Australian firms lodge bid for Mrima Hill mining project

By , April 25, 2025

Two Australian firms RareX and Iluka Resources have formed a consortium to pursue development of the Mrima Hill project in Kwale county, coast region.

The project is notable for its deposits of rare earth elements, niobium, phosphate, and manganese.

RareX Limited, an Australian-based company specialises in the exploration and development of rare earth elements and other critical minerals. Iluka Resources Limited is primarily engaged in the mining and processing of mineral sands, including zircon and titanium dioxide products.

To actualise the deal, the firms established the consortium to apply for the formation of a Special Purpose Vehicle (“SPV”) to mine rare earth-niobium-phosphate-manganese in Kwale.

“The SPV will allow for RareX to take the lead in the project focusing on community engagement, environmental protection and technical derisking through studies and field work, aligned to RareX’s skills and experiences, particularly from Cummins Range which is a similar style deposit and from which learnings can be directly applied,” the firms explained. An SPV, which is a legal entity created for a specific purpose, is often used in finance, real estate, infrastructure, or investment projects. The role of an SPV is to act as a financial vehicle that enables companies or investors to manage risk, isolate liabilities, simplify transactions, and attract investment in a structured way.

It separates the financial risk of a particular project from the parent company. If the project fails, the losses are contained within the SPV and do not affect the parent company’s finances directly.

Hence the firm’s claim in a statement that this will help them in de-risking the Mrima Hill project. The partnership aims to integrate the Mrima Hill project’s outputs into a broader value chain, combining Kenyan mineral resources with Australian processing capabilities.

Under the proposed arrangement, RareX would lead the project’s socio-environmental and technical studies, leveraging its experience from the Cummins Range project in Western Australia where it runs a similar project.

Economic interest

Iluka would hold a 25 per cent equity stake in the SPV for at least a 20 per cent economic interest in the project throughout the Prospecting Licence phase and until a Mining Licence is granted.

RareX will fund all costs incurred by the Consortium until the Mining Licence is granted. The Australian companies announced that the consortium has made a formal application to the National Mining Corporation of Kenya (“NAMICO”), to acquire the Mrima Hill rare earth-niobium-phosphate-manganese project licence, which has now been formally received by NAMICO.

“Formal submission for Mrima Hill Rare Earths Project in Kenya has been made by the consortium to NAMICO under Kenya Mining Act chapter 306, Laws of Kenya (“Mining Act”) which, if successful, will see the proposal presented to the Cabinet Secretary for Mining, Blue Economy and Maritime Affairs (“Cabinet Secretary”) to contemplate the formation of a joint venture with NAMICO,” the consortium said in a statement.

The consortium agreement includes a binding conditional offtake term sheet with Iluka for all rare earth and heavy mineral products from Mrima Hill with rare earths having the potential to feed the Eneabba refinery facility in Western Australia, itself a coastal facility on the Indian Ocean.

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