructure, and support services.
- Skills Development: The need for technical and operational expertise will promote skills development and workforce training, contributing to long-term human capital growth in Malawi.
- Foreign Investment and Export Revenue: The development will attract significant foreign direct investment (FDI), and once in production, rare earth exports will provide a substantial new source of foreign exchange earnings for Malawi.
- Infrastructure Development: Ancillary infrastructure such as roads, power supply, and community services will improve as a result of mining activities, with long-term benefits for local communities.
- Local Procurement and SME Growth: Lindian’s operations are likely to engage local suppliers, service providers, and small businesses, further stimulating economic activity in the region.
Importantly, Lindian has expressed its commitment to responsible and inclusive development, which includes engaging with local stakeholders, prioritising environmental sustainability, and ensuring that economic benefits are shared with host communities.
Managing Director Commentary
Iluka Managing Director, Tom O’Leary, said:
“This agreement with Lindian is another important step in delivering on the strategic vision behind the Eneabba refinery. As the global focus intensifies on diversifying rare earths supply chains, this partnership exemplifies Iluka’s ability to bring new mines into production in collaboration with emerging international producers.
“Kangankunde is a globally significant resource with the potential to support a simple, low-cost and long-life operation. We are pleased to provide commercial and financial support to enable its development and look forward to a productive long-term relationship with Lindian.
“This agreement also reinforces our strategy to secure diverse feedstocks for Eneabba from both Iluka’s portfolio and third-party sources. Construction is progressing well, and with equipment now arriving on site, we are on track to deliver a world-class facility. In parallel, we are actively engaging with other potential suppliers to support Eneabba’s future requirements.
“Iluka welcomes the opportunity to play a role in catalysing the responsible development of rare earth resources in Africa, while supporting economic growth in a country like Malawi that stands to benefit significantly from this emerging industry.”
About Lindian Resources and Kangankunde
Lindian Resources is an ASX-listed company with a strategic focus on rare earth and bauxite assets. The Kangankunde rare earth project in Malawi is recognised as one of the highest-grade and most commercially viable undeveloped monazite-hosted rare earths deposits globally. Lindian aims to produce a premium rare earth concentrate grading 55% Total Rare Earth Oxide (TREO), with an initial mine life estimated at over 45 years.
The project’s combination of grade, scale, and low expected capital intensity positions it to be a globally significant supplier of critical minerals for decades to come.
Supply and Pricing Terms
Under the terms of the agreement, Lindian will supply 6ktpa of concentrate to Iluka for 15 years. The feedstock is complementary to Iluka’s existing supply sources and will enhance the overall flexibility and reliability of Eneabba’s operations.
Pricing for the concentrate will be based on a mechanism linked to Iluka’s realised sales prices for separated neodymium (Nd), praseodymium (Pr), and didymium (NdPr) oxide products. This pricing model avoids reliance on volatile external indices such as the Asian Metals Index, aligning with Iluka’s broader strategy to develop more resilient and transparent pricing frameworks for rare earths.
