Despite challenging and uncertain conditions, Iluka Resources says demand for its suite of products remains “very strong” amid tight global supply.
Its latest quarterly review states that demand for zircon remained strong in H1 2022, with sales of 191 thousand tonnes, including zircon in concentrate (ZIC).
Iluka’s Wimmera project involves the mining and beneficiation of a fine grained heavy mineral sands ore body in the Victorian Murray Basin for the potential long term supply of zircon and rare earths.
Chinese tile production was impacted by COVID restrictions, with a number of tile producers cautious about working with real estate developers, impacting demand for ceramics.
While refractory producers have secured H2 orders, and demand for foundry continues to be strong, the supply of premium zircon in China continues to be tight.
Tile production in Europe remained strong despite rising energy, transportation and raw material costs. In Spain, frits and glaze producers ran their operations at full capacity during the quarter.
Demand for abrasives and refractories is robust, with a backlog of orders until the end of 2022.
In Brazil and Mexico, demand for zircon from the ceramics industry continues to be strong, while in the US, demand for foundry and fused zirconia remains high.
The weighted average prices for zircon sand increased by about $US140 per tonne, effective July 1, and all of Iluka’s Q3 2022 zircon sales are fully contracted.
The company said demand for titanium dioxide feedstocks remained strong in H1 2022 with sales of 231,000t.
North American demand remains strong, with continued supply chain constraints on paints, coatings and plastics, due to a strong backlog in construction and remodelling projects.
Pigment inventories remain below seasonal norms with extended lead times and sporadic unplanned maintenance outages impacting supply. The war in Ukraine continues to restrict supply of ilmenite and rutile, increasing demand for feedstocks from Western producers such as Iluka.
There is continued interest from multiple customers seeking access to the minimal spot volumes available beyond committed tonnages in the second half, and Iluka expects pricing in H2 2022 to increase.
Meanwhile, Iluka has announced its final investment decision for Eneabba Phase 3, a fully integrated refinery for the production of separated rare earth oxides at Eneabba, Western Australia.
This decision was taken following the agreement of a risk sharing arrangement with the Australian Government, including a $1.25 billion non-recourse loan under the $2 billion Critical Minerals Facility administered by Export Finance Australia.
Iluka awarded Fluor Australia the contract to provide Engineering, Procurement and Construction Management services to the project.
Execution of Phase 2 (the production of a 90 per cent monazite concentrate and a zircon-ilmenite concentrate) has progressed through mineral commissioning, with first production of on-specification monazite concentrate, at design recoveries, achieved in June.
Iluka also provided an update on its rutile-rich Balranald deposit in the northern Murray Basin, New South Wales. Owing to its relative depth, Iluka is assessing the potential to develop the deposit via a novel, internally developed underground mining technology.
Balranald’s Definitive Feasibility Study funding was approved by Iluka’s Board in August 2021, and it continues to advance, with engineering and estimating materially complete.
Iluka is also involved with the synthetic Rutile Kiln 1 (SR1) restart in Capel, WA.
SR1 was placed in care and maintenance in 2009. Its restart represents a low capital expenditure, low risk opportunity to produce an additional 110ktpa of synthetic rutile, in light of industry supply constraints.
