The cost of building Australia’s first rare earths refinery could be up to 80 per cent higher than originally thought, leaving open the possibility that taxpayers could have to lend more than the $1.25 billion pledged so far.

Iluka Resources revealed on Friday that Western Australia’s Eneabba refinery was now expected to cost somewhere between $1.5 billion and $1.8 billion and would produce its first separated rare earth oxides in 2026 rather than 2025.