ILUKA RESOURCES LIMITED (ILU.AU) plummeted 7.87% in Tuesday's intraday trading session.

The mineral sands producer had initially surged as much as 5.8% at the open after announcing it struck a binding agreement to supply magnet rare earth oxides to an unnamed global automotive company and confirmed access to a A$1.65 billion non-recourse government loan for its Eneabba rare earths refinery construction.

However, the stock quickly reversed gains and turned negative, with traders potentially engaging in profit-taking after the initial rally or expressing concerns about the long-term nature of the offtake agreement which doesn't start until 2028.