PERTH, June 24, 2026, 04:04 AWST
Iluka Resources dropped 10.8% to A$7.25 on Tuesday. Shares had opened strong at A$8.48 and jumped as high as A$8.60 before sliding hard, finishing just off the session low of A$7.09. The move erased early gains after the miner announced its first rare-earths sales contract and said it will get a A$1.65 billion government loan.
Iluka’s swing came after two announcements cleared up major uncertainty over the Eneabba refinery—funding’s now in place and there’s proof of demand from an end user. But the initial offtake deal only begins in 2028 and is set for 1,200 tonnes, about 10% of the expected output in its first four years.
Export Finance Australia said Iluka can tap the entire non-recourse loan. That structure keeps the lender’s claims tied to the project, not the rest of the company’s assets. Iluka plans to take A$1.25 billion by the end of 2026, when Eneabba is due to reach 75% completion, and will have the last A$400 million for the final stage of construction.
Iluka said its refinery is over 50% finished. The capital cost is still A$1.7 billion to A$1.8 billion. Commissioning is set for mid-2027. Civmec picked up the contract for structural, mechanical, piping, electrical and instrumentation work to finish the refinery.
Iluka locked in a take-or-pay deal where the buyer has to pay for 90% of volumes even if it takes less. Prices get set at the higher of set minimums or market rates, so Iluka will see at least US$155 million revenue; that figure could hit US$172 million using industry price forecasts. “Our first rare earths customer is a globally recognised automotive company,” Managing Director Tom O’Leary said. He also said Iluka is still in talks with more buyers.
Morningstar’s Jon Mills sounded upbeat, saying more Eneabba offtake deals are likely. The firm bumped its fair-value call on Iluka up 6% and said the shares look cheap after dropping on Tuesday.
S&P/ASX 200 fell 0.33% to 8,787. Lynas Rare Earths dropped around 0.2% and Arafura Rare Earths slid 1.9%. The moves in peers suggest Iluka’s decline was mostly limited to the company. The rest of the market was more stable.
Iluka still traded up about 108% from the same time last year, even after dropping on Tuesday. The earlier rally made the stock ripe for a pullback once the company said its first contract would bring in about US$39 million a year, and cash flows are still years off.
Eneabba faces construction, commissioning and ramp-up risks. Delays or higher costs could defer revenue. About 90% of initial contract output is still uncontracted. Iluka hasn’t named the customer, detailed the pricing, or outlined counterparty terms. Rare-earth pricing is still tied to Chinese supply and policy decisions.
There was still no new company announcement on the ASX early Wednesday. That left Tuesday’s reversal as the market’s last word before trading picks up again.
Next up are the key tests: the planned loan draw at the end of the year, refinery commissioning set for mid-2027, and locking in more customer deals before deliveries start in 2028. How those milestones play out will show if Tuesday’s drop is just a reset or something more for Iluka’s rare-earths valuation.
