Iluka Resources Limited · ASX:ILU
Iluka Resources — Informa Mineral Sands Conference 2019
27 slides from Iluka Resources's conference presentation, Mar 20, 2019
Slide 1: Informa Mineral Sands Conference 2019
1 Informa Mineral Sands Conference 2019 Iluka Resources Limited (ASX:ILU) Simon Hay, Head of Resource Development Jacinth-Ambrosia, South Australia, Australia
Slide 2: Disclaimer – Forward Looking Statements
Disclaimer – Forward Looking Statements This presentation has been prepared by Iluka Resources Limited (Iluka). By accessing this presentation you acknowledge that you have read and understood the following statement. This document provides an indicative outlook for the Iluka business in the 2019 fi
Slide 3: Sustainability
Protect the safety, health and wellbeing of our employees and manage our impact on the environment. Support the communities in which we operate. 3 Sustainability Build and maintain an engaged, diverse and capable workforce. 3.5 1.0 741 Hectares Group TRIFR 2018 Group LTIFR 2018 rehabilitated (2017:
Slide 4: Overview
Overview 4 • Zircon market viewed to be broadly balanced in 2019 Industry Outlook • High grade titanium feedstock market tight with limited feedstock inventory through chain • Challenges facing the industry - supply and new projects • Our purpose - deliver sustainable value Iluka’s Approach • Indust
Slide 5: Industry Outlook
Industry Outlook Jacinth-Ambrosia, South Australia, Australia
Slide 6: Markets - Zircon
Markets - Zircon 6 Iluka sees the zircon market as being broadly balanced during 2019… Global Supply Global Demand • Significant inventory depletion in recent years • H2 2018 saw slight easing in tightness ‒ 2016-18 supply = production + inventory ‒ reduced output from Chinese tile industry (environ
Slide 7: Markets – High Grade Titanium Feedstocks
Markets – High Grade Titanium Feedstocks 7 High grade feedstock supply impacted by production outages… Global Supply Global Demand • Production disruptions reduced supply throughout 2018 • Many pigment plants at high operating rates • Some still unresolved • Reduced pigment prices in some regions •
Slide 8: Industry Supply Challenges
Industry Supply Challenges 8 • Unconventional deposits requiring technical solutions (e.g. fine minerals, depth, product quality) • Zircon and rutile typically induced as by-products of ilmenite projects • Limited high zircon and rutile assemblage projects • Higher unit costs due to grade and distan
Slide 9: Industry Response
Industry Response 9 • High grade titanium feedstocks - limited response to shortage • Zircon - aside from Iluka, 2018 industry response limited to Kalimantan swing producers Indonesian Zircon Exports – Total and to China, 2010 to 2018 Zircon sand and concentrate equivalent (kt) Price (US$/t CIF) 14
Slide 10: Iluka’s Response - ZIC Production
Iluka’s Response - ZIC Production 10 • Produced by upgrading / blending current and stockpiled MSP byproduct streams • Simple reclaim with minimal processing and low cost Mineral Processing Unit, Narngulu (90ktpa capacity) • Match production / sales to market Iluka’s ZIC1 sources • US: almost deplet
Slide 11: Iluka’s Approach
Iluka’s Approach Cataby, Western Australia, Australia
Slide 12: Deliver Sustainable Value
Iluka’s Approach 12 DELIVER SUSTAINABLE VALUE Disciplined capital allocation Preserve and advance growth Creation of a sustainable operating opportunities environment Iluka’s capital allocation framework prioritises funds Iluka’s position within the industry and the wider Exhibit leadership and disc
Slide 13: TSF Risk Management
13 TSF Risk Management Tailings Storage Facilities (TSF) Overview • Iluka employs downstream construction method on all TSFs (including SRL) – Upstream construction method is not used at all (higher risk associated with upstream method) • Iluka has one in-pit TSF (full-height), and one external TSF
Slide 14: TSF Risk Management
14 TSF Risk Management Internal risk management protocols • TSFs constructed using risk based design, according to ANCOLD guidelines – Downstream raising design method or final height embankments • Increased storm water management at downstream cascaded facilities (high rainfall areas and valley top
Slide 15: Addressing The Deficit
Addressing The Deficit Test Pit, Wimmera Project, Victoria
Slide 16: Addressing The Deficit
16 Addressing The Deficit • Zircon market tightness eased toward end H2 2018; underlying structural deficit remains • High grade feedstock market tight as a result of industry wide production interruptions • Iluka can continue to release additional ZIC to assist customers / balance market • Project
Slide 17: Commissioning of Cataby
17 Commissioning of Cataby Project enters commissioning • Core construction activities complete, on schedule and within budget • Wet commissioning commenced late Q4 2018 • In-pit mining unit in place and production of HMC has commenced Material flow • HMC stockpiled on-site and separated into magnet
Slide 18: Commissioning of Cataby
18 Commissioning of Cataby Project Metrics • Initial capital cost estimated higher end of $250 - $275 million • Tracking well and costs more likely to be mid-range between $250 - $275 million • Reduced capital costs by ~$100 million through use of repurposed plant from Newman, Douglas and Gingin • 8
Slide 19: Ambrosia Mine Move
19 Ambrosia Mine Move Assisting Iluka to meet Group zircon production targets of ~335 thousand tonnes per annum over the next three years 1 • Iluka Board approved accelerated mine move to Ambrosia in 2018 • The mine move is expected to be completed by October 2019 (previously 2022) • Capital expendi
Slide 20: Iluka’s Response
Iluka’s Response 20 Iluka’s response to tight market conditions3 Iluka’s Zircon Production and Sales • Guided 2019-2021 zircon production of ~335ktpa kt Production 1 Zircon sand ZIC ZIC flex Sales 500 ‒ Cataby project tonnes available in 2019 ‒ early Ambrosia mine move (smoothing production) ‒ Incl.
Slide 21: SR2 Major Maintenance Outage
21 SR2 Major Maintenance Outage • Capital expenditure of ~$35 million • MMO generally conducted every four years - the previous five year campaign processed record tonnes • Production ceased during MMO - approximately 51 day outage • ~400 employees and contractors on site per day • Prioritises relia
Slide 22: Sierra Rutile Expansion Projects – Gangama
Sierra Rutile Expansion Projects – Gangama 22 Expansion project underway to double capacity to 1,000-1,200 tonnes per hour • Construction of second concentrator nears completion • All heavy lifts and equipment installation complete • Construction of second ramp complete • Commissioning expected seco
Slide 23: Sierra Rutile Expansion Projects – Lanti
Sierra Rutile Expansion Projects – Lanti 23 Expansion project underway to double capacity to 1,000-1,200 tonnes per hour • Fabrication of second dry mining unit complete (DM4) • Operations at dredge have ceased – Floating concentrator to be beached at purpose built landing pad – Re-purposed for use
Slide 24: Sierra Rutile Expansion Projects – Sembehun
Sierra Rutile Expansion Projects – Sembehun 24 Sembehun development • Sembehun contains ~70% of remaining Reserves at Sierra Rutile – Equates to mine life of over 20 years • Value optimisation studies underway to consider development approach • Studies scheduled to conclude alongside DFS in H2 2019
Slide 25: Wimmera Project
25 Wimmera Project Previously referred to as the ‘Fine Minerals Project’ • PFS commenced in August 2018 with completion of test pit ahead of schedule • Ore transported for testing and preparation of customer samples • Industry, competitor and market analysis underway • Strategic rationale of develop
Slide 26: Summary
26 Summary • Zircon market viewed to be broadly balanced in 2019 • High grade titanium feedstock market tight with limited feedstock inventory through chain Industry Outlook • Challenges facing the industry - supply and new projects • Iluka is well positioned • Our purpose - deliver sustainable valu
Slide 27: For more information contact
27 For more information contact: Investors: Melissa Roberts, General Manager – Investor Relations and Commercial Mineral Sands Operations investor.relations@iluka.com +61 (0) 450 398 431
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