Partnership involves an LOM supply contract and a strategic investment via equity and debt
King & Wood Mallesons (KWM) is advising Iluka Resources Limited on its strategic partnership with Northern Minerals Limited in a bid to hit a milestone for Iluka’s rare earth business.
Beyond a simple partnership, Iluka will receive a life-of-mine agreement for the supply of rare earths concentrate from Northern’s Browns Range Project. In return, Iluka will make a strategic investment in Northern via an initial placement and convertible note, with the possibility for more under a further placement and reciprocal put and call options.
The proposed transactions build on KWM’s existing role in guiding Iluka on the approvals required from the State of Western Australia under Iluka’s State Agreement for the development for the Eneabba refinery.
Once settled, Northern’s concentrate will act as an additional source of feedstock for Iluka’s Eneabba rare earths refinery in WA, which will establish the Eneabba refinery as a long-term producer of heavy and light permanent magnet rare earth oxides. The subscriptions could also provide Iluka with up to a 19.9% shareholding in Northern.
The KWM team was led by partner and resources sector leader Lorenzo Pacitti, corporate mergers and acquisitions partner Antonella Pacitti, and banking and finance partner Nathan Collins. They are supported by solicitor Olivia Harle and senior associates Christopher Barry, Toby Newnes and Peixin Truong.
“We are delighted to have partnered with Iluka and Gresham on this milestone transaction, and to have been able to deliver cross-practice support across the resources, corporate and finance elements of this deal,” Pacitti said. “We look forward to assisting Iluka to establish Eneabba as a strategic hub for the downstream processing of Australia’s rare earth resources, including through the delivery of Australia’s first fully integrated rare earths refinery.”
