Iluka Resources (ASX:ILU) entered into an agreement with VHM (ASX:VHM) to take the entire planned output of rare earth concentrate from the Goschen deposit in western Victoria under a long-term supply arrangement, according to a Thursday filing with the Australian bourse.

VHM will supply around 146,000 tonnes of concentrate over an 18-year period, containing about 86,000 tonnes of rare earth oxides, averaging roughly 8,320 tonnes of concentrate and 4,900 tonnes of rare earth oxides per year, which will feed Iluka's Eneabba rare earths refinery in Western Australia, per the filing.

The Eneabba refinery will convert these feedstocks into separated light and heavy rare earth products, with prices tied to the company's actual realized product sales.

The agreement also grants Iluka the first right of refusal on any additional production from Goschen, as well as from VHM's earlier-stage Cannie and Nowie projects, the filing said.

Iluka will support development by investing AU$40 million through a secured convertible note, issued in two tranches linked to project milestones, the filing added.