Iluka production falls as demand in Q1 weakens

PERTH (miningweekly.com) – Mineral sands miner Iluka has reported a 29.3% decline in production of zircon, rutile and synthetic rutile during the three months to March, compared with the December quarter, as demand for production in the first quarter remained typically low.

However, compared with the previous corresponding period, total production was up by 73.4%, to 151 900 t.

Zircon production for the quarter ended March reached 74 200 t, compared with the 65 700 t delivered in the March quarter of 2015, while rutile production was up from 20 300 t to 25 300 t and synthetic rutile production was up from 1 600 t to 52 400 t.

The miner told shareholders on Thursday that the higher production in the March 2016 quarter, compared with the March 2015 quarter, reflected the operation of the synthetic rutile kiln 2, which was restarted late in March last year.

Slightly higher zircon and rutile production was owing to increased use of mineral separation plants in the first quarter, compared with the previous corresponding quarter.

Sales revenue for the quarter reached A$102.1-million, which was down from the A$115.2-million achieved in the previous corresponding period, as a result of lower zircon sales and limited ilmenite sales. This was, however, partly offset by higher rutile and synthetic rutile sales.

The lower revenue was also due to a combination of different product mix and lower average weighted received prices for products, Iluka said.

In February this year, Iluka announced its intention to suspend mining and concentrating activities at the Jacinth-Ambrosia operation, in South Australia, for between 18 to 24 months, in an effort to improve cash flow at a time of subdued market demand, while contributing to an improvement in the zircon market dynamics as demand recovered.

The suspension would result in some 33 employees being made redundant, with a further 46 personnel retained and redeployed within the company.

The suspension occurred in mid-April this year, and would allow for the progressive drawdown of heavy mineral concentrate stockpiles held at site. The stockpiled ore would be processed at both the Hamilton and Narngulu mineral separation plants.