Iluka Resources falls, RareX rockets on Kenya consortium plan
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More news: Shares in Iluka Resources fell in early trading after the mineral sands miner announced a consortium with rare earths developer RareX to apply for the Mrima Hill project in Kenya.
Iluka shares were down 2% to $3.70 at 10:55am AEST, while small cap RareX rocketed 19.4% to 4.3 cents.
Iluka Resources and RareX apply for Kenyan rare earths mine
The news: Mineral sands miner Iluka Resources has established a consortium with ASX small cap RareX to apply for the Mrima Hill rare earth-niobium-phosphate-manganese project in Kenya.
The numbers: If the project proposal is accepted by Kenya's National Mining Corporation (NAMICO), RareX and Iluka will form a special purpose vehicle (SPV) on a 75% to 25% basis respectively.
Iluka will take a 20% economic interest in the project throughout the prospecting licence phase and until a mining licence is granted.
The context: The SPV would see RareX take the lead in de-risking and developing the site, community engagement, environmental projection and technical de-risking through studies and field work.
The consortium agreement includes an offtake term sheet with Iluka for all rare earth and heavy mineral product from Mrima Hill, with rare earths having the potential to feed it Eneabba refinery facility in Western Australia.
Eneabba is currently under construction and supported by a $1.65 billion non-recourse loan from the federal government.
What they said: "If successful, the project could become part of a unique and independent mine to rare earth metal solution, backed by allied governments, and could contribute to deeper diplomatic relations between two Commonwealth countries, both non-NATO strategic allies of the US and both members of the Indian Ocean Rim Association," said RareX's managing director James Durrant.
"Our proposal would allow Australia to provide the complex rare earth value-add in a critical metals value chain, whilst providing Kenya with a major mining project and a domestic supply of manganese, niobium and phosphate for the local steel and agricultural sectors."
The source: ASX
