Australian Securities Exchange Notice

18 May 2016

ILUKA RESOURCES

2016 ANNUAL GENERAL MEETING

Iluka Resources Limited (Iluka) today held its 61st Annual General Meeting of Shareholders in Perth, Western Australia.

Shareholders voted on four resolutions: the election of one non-executive Director (Xiaoling Liu), the re-election of two non-executive Directors (Greg Martin and James Ranck) and the Remuneration Report. The results of the voting on these resolutions will be disclosed to the ASX separately.

A transcript of the addresses delivered by Chairman, Greg Martin and Managing Director, David Robb, are attached.

Investment market and media inquiries:

Dr Robert Porter

General Manager, Investor Relations

Phone: + 61 (0) 3 9225 5008 Mobile: +61 (0) 407 391 829

Email: [email protected]

Attachments:

Chairman's and Managing Director's AGM Addresses, May 2016

Iluka Resources Limited • ABN 34 008 675 018 • Level 23 140 St Georges Terrace Perth WA 6000

GPO Box U1988 Perth WA 6845 • T +61 8 9360 4700 • F +61 8 9360 4777 • www.iluka.com

ILUKA RESOURCES LIMITED 2016 ANNUAL GENERAL MEETING

18 MAY 2016, PERTH, WESTERN AUSTRALIA CHAIRMAN'S AND MANAGING DIRECTOR'S ADDRESSES

Chairman's Address

I will commence the business of the Annual General Meeting today with my Chairman's report to you. The Managing Director, David Robb, will then present the operating highlights for the past year and provide a perspective of more current activities.

Shareholders have been provided with details of the financial and operating conditions for the company in 2015 as disclosed in the full year results issued on 19 February and in the Annual Report as well as the Iluka Review, also issued on the same day. Copies of both documents are available here today.

I would encourage shareholders who have not consulted the annual report documents to do so, as they provide more detail than my address and that of the Managing Director will be able to convey today.

I will make some brief comments about the financial position of the company; discuss the Chief Executive Officer transition process and then address other governance and Board related matters.

Before I do, it is important to note some unwavering areas of board focus. The Board's commitment to the highest health, safety and environmental sustainable outcomes is of pre- eminent importance.

In relation to health and safety, the total recordable injury frequency rate, after an extended period of improvement, increased in 2015 to 6.7 from 3.6 in 2014. While the severity rate for injuries remained low, any reversal in a positive trend is taken very seriously and is being addressed with further organisational initiatives that have been discussed with the Board.

Environmental management performance is also a key area of board focus, and I am pleased that in 2015 the company recorded a 59 per cent decrease in level 3 and above (that is the more serious) environmental incidents. Our land rehabilitation activities meant that Iluka rehabilitated more land than it disturbed for the third successive year, as well as making some excellent progress on land rehabilitation at the Jacinth mine site in the Yellabinna Regional Reserve in South Australia. This work is featured on the inside front cover of the Iluka Review.

For a resources company, resource discovery or acquisition, delineation and ultimate reserve additions are always of strategic focus. The company's efforts through exploration; through investment in research and development and in unconventional resource conversion, reflect a multi-prong approach to this core business requirement for the long term sustainability and growth of the business. Ore reserves stand at 23 million tonnes, which in relation to 2015 production or depletion rates - which I recognise are lower than usual - provides approximately 12 years reserve cover. Iluka's resource position is 6.5 times larger than reserves, and obviously a consistent focus of management is on efficient resource to reserve conversion.

Financial Performance

In terms of the financial performance of your company, my observation in the Iluka Review was that the Board is less than satisfied with the current financial performance of the company. Clearly a reported profit of $54 million and a return on equity of 3.8 per cent are recognised by the Board and management as needing to be materially improved upon.

In saying this, shareholders will recognise that the mineral sands sector, similar to other mineral commodities sectors, has now experienced over three years of low market demand conditions and with it lower prevailing prices for the company's main products. This is certainly the case from the high cycle conditions which existed in 2011 and 2012 and during which the company generated higher earnings, cash flow and returns.

I think it is worth shareholders recognising that, despite the subdued financial performance, your company displays many characteristics which means it is in a strong position at this stage of the cycle.

Despite lower prices, the effectiveness of operational management to reduce unit cash costs means that the company recorded a Group EBITDA margin of 31 per cent.

The company generated free cash flow in 2015 of $155 million and was able to declare and pay a combined full year dividend to shareholders of 25 cents fully franked compared with 19 cents the previous year, a 31 per cent increase.

The company's balance sheet position remains strong. As at the end of 2015, the company had no debt, in fact a small net cash position of $6 million. Funding facilities stood at just over $1 billion dollars.

As such, your company is well positioned for both demand recovery and to invest counter cyclically - if appropriate opportunities are identified. I would also point out to shareholders that the company holds inventory on the balance sheet valued at $811 million which management expect to be progressively drawn down, both through production constraint initiatives and demand recovery. This will be positive for cash flow generation.

The Managing Director will provide further context on current market conditions and how this may influence financial outcomes in 2016.

Managing Director Succession

On 22 March, the company announced that succession planning for the Managing Director was progressing and that a transition of this leadership role was planned for the second half of the 2016 calendar year. I will remark on David's contribution shortly, but I thought it would be useful if I outline the approach and criteria being adopted by the board to select a suitable successor to David.

The Board has been pursuing a process for CEO/Managing Director succession which has been conducted in an orderly and disciplined manner. As part of this process, David has provided input and has, as agreed with him, provided experienced and capable internal candidates for the process of ultimate selection. David has also made his own commitment - which given David's character was never in any doubt - to remain firmly in control and committed to the company until he hands over to his successor.

I will say more about David's contribution at the end of the formal proceedings of the AGM.

The Board considers itself the custodian of the values and culture of Iluka and it is a non- negotiable criterion that whoever we select for the role of Managing Director is fully aligned with Iluka's values and approach to doing business.

There are also some aspects of Iluka's approach which are if not unique, then certainly a notable feature of the company's approach to doing business. These include an unremitting focus on return on capital, and therefore capital-efficient deployment decisions; and underpinning this, a rigour and depth of analysis which for a company of Iluka's size I consider unique. And there is Iluka's differentiated approach in terms of being prepared to flex production and being prepared to hold inventory - all of which I think reflects an appreciation of the value of what is after all a finite resource and in seeking to maximise the value to shareholders from this resource. There is also customised marketing - this is not an exchange traded commodity business; it requires skills in product development; technical selling arrangements; consistency of product quality; logistics and new market penetration.

A new CEO will need to embrace these key characteristics of the company and the way it conducts its business.

Clearly a key criterion is alignment of potential CEO candidates to Iluka's culture and values. Beyond this we are seeking an individual with pivotal and relevant industry experience, which can be transferred to Iluka and its business; we are clearly looking at strong leadership qualities; and for someone with agility and growth potential.

Each of these criteria are matched by a range of objective assessment factors and, with the help of a recognised external search consultant, the Board is reviewing both internal and external candidates. This process is nearing its conclusion and the Board would expect to be in a position to make an announcement in the not too distant future.

Governance and Board matters

Finally, some brief comments on other governance and board matters.

The Board focus on a number of key areas; obviously CEO succession and strength and continuity of culture being two.

There is also a focus on diversity - and by diversity I refer to gender diversity but just as importantly, in my view, the skills diversity of the board necessary to provide governance and strategic oversight as the company evolves and grows. We review, analyse and think about board skills and competencies a lot. The recent appointment of Dr Xiaoling Liu is for me an example of where we have been able to enhance board skills and in the process gender diversity. Already in her short time on the Board, having commenced in February 2016, her intellect, technical experience and senior executive experience in the materials and processing environment, have been evident and valuable. Xiaoling will speak later about what she brings to the Board.

I would also reference areas of focus by two Board Sub-Committees - the Audit and Risk and People and Performance Committees. I believe shareholders have been well served by these two Board Sub-Committees chaired respectively by Jenny Seabrook and Wayne Osborn. As part of its work in 2015, the Audit and Risk Committee oversaw the production and accelerated lodgement of audited full year financials, as well as the associated statutory Annual Report and Iluka Review coincidental with the full year results announcement.