Iluka expects rutile sales drop after contract breach

Heavy minerals concentrate. Image: Iluka Resources

Iluka Resources has flagged that not all of its contracts for 175,000 tonnes of rutile would be taken or paid for this year.

This follows a customer’s failure to purchase its May shipment.

The Perth-based company proceeded to issue a notice of default to the customer after failing to take and/or pay for 20,000 tonnes of synthetic rutile.

The customer has subsequently issued a notice referring to matters that had been disputed by Iluka.

“Iluka disputes the validity of the notice and is continuing to endeavour to negotiate an appropriate commercial outcome,” the company stated in an Australian Securities Exchange (ASX) announcement.

Iluka is attempting to negotiate an outcome with the customer, which so far has taken 17,000 of its 80,000 tonnes of contracted synthetic rutile volumes this year.

The company also received notice from another customer that they might take less than the contracted amount of synthetic rutile for no more than three months.

This could impact their scheduled September shipment of 12,000 tonnes.

Iluka has sold 78,000 tonnes of synthetic rutile under its contracts for 2020 to date.

The company sold 207,000 tonnes of synthetic rutile last year, with the total rutile and synthetic rutile sales volumes hitting 407,000 tonnes and a revenue of $583 million.

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