Tronox joins Export Finance Australia-backed rare earths race in WA
New York-listed Tronox has secured more than $900m in taxpayer funding from Australia and the US to build a rare earths processing plant in Western Australia.
New York-listed Tronox is the latest company in line for hefty taxpayer funding as the Albanese government continues to spread its multibillion-dollar bets on rare earths mining and processing.
Tronox announced to the market overnight on Wednesday that it was on its way to securing $US600m ($903.6m) in funding from Export Finance Australia and the Export-Import Bank of the United States (EXIM).
The funding, split evenly between Australian and US taxpayers, would be used to help build a rare earths cracking and leaching plant in Western Australia, where Tronox has mined mineral sands for decades.
The announcement lifted the lid on Tronox plans to follow the lead of Iluka Resources in processing stockpiles of tailings rich in monazite left over from mineral sands mining.
The Australian government has already provided Iluka with $1.65bn to built what the company has hailed as the nation’s first fully integrated rare earths refinery at Eneabba, in WA. Like Tronox, Iluka does not have a rare earths mine but large monazite-rich stockpiles of tailings left over from mineral sands mining.
Lynas Rare Earths, the world’s biggest non-China producer, spent $800m building a cracking and leaching plant at Kalgoorlie in WA that is now being plagued by unreliable power supply.
The total global market for rare earths is estimated at about $US4bn a year, which makes it too small to attract the interest of major miners.
However, there has been a scramble by Western nations to develop mining and processing capacity to break China’s stranglehold on supply of rare earths materials vital in modern weapons systems and more broadly in electronics and renewables.
Tronox, a leading integrated manufacturer of titanium dioxide pigment, said it had secured “co-ordinated, non-binding and conditional letters of support from EFA and EXIM for up to $US600m in limited or non-recourse financing to support the development of a rare earth supply chain, including mine extensions, infrastructure support and cracking and leaching capacity”.
Connecticut-headquartered Tronox said the funding support was linked to the critical mineral and rare earths pact signed by Anthony Albanese and US President Donald Trump in October.
The signing of the pact caused a temporary spike in the share price of ASX-listed stocks such as Arafura Rare Earths and Northern Minerals, which also received letters indicating funding support from EFA and EXIM.
It is understood Tronox is looking at potential sites for a cracking and leaching plant at Kwinana, an industrial hub on Perth’s outskirts where it has a pigment processing plant.
Tronox has in the past sold tailings containing rare earths materials. The market for such material is dominated by processors in China.
The company said it was studying the feasibility of a cracking and leaching facility in WA to produce a mixed rare earth carbonate including light and heavy rare earths.
Tronox chief executive John Romano hailed the EFA and EXIM support as a milestone in its “rare earths journey”. EFA chief executive John Hopkins said the agency provided the non-binding and conditional letter of support in line with its mandate to back development of Australia’s critical minerals sector.
Tronox shares jumped by as much as 30 per cent in intraday trading after it announced the funding support on Tuesday. However, the stock is down about 60 per cent since this time last year amid tough times in the mineral sands industry. Iluka announced in September that it was mothballing a large part of its operations.
More Coverage
To join the conversation, please log in. Don't have an account? Register
Join the conversation, you are commenting as Logout