Australia’s $1.15bn rare earth bet lifts Malawi mine prospects
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Australia’s decision to unlock the full A$1.65 billion ($1.15 billion) financing package for Iluka Resources’ Eneabba refinery has improved the commercial outlook for Malawi’s Kangankunde rare earths project. The project is widely viewed as one of Africa’s most closely watched critical minerals developments.
The Australian government-backed loan covers the refinery that will process part of Kangankunde’s future output. Iluka said Export Finance Australia confirmed access to the full facility, while the refinery remains more than 50% complete and is targeted for commissioning in 2027.
Kangankunde has already secured a long-term supply agreement with Iluka under a 15-year deal signed in 2025. The mine is expected to supply about 6,000 tonnes of rare earth concentrate annually to Eneabba, equal to around 10% of the refinery’s expected feedstock needs.
The arrangement gives the Malawi project a clearer route to market at a time when many critical minerals developers are still searching for processing capacity and buyers before production begins. The refinery is expected to become a key hub for rare earth material from Australia and other sources, including output from Africa.
Rare earths are used in electric vehicles, wind turbines, robotics, smartphones, military equipment and advanced magnets. China still dominates global processing and refining, which has pushed Western governments to support new processing facilities rather than only mining projects.
Eneabba is central to that strategy because it is expected to become Australia’s first fully integrated rare earth refinery capable of producing separated light and heavy rare earth oxides. It is also designed to process material from multiple sources, including third-party mines.
Kangankunde is expected to begin production by the end of 2026 and could produce about 20,000 tonnes of concentrate a year once fully operational. Before Eneabba starts up, part of its output is expected to be processed through a facility in Kazakhstan, where Lindian Resources acquired a controlling stake earlier this year.
Iluka also said it signed a binding four-year agreement to supply magnet rare earth oxides to an unnamed global automotive company. The deal is expected to account for about 10% of planned refinery production during that period and generate between $155 million and $172 million in revenue.
