Iluka Resources has entered into a long-term supply agreement with VHM Limited to secure rare earth concentrate from VHM’s Goschen deposit in western Victoria. The 18-year contract commits VHM to deliver 146,000 tonnes of rare earth concentrate containing 86,000 tonnes of rare earth oxides, averaging 8,320 tonnes of concentrate and 4,900 tonnes of rare earth oxides annually. This material will serve as feedstock for Iluka’s Eneabba rare earths refinery, Australia’s first fully integrated rare earths facility, positioning VHM as a strategic partner in a supply chain Iluka is actively developing.
The feedstock security is significant given Eneabba’s centrality to Iluka’s rare earths strategy. The refinery is now more than 50 percent complete with commissioning scheduled for mid-2027, making reliable feedstock access critical to utilisation levels and production targets. By locking in external feedstock through the Goschen agreement, Iluka reduces the execution risk of relying solely on its own rare earths projects. The refinery’s throughput will depend on optimal blending of internal and external sources, and the Goschen supply provides a stable external foundation to complement Iluka’s Wimmera development, also located in Victoria.
To support VHM’s development of Goschen, Iluka is providing a $40 million secured convertible note in two tranches: $10 million immediately and $30 million following VHM’s final investment decision. The concentrate pricing mechanism is linked to the price Iluka realises from its rare earth products at Eneabba, aligning interests between supplier and buyer. Iluka has also secured a right of first refusal on additional rare earths from VHM’s Goschen, Cannie and Nowie projects, providing upside optionality if market conditions support expanded production.
The agreement reflects how global rare earths supply chains are shifting away from concentration in China. VHM has environmental approvals for Goschen in place and has received funding interest letters from both Australian and US governments, signalling geopolitical support for rare earths production in allied nations. Iluka’s strategy to build Victoria as a feedstock hub, combining its own Wimmera project with VHM’s Goschen, creates regional advantages in logistics and operational synergies while leveraging Victoria’s reputation for large rare earths deposits with attractive heavy rare earth characteristics.
Investors should monitor VHM’s progress toward final investment decision, which would trigger Iluka’s $30 million convertible note drawdown. The refinery’s mid-2027 commissioning and early production performance will be critical milestones, alongside Iluka’s execution of its broader rare earths portfolio strategy. This announcement is price sensitive and has been flagged as material by the Australian Securities Exchange.
View the full ASX announcement (PDF)
About Iluka Resources Limited (ASX: ILU)
Iluka Resources Limited is a global critical minerals company that engages in exploration, project development, mining, processing, marketing and rehabilitation of mineral sands and rare earth minerals. The company produces titanium dioxide feedstocks, zircon products, and rare earth minerals, operating mining facilities primarily in Australia including locations in South Australia, Western Australia, and New South Wales. Iluka operates internationally with sales across Australia, China, Asia, Europe, the Americas and other global markets.
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