The Chairman's and Managing Director's AGM addresses can be obtained on Iluka’s website www.iluka.com

David Robb's commentary includes extensive references to the proposed Super Resources Profits Tax, as well update on demand/supply conditions.  The following provides extracts from the AGM addresses:

Federal Government’s Proposed Resources Super Profits Tax

Iluka’s Chairman, Bob Every stated:

“While the company, in principle, would support the introduction of a well designed and structured resources tax, as a replacement for multiple State based royalties, this tax is nothing of the sort. It will instead add another layer of administrative compliance costs for companies. To call it a super profits tax when the hurdle rate applied is the risk free rate - the Commonwealth 10 Year Bond rate - is a misnomer and does not reflect the basis upon which resource companies make investment decisions.”

“Specifically in relation to Iluka and its shareholders, the company has not generated adequate profits for some time, and as shareholders are aware, made a loss in 2009.”

“The company has asked shareholders to forgo dividends and has invested significant levels of shareholder funds - over $650 million in the last three years - to deliver new profitable and high return projects, as well as the potential to resume dividend payments as cash flows allow.”

“Just at the stage where shareholders expect a return to profitability, and a reward for their patience and support, the Federal Government has announced a “super profits” tax on future earnings – effectively moving the goal posts without any recognition of the history of profitability of this company and, I suggest, others in the resources sector.”

“More broadly, Iluka is concerned that this tax, if implemented, will make Australia less competitive, which must ultimately adversely affect the contribution of the resources sector to the national economy.”

Iluka’s Managing Director, David Robb stated:

“Capital for resources projects is mobile and will go where the risk/return balance is judged to be most attractive. That, in future, may not be Australia, with its mining industry now facing the highest taxes in the world together with perceptions of “sovereign risk” – the latter being an issue investors in Australia haven’t really had to consider for more than 30 years. Fund managers do not need to invest here. If they believe they can get more attractive returns from investing in resources companies without an exposure to tax uncertainties in Australia, they will do so. At a recent world-wide resources conference at which I presented Iluka’s merits to investors, every single investor asked about the impact of the proposed tax and all were, frankly, very concerned about it. The same was true for other companies attending the conference. This has already had the predictable effect of lower share prices for Australian resource companies. Unfortunately our current Government and its advisors in Treasury appear not to understand investment markets and the importance of confidence in investment decision making.”

“…Our corporate plan will have to consider returns we can make in Australia under this proposed new tax regime versus elsewhere. We will need to review how much of our exploration expenditure is spent in Australia versus in other countries. Unfortunately, it is unlikely the final shape of any so-called “super profits” tax will be known until well into next year, making these assessments difficult.”

Business Outlook

David Robb stated:  “In conclusion, from a shareholder perspective, my management team and I are excited about a potential confluence of favourable events occurring for Iluka and in mineral sands which should deliver significantly improved financial performance.”

“To recap, these events are:

�         commencement of higher margin production from Jacinth-Ambrosia and Murray Basin, with the first full year of their contribution in 2011. While not only important for Iluka's shareholders, these two projects represent the main source of new zircon and rutile supply to the global market;

�         increased sales from these higher margin production sources will bring higher sales revenues and a better margin mix;

�         a dramatic reduction in the capital expenditure. This, in its own right is a transforming event in terms of cash flow available for shareholders. In combination with higher expected revenues this should provide the ability for Iluka to reduce its debt and to reconsider capital management options, including resumption of dividends;

�         favourable demand conditions and a tightness in supply which is already resulting in higher zircon prices, a process which Iluka as the largest global zircon market participant, selling one tonne in three of zircon, has been prepared to lead;

�         most of Iluka's high grade titanium product suite becoming unconstrained by contractual price caps from 2011;

�         in turn, the potential for Iluka to re-activate some or all of its idled synthetic rutile capacity, increasing volumes further and positioning Iluka as the incremental supplier of high grade titanium feedstocks more quickly, with less risk and for less capital than other industry participants; and, finally,

�         a very favourable outlook for the contribution from the Mining Area C iron ore royalty, both in terms of volumes and pricing.”

“These are all positive, but, we recognise that a large part of the outcome rests upon our ability to execute well in terms of market development and pricing leadership; new market penetration and growth; product development and consistent delivery of value to our customers.”

Regards

Rob