Iluka Resources Secures Rare Earths Deals Amid Geopolitical Supply Chain Tensions

As its name would suggest, the Diggers and Dealers Mining Forum brings together opposing sides of Australia's resources sector, those at the coalface carrying a shovel and financial backers with a briefcase.

As industry heavyweights descend on Kalgoorlie-Boulder for the 35th edition of the famous conference, bars and boardrooms in the historic gold mining city will be filled for three days as many a deal gets done.

But one company that will not be spotted on the sidelines is the taxpayer-backed Iluka Resources, which is building a $1.8 billion rare earths refinery in WA's Midwest.

As Iluka's head of rare earths, Dan McGrath, explained, the company shakes hands on deals in private, out of necessity.

"We've got a lot of discussions ongoing with a lot of parties, but all of those discussions are confidential because right now those supply chains rely on rare earths from China," he said.

"Discussions may result in the risk of China cutting off the supply between now and when our rare earths are available next year, so we keep those discussions very confidential."

First deal of many

In June, the Perth-headquartered Iluka signed its first offtake deal with an unnamed global car maker to supply magnet rare earth oxides from 2028.

The $US155 million ($220 million) deal is set to underpin the first four years of operations at Iluka's Eneabba refinery, which is about 60 per cent built near the small farming community about 280 kilometres north of Perth.

Once commissioned, the plant will churn out products like neodymium, praseodymium, terbium and dysprosium, which are critical in the manufacture of high-tech magnets found in electric vehicles, wind turbines and weaponry.

Critical mineral supply chains, but particularly rare earths, have become a focal point for many Western governments in recent years.

In the case of the Eneabba refinery, the project is backed by a $1.65 billion loan from the federal government's Critical Minerals Facility.

Mr McGrath said Australia's relationship with the United States was a critical component moving forward.

"The world needs more rare earths and those manufacturing supply chains are currently captive to the whim of the Chinese government, which has had a tendency over the years to weaponise the rare earths supply chain," he said.

"Australia and other like-minded and economically liberal nations realise that their own domestic, sovereign manufacturing capacity needs a source of rare earths that's outside of China.

"We're not just talking to the US, we're talking to European, Japanese and other countries all over the globe."

Trade being 'weaponised'

The growing geopolitical tensions were reflected in July when the federal government signed an agreement to supply more uranium to India.

India's High Commissioner to Australia, Canberra-based Nagesh Singh, said ongoing cooperation among nations would be vital in lifting living standards in his country.

During a brief stopover in Kalgoorlie-Boulder on Thursday, Mr Singh toured the $800 million Kalgoorlie refinery owned by the Gina Rinehart-backed Lynas Rare Earths.

"I am not naming any countries but trade, resources are being weaponised … so like-minded countries who share common geopolitical objectives are coming together the world over," he said.

"You'll see more and more cooperation happening. It's going to be a very critical area for future growth, not just for India and Australia, but the rest of the world.

"These specific minerals should be democratised, everyone should have access without the threat of denial."