Iluka released its September quarter production and development report.
The full report is attached. The main features can be summarised thus:
� Mineral sands sales revenue (after currency hedging) for the 9 months to 30 September of $300.4 million.
� September sales revenue after hedging of $151.1 million - 30 per cent higher than the June quarter 2009 and similar to total first half sales revenue.
� Higher sales across all products in the September quarter.
� Overall sales on a year-to-date basis are trending in line with the company’s expectations, as conveyed in ASX disclosure of 19 August. 2009 sales are weighted to the second half and majority weighted to the fourth quarter, especially for the higher value products of zircon and rutile.
� September quarter combined zircon, rutile and synthetic rutile (“SR”) sales volumes of approximately 200 thousand tonnes were around double the level of the first six months of the year.
� Based on Iluka’s supply response to GEC conditions physical production levels across all products have reduced to better match lower short term demand.
� Combined sales for zircon, rutile and SR exceeded production, allowing finished goods inventory to be drawn down, in part or whole, depending on product.
� Zircon production in the September quarter declined by 20.4 per cent relative to the June quarter. The reduction in 2009 is associated mainly with curtailment of mining activity in Western Australia. The main contribution to higher zircon production, as demand recovery occurs, will be from the Jacinth-Ambrosia and Murray Basin projects.
� Synthetic rutile production in the September quarter, compared with the June quarter, was 19.2 per cent lower, due to the idling of two of the company’s four SR kilns.
� Rutile production was down 11.8 per cent in the September quarter relative to the June quarter. Iluka’s current rutile production base will be supplemented by additional production from the Murray Basin Stage 2 development.
� Iluka has the capacity through its new production sources of Jacinth-Ambrosia and Murray Basin to increase zircon and rutile production above pre-GEC levels as demand recovers and then grows.
� High-grade titanium dioxide sales are trending in line with company expectations, with the majority of these volumes underpinned by contractual arrangements.
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� Zircon sales are strengthening, relative to a very low first half base; with stronger demand emerging in China as inventory has been drawn down and as government stimulus measures contribute to a recovery in construction and housing activity. Demand in Europe and North America for zircon has also improved, from a very low first half, but remains relatively subdued. - refer Iluka's Mineral Sands Briefing Paper - www.iluka.com
� A recent milestone was the completion of the Kulwin development in the northern Murray Basin and its commissioning and the production of first heavy mineral concentrate.
� The Jacinth-Ambrosia project in South Australia was 88 per cent complete at the end of the September quarter. Commissioning and production of first HMC is expected this year.
� The completion of these projects will represent the completion of the major capital phase for the company and largely complete the transformation of the company’s production base to two globally significant new supply sources.
Please let me know if you have any follow up queries.
Regards
Rob
Robert Porter | General Manager Investor Relations and Corporate Affairs
Iluka Resources Limited | Level 23, 140 St Georges Terrace | Perth WA 6000
Phone +61 8 9360 4751 | Mobile 0407 391 829 | Fax + 61 8 9360 4336
robert.porter@iluka.com