Iluka sales slip but prices remain strong

PERTH (miningweekly.com) – Mineral sands miner Iluka Resources on Wednesday told shareholders that zircon, rutile and synthetic rutile sales for the full 2015 were expected to be some 5% lower than previous guidance.

The company said that for the full year, mineral sands sales would likely reach 645 000 t, which was down from the 680 000 t previously predicted, but still 5% above the 616 000 t sold in 2014.

The company said that its approach for the year had not been to pursue volume at the expense of price, adding that this approach had limited the erosion of its received prices during the year.

In the year-to-November, Iluka achieved a weighted average received zircon price of $1 005/t, compared with the $1 033/t reported in 2014, for premium and standard product. Inclusive of zircon-in-concentrate sales, the weighted average received price reduced to $995/t.

“Iluka’s approach to sales volumes versus sales price trade-offs is cognizant of current market dynamics and both short and long-term objectives in the competitive positioning of its various products in different geographies and market sectors,” the company said on Wednesday.

“The company follows demand, and in doing so, effectively prioritises margins ahead of additional tonnes that might be secured via lower prices, even if that leads to a shortfall against budgets or guided parameters.”

Meanwhile, total cost of production was expected to be some A$30-million below guidance, while capital expenditure for the full 2015 was expected to be some 35% lower than the A$120-million guidance, at A$75-million.

The mineral sands miner noted that lower capital expenditure during 2015 was achieved in part by the deferral of some expenditure, such as that for land acquisition and for additional investment in Metalysis, which had been planned for 2015, but were now expected to occur in 2016.