Iluka Resources Limited · ASX:ILU
Iluka Resources — UBS Australian Resources & Energy Conference 2008
19 slides from Iluka Resources's conference presentation, Jun 18, 2008
Slide 1: Australian Securities Exchange Notice
Australian Securities Exchange Notice 18 June 2008 For personal use only ILUKA RESOURCES PRESENTATION TO THE UBS AUSTRALIAN RESOURCES & ENERGY CONFERENCE BY VICTOR HUGO, GENERAL MANAGER SALES & MARKETING Iluka Resources Limited’s (“Iluka”) General Manager, Sales and Marketing, Victor Hugo, presented
Slide 2: Investment market and media inquiries
Investment market and media inquiries Dr Robert Porter General Manager, Investor Relations and Corporate Affairs Phone: + 61 8 9360 4751 Mobile: +61 (0) 407 391 829 Email: robert.porter@iluka.com For personal use only
Slide 3: Iluka Resources Limited - UBS Australian Resources & Energy Conference
For personal use only Iluka Resources Limited UBS Australian Resources & Energy Conference Victor Hugo, General Manager Sales & Marketing 18 June 2008
Slide 4: Disclaimer – Forward Looking Statements
For personal use only Disclaimer – Forward Looking Statements This presentation contains forward-looking statements that are subject to risk factors associated with exploring for, developing, mining, processing and sale of minerals. Forward-looking statements include those containing such words as a
Slide 5: Iluka & Mineral Sands Supply/Demand
For personal use only Iluka & Mineral Sands Supply/Demand • Small, niche mineral resource sector • Displays late cycle characteristics • Demand linked primarily to urbanisation and demand growth in developing economies, particularly China, South East Asia • Increased evidence of supply/demand charac
Slide 6: Iluka's Position in Mineral Sands
For personal use only Iluka’s Position in Mineral Sands • #1 global producer of zircon • #2 global producer of titanium dioxide feedstocks • Significant 2007 market share position in the high value products of rutile (35%), synthetic rutile (66%) and chloride ilmenite (42%) Major Zircon and Titanium
Slide 7: Mineral Sands Products & Usages: Titanium Dioxide Feedstocks
Mineral Sands Products & Usages For personal use only Titanium Dioxide Feedstocks Paint & Coatings 53% Metal Pigment 4% 93% Plastics Welding 22% 3% Other 10% Paper 8% • Global demand ~ 6.0 million TiO2 units in 2007 • Value of feedstock sales ~ US$2.1 billion • Pigment demand major driver • Two type
Slide 8: Mineral Sands Products & Usages: Zircon
Mineral Sands Products & Usages For personal use only Zircon Refractory Zirconia & Zr 13% chemical 15% Foundry 13% TV glass 4% Other markets 1% Ceramics 54% • Global demand ~ 1.25 million tonnes in 2007 • Value of feedstock sales ~ US$0.9 billion • More varied and growing end use applications • Dive
Slide 9: Titanium Dioxide Pigment Consumption by Region
Titanium Dioxide Pigment For personal use only Consumption by Region Tonnes ('000) 7000 6000 5000 4000 3000 2000 1000 0 2002 2005 2010f 2015f North America Western Europe Asia Pacific China Other • Pigment demand shifting to developing regions – China and the Asia- Pacific region expected to be domi
Slide 10: Titanium Dioxide Pigment Industry – Chinese Demand
Titanium Dioxide For personal use only Pigment Industry – Chinese Demand Chinese Pigment Consumption TiO2 units ('000) 900 15% pa growth 750 600 450 300 150 0 2000 01 02 03 04 05 2006 Production Net imports • China expected to be largest consumer of pigment by 2014 (1.6Mt p.a.) • Production grew by
Slide 11: Zircon Demand Characteristics
For personal use only Zircon Demand Characteristics '000 tonnes 2,000 1,800 1,600 1,400 Other countries 1,200 Other Asia-Pacific 1,000 China 800 Japan North Am erica 600 Europe 400 200 0 1990 1995 2000 2005 2010f 2015f • China is now the largest market (~30% in 2007) • China is the market which is e
Slide 12: Urbanisation Trends – Driving late cycle development for TiO2 and zircon
Urbanisation Trends – Driving late cycle For personal use only development for TiO2 and zircon • 5 of the 10 largest cities are in BRICS • China & India urban populations forecast to grow by 600 million by 2030 • BRIC’s middle class estimated at 500 million by 2010 • Urbanisation an important influe
Slide 13: Chinese per Capita Consumption as evidence of late cycle development
Chinese per Capita Consumption For personal use only as evidence of late cycle development 100% 80% 60% 40% 20% 0% Steel Copper Alum inium Nickel Pigm ent • TiO2 pigment displays late cycle characteristics • Pigment consumption has potential to increase significantly in China 11 Source: Rio Tinto Ir
Slide 14: Zircon: Chinese Zircon Imports
Zircon For personal use only Chinese Zircon Imports Chinese Zircon Imports kt pa 500 400 15% pa growth 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007(e) Zircon sand Zircon Concentrate • Import demand expected to remain strong due to urbanisation trends • Large increase in concentrate imports
Slide 15: Zircon Concentrate Supply from Indonesia
For personal use only Zircon Concentrate Supply from Indonesia Cumulative Chinese Zircon Imports 2007 Tonnes Tonnes ('000) Chinese Zircon Imports from Indonesia ('000) 250 18 225 16 200 14 175 12 150 10 125 8 100 75 6 50 4 25 2 - - May-07 Aug-07 Mar-07 Apr-07 Nov-07 May Jan-07 Feb-07 Jun-07 Sep-07 O
Slide 16: Factors Influencing Supply
For personal use only Factors Influencing Supply • Southern African power supply • South African major source of mineral sands production relative to Australia • Exxaro production outage in one of two slag furnaces • New production sources experiencing commissioning/production difficulties and delay
Slide 17: Pricing
For personal use only Pricing • H1 2008 pricing indication (metric tonne)1: • Rutile (bulk): high US$400s FOB • Synthetic Rutile: low US$400s FOB • Zircon (bulk) mid US$700s FOB • Sulphate Ilmenite: low US$100s FOB • TZMI are forecasting that zircon prices will increase by US$50-70/t in H21 • TZMI f
Slide 18: Investment Proposition
For personal use only Investment Proposition • Iluka is well positioned to create and deliver shareholder value • Attractive medium term growth characterised by: • Global leadership position in mineral sands • Favourable supply/demand dynamics • High quality growth projects delivered between 2009 –
Slide 19: Iluka Resources contact
For personal use only Iluka Resources Robert Porter General Manager, Investor Relations 08 93604751 robert.porter@iluka.com www.iluka.com 17
Iluka Resources — UBS Australian Resources & Energy Conference 2008 on 6ix