**Morningstar downplays debt concerns at Australia's Iluka Resources ILU.AX and expects additional offtake deals

** On Tuesday, critical minerals firm announced confirmation of an A$1.65 billion ($1.14 billion)government loan to fund the Eneabba rare earths refinery in Western Australia

** Alongside, co announced its first offtake agreement to supply magnet rare earth oxides to an unnamed automaker for a four-year period

** ILU shares fell ~11% on Tuesday, before rebounding over 4% the next day

** Morningstar attributes the selloff to the deal covering only 10% of the refinery's production over the contract period, and likely concerns over whether the company will be able to repay the loan and create value

** Morningstar says the global push to create a rare earth supply chain independent of China means Iluka will sign more offtakes as the refinery nears completion and ramps up, likely from mid-2027

** Raises "no-moat" Iluka's fair value estimate by 6% to A$9.50

** Shares up over 30% YTD

($1 = 1.4516 Australian dollars)