Iluka Resources Limited · ASX:ILU
Iluka Resources — Corporate Update (December 2024)
28 slides from Iluka Resources's corporate update, Dec 6, 2024
Slide 1: Eneabba rare earths refinery
1 Iluka Resources (ASX:ILU) Eneabba rare earths refinery Positive outcome of funding discussions and updated economics 6 December 2024
Slide 2: Disclaimer
Disclaimer 2 This release has been prepared by Iluka Resources Limited (Iluka). By accessing this release you acknowledge that you have read and understood the following statement. This release includes forward-looking statements reflecting Iluka’s current expectations. These statements are expresse
Slide 3: Positive outcome of funding discussions to deliver Eneabba refinery
Positive outcome of funding discussions to deliver Eneabba refinery 3 Refinery features $1,650m Loan terms non-recourse loan reflect shared risk From the Australian Government BBSY + 3.0%, flexible repayment terms Brownfield site, access Producing separated light to major utilities and heavy rare ea
Slide 4: Additional funding arrangements
Additional funding arrangements 4 Iluka’s partnership with the Australian Government encompasses key contributions from both parties, appropriate risk sharing, and the alignment of commercial and policy objectives Original funding – Additional funding1 – March 2022 December 2024 $1,250 million $400
Slide 5: Production optionality and illustrative scenarios
Production optionality and illustrative scenarios 5 Eneabba refinery potential feedstock options Illustrative scenarios assumptions Eneabba will be capable of processing a wide range of feedstocks Production and economic scenarios presented on basis of internal Iluka developments and secured that ar
Slide 6: Project and equity returns
Project and equity returns 6 Strong project economics and equity returns to Iluka based on a range of internally available feedstock (Scenario A); significant upside from improved utilisation over 35 year refinery longevity (Scenario B). Equity returns to Iluka reflect preferential cash flow waterfa
Slide 7: Illustrative production scenarios
Illustrative production scenarios 7 The Eneabba refinery is being developed as a multi-decade infrastructure asset capable of processing a range of feedstocks1 with optionality on feed to deliver highly valuable separated rare earth oxides NdPr and DyTb Rare earth concentrate feed (ktpa) NdPr (ktpa)
Slide 8: Capital expenditure
Capital expenditure 8 Capital estimate confirmed at $1.7-1.8 billion; Front End Engineering Design completed Growth, contingency and escalation account for ~25% of remaining capital spend Refinery capital April 2022 2024 expenditure FID estimate FEED estimate Iluka equity contribution and working ca
Slide 9: Operating costs
Operating costs 9 A secure, globally competitive, Western supplier of separated rare earth oxides, with full product provenance Resilient in the event of a low price environment Refining costs1 Labour, camp and admin $75-80m • Cracking, leaching and purification and separation and finishing costs ar
Slide 10: Cash flow waterfall
Cash flow waterfall 10 Strategic partnership cash flow waterfall preferences cash flow to Iluka equal to scheduled debt repayments Illustrative cash flow waterfall1 Project cash flows Cash flows waterfall priority Cash flows $m ILU cash flows Loan servicing Up to $81m p.a. preferential distribution
Slide 11: Operational readiness
11 Operational readiness Eneabba phase 2 plant
Slide 12: Key personnel and operational readiness
Key personnel and operational readiness 12 Iluka has processed and marketed industrial minerals for over 70 years The company is implementing operational readiness plans in line with the schedule for Eneabba’s commissioning, including detailed planning and personnel assignment Dan McGrath Organisati
Slide 13: Refinery process flow
Refinery process flow 13 The Eneabba refinery has been designed to allow maximum practicable flexibility in feed sources and rare earth oxide output while minimising cost and environmental impact The refinery will use sulfuric and nitric acid, based on process flow sheet in use at separation facilit
Slide 14: Rare earth markets and offtake approach
Rare earth markets and offtake approach F35 fighter jet
Slide 15: Strong industry fundamentals
Strong industry fundamentals 15 Global demand forecasts vary on market penetration of renewable energy technologies, substitution and magnet composition Additional NdPr oxide required over the next decade forecast to be ~35-130 thousand tonnes Materially higher amounts of DyTb required - Eneabba ref
Slide 16: Supply chain currently dominated by vertically integrated China
Supply chain currently dominated by vertically integrated China 16 China has vertically integrated its rare earth industry from oxides to metals, alloys, powders and magnets Pricing and other support mechanisms ensure market dominance across the value chain to ultimately support value add end use in
Slide 17: Chinese state influence on rare earth prices
Chinese state influence on rare earth prices 17 Rare earths are not exchange traded and there is no spot market. The Asian Metal Index is the only publicly available price index for rare earth oxides. The index is influenced by actions of the Chinese government and Chinese enterprises and not a refl
Slide 18: Important contribution to sovereign capability and secure supply chains
Important contribution to sovereign capability and secure supply chains 18 The Eneabba refinery is the first of its type in Australia and one of few facilities globally. It is critical infrastructure that establishes sovereign industry capability and on-shore value addition – supporting both nationa
Slide 19: Marketing approach
Marketing approach 19 Iluka is experienced in selling specialty minerals in non-exchange traded, opaque markets The marketing approach for Eneabba’s separated rare earth oxides will be based on supply of a sustainable, secure product with full provenance • To create a truly independent supply chain,
Slide 20: Stockpile value
Stockpile value 20 Rare earth price assumptions impact refinery value but also the value of alternate options such as monetising stockpile via concentrate sales Eneabba stockpile value sensitivity: NPV 8.25% (A$m)1 A$m $3,000 • At the current Asian Metal Index NdPr price (as at November 2024) the En
Slide 21: Supplementary Information
Supplementary Information Eneabba, Western Australia
Slide 22: Project economics
Project economics 22 1. Figures presented in real 2024 terms. Pricing assumes SCENARIO A SCENARIO B SCENARIO C Adamas Q4 2024 rare earths price forecasts and TZMI September 2024 mineral sands price forecasts 2. Average figures for 1-4 years and Life of mine (LOM) Eneabba stockpile + Scenario A + Ene
Slide 23: Concentrate purchase costs
Concentrate purchase costs 23 In addition to utilising Iluka’s unique rare earths stockpile, Eneabba Balranald concentrate value worked example will be a purchaser of concentrate feedstock from internal Iluka and 3rd party sources 2023 REO price Weighted average REO Balranald REO assemblage1 (US$/kg
Slide 24: Pricing assumptions
Pricing assumptions 24 Adamas Intelligence price forecast (Rare Earth Magnet Market Outlook to 2040, Q4 2024) US$/kg US$/kg (real 2024) (real 2024) Price forecast provider $250 $4,000 Adamas Intelligence: Adamas Intelligence are leading, independent $200 critical minerals industry experts. Their $3,
Slide 25: Simplified Eneabba refinery flowsheet and circuit capacities
Simplified Eneabba refinery flowsheet and circuit capacities 25 1 2 3 3 Cracking and leaching Purification 2 Separation and finishing • Blend of feed concentrate based on feed availability NdPr • Only selected circuits most relevant for modelling purposes shown • SX circuit capacities assume an aver
Slide 26: Mineral Resource and Ore Reserves Compliance Statement
Mineral Resource and Ore Reserves Compliance Statement 26 Mineral Resources and Ore Reserves Estimates As an Australian company with securities listed on the Australian Securities Exchange (ASX), Iluka is subject to Australian disclosure requirements and standards, including the requirements of the
Slide 27: Mineral Resource and Ore Reserve
Mineral Resource and Ore Reserve 27 MSP by-product stockpile Mineral Resource and Ore Reserve Selected TREO assemblages HM Assemblage2 Monazite Eneabba Balranald Wimmera Mineral Material In situ HM Clay Ilmenite Zircon Rutile + Lanthanum 22% 21% 18% Deposit Resource tonnes HM tonnes Grade Grade Grad
Slide 28: For more information contact
28 For more information contact Luke Woodgate, General Manager, Investor Relations and Corporate Affairs investor.relations@iluka.com