Iluka to revive mothballed minerals sands operation

Image: Iluka Resources

Despite negative press related to ANU divestments earlier this month, it’s business as usual for Iluka Resources as they prepare to reopen a West Australian mine thanks to improvement in the mineral sands market.

Now through the worst of downturn that started when mineral sands prices plunged in 2012, Iluka has said it is preparing for a possible restart of the Tutunup South mine in January next year.

Iluka’s revenue of $1015 per tonne of zircon, rutile and synthetic rutile has had no material change since the figure was reported at 30 June, reflecting stability in weighted average prices.

Mineral sands revenue in the September quarter was $147.7 million, up marginally from $147 million at the same time last year.

On a year to date basis, revenue stands at $491 million, down 7.1 per cent from the same YTD revenue of $528.7 million.

Iluka said the lower sales revenue could be attributed to the timing of titanium dioxide shipments, together with seasonally lower iron oxide by product sales, as well as lower prices received for ilmenite from China.

Third quarter Zircon revenues are on trend with the previous quarter.

YTD production has increased this year with combined zircon, rutile and synthetic rutile output up from 380.4 thousand tonnes by 3.2 per cent to 392.6 thousand tonnes.

Iluka said the two Australian operating mines, Jacinth-Ambrosia in South Australia and Woornack, Rownack and Pirro (WRP) in Victoria, mining operations continued at full utilisation rates.

These rates enable optimum unit cash cost outcomes for the production of heavy mineral concentrate (HMC), which in the case of WRP is planned to entail a build of HMC levels over 2014 and into 2015, to be drawn down following the completion of planned mining in the first half of 2015 and before the commencement of mining at the next planned mine development. 

Iluka Resources is currently trading at $7.55, recovering from the fall to $7.41 this morning after last night's close of $7.75.

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