Mineral sands miner Iluka has entered into a farm-in agreement with fellow ASX-listed Ero Mining over tenements held by its subsidiary South East Energy.

Iluka would have the right to acquire a 51% interest in the mineral sands over eight exploration licences in South Australia, with the right to increase this interest to 80% during the second year of the agreement.

The company would earn its initial 51% interest by spending A$150 000 on exploration within the first year, increasing its shareholding to 80% by spending a further A$150 000 in the second year.

Iluka would have the sole right and discretion to make a decision to mine any of the economically developable mineral sands deposits discovered within the tenement area.

In the event of a successful mining lease application, Ero would receive additional payments and royalties.