Mineral sands miner Iluka MD Tom O’Leary said this week that the company would not complete its rare earths refinery in Western Australia without more Australian government funding.

Speaking after delivering the group’s interim financial results, O’Leary said Iluka required an appropriate risk-sharing partnership with the Australian government in order to advance the refinery development, which would cost between A$1.7-billion and A$1.8-billion.

“I am acutely aware of shareholder antipathy towards the uncertainty created by the delay and towards significant further spend in the context of that uncertainty,” he said.

O’Leary would not be drawn on further commentary around the discussions with the government, other than to say that talks were “well advanced”.

He reiterated Iluka’s stance that the Eneabba refinery was central to Australia’s critical minerals policy objectives.

“The Eneabba refinery will be a critical piece of infrastructure for both national security and the energy transition. It’s an archetypal project for the delivery of Western and like-minded policy initiatives in these areas.

“Iluka has a critical building block in the one-million-tonne stockpile ready and waiting to be processed at Eneabba and this will see operations through to the early 2030s with no new feed sources required. It is a unique offering globally.”

Shareholders have been pushing for guidance on Iluka’s rare earths plan should there be no commonwealth funding forthcoming. O’Leary said that it would be addressed in an upcoming update planned for later this year.

“As I said before, I know shareholders’ patience is limited and we are doing all in our power to deliver certainty. While I remain positive on the prospects of an appropriate risk-sharing funding arrangement with the Australian government being reached, I acknowledge these things are not done until they’re done. We look forward to being in a position to say much more in due course.”

Meanwhile, Iluka has struck a “prudent balance” of progressing critical path works at Eneabba while funding arrangements with the Australian government are being concluded.

Commenting on the first-half results, O’Leary said global macroeconomic uncertainty had seen subdued activity in the construction and real estate sectors. This was affecting customer buying behaviour in both the titanium and zircon markets.

Nevertheless, prices for Iluka’s zircon products were relatively strong and stable. In titanium feedstocks, the long-term contracts Iluka has in place for synthetic rutile offtake provided the company a high degree of revenue certainty. 

Iluka reported half-year mineral sands revenue of A$606-million, down 15% on the A$712-million in the first half of 2023.