PERTH (miningweekly.com) – Mineral sands miner Iluka has closed a tough first half, with revenues and profits falling on the back of subdued demand.

The ASX-listed company on Wednesday reported that mineral sands revenue for the half-year ended June had declined by 10%, to A$712-million, while earnings before interest, taxes, depreciation and amortisation fell by 22% to A$353-million.

Net profits after tax fell by 45% in the period under review, to A$204-million, with operating cash flows declining 53% to A$228-million.

“Global macroeconomic uncertainty is leading to more subdued levels of demand for mineral commodities, including Iluka’s products, relative to the immediate years post Covid-19,” said MD and CEO Tom O’Leary.

“We have been aided through this period by our leading market position, Australian production base, sustainable pricing approach and premium product offering. Iluka’s operational performance in the first half was strong and it was achieved alongside an important reduction in our total reported injury frequency rate.

“In keeping with the company’s track record over many years, Iluka will continue to focus on optimising the value of what we produce, coupled with market discipline and a deliberate approach to reinforcing the positive supply-side fundamentals for high-quality zircon and high-grade titanium feedstocks.”

O’Leary on Wednesday announced a four-month production pause at SR1, at its Capel synthetic rutile kiln operation, in Western Australia, starting September 30.

“Restarted in December 2022, SR1 is unique in the mineral sands industry as a premium swing production asset for high-grade titanium feedstocks. Its pause will coincide with the planned major maintenance outage at SR2, which will occur over the same four-month period. This enables Iluka to leverage the expertise of our SR1 workforce to SR2 maintenance works and, in doing so, reduce associated external costs by some A$4-million,” O’Leary said.

SR1 and SR2 will be restarted at the end of January 2024.

“Work continues at all stages of Iluka’s development pipeline, with those projects currently in execute phase, Balranald and Eneabba, a particular focus,” O’Leary added.

“Front-end engineering design for Eneabba is expected to conclude in late 2023. While the cost environment in Western Australia is presenting challenges for projects throughout the industry, Iluka is pursuing value optimisation measures, as well as operational efficiency improvements, to deliver a competitive, multi-generational refinery at an appropriate cost.

“We have also announced the commencement of a feasibility study into rare earth metallisation.

“Metallisation is the next stage of value addition after the production of rare earth oxides and is significant strategically. If developed, a commercial scale metallisation facility in a Western jurisdiction would remove the need for customers to process oxides through third-party tolling facilities, as is often the case today. This capability would broaden Iluka’s potential customer base and further enhance our marketability as a sustainable producer of light and heavy rare earths with traceable product provenance.”