Iluka Resources Limited · ASX:ILU
Iluka Resources — Smithers TiO2 Conference 2017
16 slides from Iluka Resources's conference presentation, October 2017
Slide 1: Smithers TiO2 Conference, Alicante Spain
20 17 www.iluka.com l ASX: ILU Smithers TiO2 Conference Alicante Spain October 2017
Slide 2: Disclaimer, Forward Looking Statements
Disclaimer, Forward Looking Statements Forward Looking Statements This presentation contains certain statements which constitute “forward-looking statements”. These statements include, without limitation, estimates of future production and production potential; estimates of future capital expenditur
Slide 3: Iluka's Mineral Sands Portfolio
Iluka’s Mineral Sands Portfolio PERTH BASIN EUCLA BASIN MURRAY BASIN SIERRA RUTILE VIRGINIA SRI LANKA Western Australia South Australia Victoria / New South Sierra Leone USA Wales Tutunup South mine Jacinth-Ambrosia mine Concentrate processing Gangama dry mine Rehabilitation Puttulam deposit Cataby
Slide 4: Titanium Applications
Titanium Applications Pigment Titanium Metal Welding (flux) ~90% of demand ~6% of demand ~4% of demand Nanomaterials Growing market Titanium dioxide pigment is opaque (white), Titanium metal has high strength to weight ratio Uses include solar cells, water purification, UV resistant and inert. and i
Slide 5: Zircon Applications
Zircon Applications Ceramics Refractory and Foundry Zirconia, Zirconium Chemicals ~50% of demand ~30% of demand and Metal ~20% of demand Zircon is heat resistant and non-reactive Zircon has many unique properties. Uses Zircon is opaque, water, chemical and abrasion Uses include steel and glass manuf
Slide 6: Zircon Market
Zircon Market Iluka result Zircon Prices* US$/t • Zircon sales up 28% relative to H1 2016 1,400 • Very active first quarter, against seasonal trend 1,200 Opening 1 Jan 16 Pricing 1,000 • Limited global zircon inventories outside Iluka • Weighted average premium and standard received price up 800 7%
Slide 7: High Grade Feedstock Market
High Grade Feedstock Market Iluka result • Rutile and SR sales volumes, excluding Sierra Rutile, are 20% higher than H1 2016 Pigment Rutile US$/t US$/t – including Sierra Rutile (H1 2017: 62kt) sales are up 58% 4,000 3,000 Pricing • Rutile prices up 4% relative to H1 2016 – 40% of SRL’s 2017 rutile
Slide 8: High Grade Chloride
High Grade Chloride TiO2 Kt High Grade Chloride Consumption v Production (Existing + Under Construction + Potential New) 3,500 3,000 Other New Projects 2,500 Other Existing 2,000 Iluka Expansion 1,500 Iluka Existing TZMI Demand (Aug 1,000 2017) 500 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Slide 9: Industry Re-investment Required
Industry Re-investment Required Capital Spend, Mineral Sands Industry Capital Expenditure Prices, US$/t FOB, US$m, nominal (Based on reported capital expenditure) nominal 1,500 2,500 1,200 2,000 900 1,500 600 1,000 300 500 0 0 Capital Spend - Others (LHS) 2005-16 Average Capital Spend (LHS) Rutile U
Slide 10: Grade and Assemblage Challenges Ahead
Grade and Assemblage Challenges Ahead HM Grade Mineral assemblage in resources RZ Assemblage 5% 15% Trash Sulphate Ilmenite 4% 12% 12% Chloride Ilmenite Rutile and other high grade TiO2 3% 9% 9% Zircon Combined RZ in HM (RHS) 2% 6% 6% 1% 3% • Trash component in HM grade increasing • Valuable HM grad
Slide 11: Sierra Rutile Acquisition
Sierra Rutile Acquisition • Counter-cyclical investment with strategic rationale and financial merit • Reserves support of 18.5 years – large resource base capable of extending economic life further • Iluka now the number one producer of rutile • Implementation of mining and processing improvements
Slide 12: Sierra Leone
Sierra Leone Capital Freetown Population 6.4 million Government Presidential republic Politics Two main political parties. Free democratic elections. Next election 2018. Language English (official), Krio (lingua franca) Economy GDP US$4.5 billion (2015), GDP per capita US$696 (2015) Main Industries
Slide 13: Cataby Project
Cataby Project • Large chloride ilmenite deposit with significant associated zircon and rutile production – ilmenite production to underpin continuation of synthetic rutile kiln 2 in South West • Located 150km north of Perth, Western Australia • Estimated life of ~8.5 years • Annual average producti
Slide 14: High Grade Titanium Feedstock Advantage
High Grade Titanium Feedstock Advantage • Natural and synthetic rutile have a higher titanium grade than other feedstocks • Advantages in pigment production: – lower ore tonnes required; – lower chlorine input cost; and – lower waste generation (environmental and cost benefits) • High ‘value in use’
Slide 15: Iluka's Approach
Iluka’s Approach Create and deliver value for shareholders Flex assets in Preserve and Act counter Disciplined line with market advance growth cyclically where capital allocation conditions opportunities appropriate Operational settings reflect Cataby project execute Sierra Rutile acquisition Iluka
Slide 16: Thank You
20 17 www.iluka.com l ASX: ILU Thank You Smithers TiO2 Conference Alicante Spain October 2017 16