Please find attached a release issued today in relation to one of Ilukas planned production responses in light of a supply-constrained market environment for both high grade titanium dioxide and zircon.
David Robb, as part of his AGM address, outlined a number of production response options the company has within its own portfolio.
The Eneabba recommencement is one of those.
Key features of the announcement:
· Planned recommencement of mining operations at Eneabba (Western Australia) from late 2011 (six months lead time) - producing 140kt of ilmenite (suitable as synthetic rutile feed); 25kt of zircon and 25kt of rutile per annum for 3 years (potentially extendable).
· Two synthetic rutile kiln operation from 2012 - with SR kiln 3 to be available for commercial production (after a maintenance outage in the 4th quarter of 2011) and expected to produce ~120kt of synthetic rutile per annum (in addition to ~200kt from SR kiln 2 in the South West).
· Part of the ilmenite feedstock for the SR3 kiln will derive from Eneabba, with the rest associated with Murray Basin ilmenite which Iluka has been able to process successfully as result of its R&D test work on a feed source previously not considered commercially useable.
· Part of the higher cash costs of production in 2011 in the July Guidance Update relates to the commencement of activities at Eneabba and Narngulu in 2011.
· Total capital expenditure for mining recommencement; upgrade of the Narngulu mineral separation plant to process the Eneabba concentrate and a major maintenance outage on kiln 3 is $35 million (note - this $35m represents half of the higher 2011 capital expenditure advised in the July Guidance Update).
· This is a highly competitive capital spend per tonne of final product produced associated with extensive re-use of idled equipment at Eneabba.
Please let me know if you have any queries.
Regards
Rob
Robert Porter | General Manager Investor Relations
Iluka Resources Limited | Suite 1-2, Level 9, 118 Queen Street | Melbourne VIC 3000
Phone +61 3 96000807 | Mobile +61 (0) 407 391 829
Perth Corporate + 61 8 9360 4700
