Iluka Resources boss Tom O’Leary likes US rare | Australian Markets
The chief of Iluka Resources has indicated the long run Eneabba rare earths refinery close to Jurien Bay would thrive on the price ground set by the Trump Administration for 2 key rare earth components.
Tom O’Leary made the feedback as web revenue from Iluka’s core mineral sands business continues to wane.
The company’s backside line for the primary half of 2025 fell to $92 million, down from $134m for first half of 2024 and fewer than half of the $204m web revenue it produced for a similar period in 2023.
But speak of the mineral sands hardship has been overshadowed by the $1.7 billion taxpayer-funded development of the Eneabba refinery, which is set to be commissioned in 2027.
The US authorities final month agreed to pay a minimal of $US110 a kilogram for MP Material’s neodymium and praseodymium for a decade, as half of a landmark deal struck between Uncle Sam and MP.
“The US government’s floor price of $US110 a kilo is very close to Adamas Intelligence’s long term view of $108 a kilo over the next 10 years, which formed the basis of the (Eneabba) project economics we published back in December,” Mr O’Leary stated on Wednesday.
Federal Resources Minister Madeleine King earlier this month stated Australia might comply with the lead of the US and set up a rare earths price ground baked into authorities offtake agreements with home producers of the weather.
This offtake might feed into a $1.2 billion essential minerals strategic reserve introduced by Ms King in April that can be targeted on rare earth components.
Other Australian industry gamers, like Arafura Rare Earths, have additionally given their thumbs up to the price ground by the US.
Shares in Iluka had been down 8.7 per cent to $6.02 by 12.10pm as traders digested the revenue fall and bleak mineral sands market outlook.
Iluka acknowledged it had maintained a “resilient” mineral sands earnings margin of 39 per cent. But it warned self-discipline can be key to “dealing with the present uncertainty and positioning for recovery”.
“In mineral sands, lower levels of economic activity have weighed on customer purchasing behaviour. This has occurred alongside the imposition of US tariffs on zircon; the closure of pigment plants in Europe and China; India enacting anti-dumping duties on Chinese titanium dioxide imports; and production curtailments in Indonesia,” the company acknowledged.
Operating money circulate retreated 39 per cent for the period to $115m. The board declared an interim dividend of 2¢ share.
Citi analyst Paul McTaggart famous Iluka’s key zircon earnings stream is going through growing margin pressures this quarter.
“Iluka did not provide guidance for third quarter zircon sales volumes or price, but today noted the average quarter three zircon price contracted to date in the September quarter is about $US80 per tonne lower than June quarter,” he stated.
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