Iluka Resources Limited · ASX:ILU
Iluka Resources — Ruidow Conference 2018
16 slides from Iluka Resources's conference presentation, May 23, 2018
Slide 1: Iluka Resources Limited – Ruidow Conference 2018
Iluka Resources Limited Ruidow Conference 2018 Pedro Liberal, VP Zircon Sales APAC, Iluka Resources Ltd Ningbo, May 23rd 2018
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: Outline
Outline • Current Environment • Risks and Opportunities • Iluka Approach 3
Slide 4: Current Zircon Environment – Supply
Current Zircon Environment – Supply SUPPLY FROM EXISTING MINES • Declining grades • Limited re-investment due to low profitability • Inventory largely depleted • Higher production costs Zircon Supply – Existing producers 1,600 kt Existing producers (no new mines1) 1,200 800 400 0 2010 2011 2012 2013
Slide 5: Current zircon environment – Supply: new deposits more challenging
Current zircon environment – Supply NEW DEPOSITS ARE MORE CHALLENGING Global Mineral Sands Resources Assemblage • Lower grades HM Grade RZ Assemblage 5% 15% • Lower quality 4% 12% • Expensive to operate 3% 9% • Higher risks 2% 6% 1% 3% Iluka’s assessment of industry ore 0% 0% Current and Active Limi
Slide 6: Current Zircon Environment - Demand
Current Zircon Environment - Demand POSITIVE IN ALL REGIONS DEMAND North America Europe India Rest of Asia Improved foundry Growth in High GDP growth Positive market construction conditions overall Strong tile and Steel refractories Positive ceramic sanitary ware Growth in industry production constr
Slide 7: Current Zircon Environment - Demand: China evolving
Current Zircon Environment - Demand CHINA EVOLVING • Positive growth • Environment • Factory closures • Consolidation • Structural reforms 7
Slide 8: Current Zircon Environment: Zircon Market
Current Zircon Environment ZIRCON MARKET • Imbalance: tightness continues - Expected to remain… for how long? • Supply projections include Iluka’s Cataby development and recently funded Image Resources development • Structural deficit could be mitigated by a combination Ambrosia mine move accelerati
Slide 9: Outline
Outline • Current Environment • Risks and Opportunities • Iluka Approach 9
Slide 10: Industry Risks and Opportunities: Need for New Supply
Industry Risks and Opportunities NEED FOR NEW SUPPLY Opportunities Risks Swing capacity Legal and ethical Best projects Future glut Technical development Over expenditure Concentrates Environmental footprint 10
Slide 11: Industry Risks and Opportunities: Better Prices
Industry Risks and Opportunities BETTER PRICES Opportunities Risks Better profitability New projects profitability Current price level Short term vs long term Thrifting is already happening Substitution Raw materials price increase Demand destruction 11
Slide 12: Outline
Outline • Current Environment • Risks and Opportunities • Iluka Approach 12
Slide 13: Iluka's Approach: Production
Iluka’s Approach PRODUCTION Additional stock JA expansion Cataby Other release 2017 and 2018 Jacinth-Ambrosia Commissioning Balranald restart 2019 and Puttalam expansion New technologies been developed 13
Slide 14: Iluka's Approach: Pricing
Iluka’s Approach PRICING Stability Communication Sustainability 6-monthly pricing Reference Price Avoid excesses since Oct-2017 which destroys value Market situation along the chain Give time for end users to absorb price increases Rationale Long term focus 14
Slide 15: Summary
Summary Current Positive Dynamics in the Zircon Market Environment Risks & For the Industry to Manage Opportunities Iluka’s Approach Ensure Sustainability Jacinth-Ambrosia, Eucla Basin 15
Slide 16: Iluka Resources Limited
Iluka Resources Limited Pedro Liberal, VP Zircon Sales APAC, Iluka Resources Ltd Ningbo, May 23rd 2018