Australian-based companies, Northern Minerals and Iluka Resources, have inked a rare earth element (REE) concentrate supply agreement covering the initial 8-year-plus mine life of Northern Minerals' Browns Range project in Western Australia.

The arrangement corresponds with Iluka making an initial investment of USD$20M in Northern through a convertible note (USD$15M) and share placement (USD$5M). Under the terms of the agreement, Northern will provide Iluka with an initial supply of up to 30,500t of rare earth oxide (REO) equivalent in xenotime concentrate from its Browns Range project. This is a long-term supply agreement between the parties, which requires Northern to supply and sell, and Iluka to acquire and accept, an agreed minimum quantity of goods up to 100% of the annual production projection. According to Northern, this support will allow Northern to complete a definitive feasibility study (DFS) for a mine and a commercial-scale beneficiation facility at the Browns Range REE project with financial backing.

The Brown’s Range project has an overall REE enrichment dominated by HREEs (heavy rare earths), like dysprosium and terbium, with about 87% of resources falling into this category. While LREEs (light rare earths), like neodymium and praseodymium, are the main components of NdFeB magnets, dysprosium and terbium are essential in the production of magnets used in higher temperature operating conditions, such as air conditioning (HVAC) systems energy efficient heating and electric vehicles (EVs).

As REE consumption in magnets continues to soar with the growth of NdFeB in new energy applications, Project Blue forecasts magnet demand to grow at a compound annual growth rate (CAGR) of 7.1% to 2027 and account for over 33% of the total REE market. Within this framework, additional supply of dysprosium and terbium will be necessary to meet high-performance magnet demand. Accordingly, Iluka’s agreement with Northern Minerals is not only a big step forward towards establishing Australia’s first fully integrated REE refinery at Eneabba but also a step towards fostering new HREE supply chains outside of China.