Iluka Secures A$1.65 Billion Rare Earths Loan as Shares Drop

This article first appeared on GuruFocus .

Iluka Resources ( ILKAF ) ( ILKAY ) has secured Australian government support for its Eneabba rare earths refinery, with Canberra agreeing to provide a A$1.65 billion, or about US$1.15 billion, non-recourse loan to help fund construction in Western Australia.

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The company expects the first A$1.25 billion tranche to be fully drawn by year-end 2026, when Eneabba is expected to be 75% complete. Even with that major funding step, Iluka's shares fell more than 10% in Australia, pressured by broad losses across Asian stock markets.

Iluka also announced a binding take-or-pay agreement to supply an unnamed global automotive company with about 1,200 metric tons of magnet rare earth oxides starting in 2028. The initial four-year deal represents roughly 10% of Iluka's planned production over the period, potentially giving investors an early demand signal as the company builds out its rare earths position.