US miner Tronox in box seat for $900m WA rare earths play within months of allied countries’ minerals pact

New York-listed mineral sands miner Tronox is concocting plans to build a rare earths plant in WA with $US600 million ($904m) of taxpayer support from the US and the Federal Government. The potential backing from national credit agency Export Finance Australia and its American equivalent, Export-Import Bank of the US, to help bankroll the plans comes within months of the two countries pledging to work together on new rare earths projects and supply chains. Tronox said it had completed a pre-feasibility study and was now looking at definitive studies for a cracking and leaching plant at a greenfields site in Kwinana that would produce a mixed rare earth carbonate, including both light and heavy rare earths. “Tronox will now be working with downstream customers and other key business partners to develop a financeable project structure consistent with its long-term capital allocation priorities,” it said. Public information on the proposal and pre-feasibility study — which would outline indicative costs and production — is scant and the project is yet to be referred to WA’s Environmental Protection Authority. In a statement overnight Tuesday in the US, Tronox said the letters of support from the two government banks was a “demonstration of interest” in working with the company to build a new pipeline of rare earths supplies. “While Tronox currently mines and sells tailings materials containing rare earth elements, the letters from EFA and EXIM highlight the opportunity for Tronox to assume a leading role as a supplier of rare earth elements to support the critical mineral strategies of Australia and the United States,” chief executive John D. Romano said. “We appreciate the support of EFA, EXIM Bank, and the governments of Australia and the United States in this next phase of our rare earths journey.” Shares in the New York Stock Exchange-listed company spiked more than 25 per cent to $US4.71 at the end of local trade on Tuesday. Connecticut-headquartered Tronox’s primary operations are predominantly in titanium dioxide, and it is the only company producing the white pigment, used abundantly in manufacturing, in Australia. It employs about 450 staff at its operations in the South West, which include the Wonnerup mine east of Busselton, a separation plant in Bunbury and a pigment plant in Kemerton. Cooljarloo — near Lancelin — is the anchor operation for Tronox’s titanium minerals mining and refining operations in WA. Tronox’s pivot to rare earths comes as it battles with weak demand for titanium dioxide as well as other commodities it produces. It booked a $US48m loss for the 2024 financial year and launched a cost-savings drive to shave expenses by between $US125m and $US175m. The letters from EFA and EXIM are non-binding and conditional, but have scope to provide up to $US600m to the company to “support the development of Tronox’s rare earth supply chain, including mine extensions, infrastructure support and cracking and leaching capacity”. The loans would be limited or non-recourse, meaning government lenders may only choose to pursue assets related to the transaction in the event of a default. Australia and the US agreed in October to jointly invest more than $US3 billion in mining and refining across the two countries, mainly in rare earths, to curb Chinese market dominance over minerals essential to build specialised magnets that power military equipment, smartphones, wind turbines and electric cars. Tronox’s plans represent a potential new player in Australia’s tight-knit pool of rare earths miners. Sydney-based Lynas Rare Earths is the country’s largest producer. Rare earths are mined from its Goldfields Mt Weld site and then refined at a $780m heavy-duty cracking and leaching refinery in Kalgoorlie. The material is then shipped to a separation facility in Malaysia where it is split into heavy and light rare earths, as well as other subsets crucial in magnets used electronic manufacturing, military and medical equipment. Iluka Resources is in the process of building a fully-integrated rare earths refinery in WA at Eneabba, funded by a $1.65 billion non-recourse Federal Government loan.