Slide 1: Iluka Resources Limited 2021 Half Year Results
1 Iluka Resources Limited 2021 Half Year Results Tom O’Leary, Managing Director Adele Stratton, Chief Financial Officer and Head of Development Matthew Blackwell, Head of Major Projects and Marketing
Slide 2: Disclaimer and compliance statement
Disclaimer and compliance statement 2 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 2021 fina
Slide 3: Iluka's commitment to sustainability
Iluka’s commitment to sustainability 3 Key pillars of Iluka’s sustainability approach 1.7 TRIFR 43% (H1 2020: 3.2) female representation Health and safety Executive and Board (Total Recordable Injury Frequency Rate) Our people Our communities Environmental stewardship 26% 319ha Indigenous employment
Slide 4: Key features
Key features 4 • Mineral sands EBITDA $299 million, up 69% from H1 2020 ($177 million) • NPAT $129 million, up 14% from H1 2020 ($113 million) Strong earnings in recovering market • Reflects robust demand and constrained industry supply • Dividend of 12 cps, fully franked • Mineral sands EBITDA marg
Slide 5: Financial results
Financial results Capel, Western Australia
Slide 6: Results overview
Results overview 6 Units H1 2021 H1 2020 % Change Z/R/SR Production kt 300.7 287.8 4 ▲ $299m Z/R/SR Sales kt 457.6 241.6 89 ▲ Mineral Sands EBITDA ($177m H1 2020) Mineral sands revenue $m 735.6 456.6 61 ▲ Mineral sands EBITDA $m 299.2 177.1 69 ▲ Mineral sands EBITDA margin % 40.7 38.8 5 ▲ MAC EBITDA
Slide 7: NPAT – H1 2021 versus H1 2020
NPAT – H1 2021 versus H1 2020 7 $m 300 11 250 119 13 14 200 4 ( 63 ) ( 18 ) (8) 150 ( 39 ) (4) 8 ( 21 ) 100 114 129 50 0 30 June 2020 Price Volume Mix FX Ilm, monazite Unit COGS Idle & other Major Projects Government MAC/Deterra Corporate & Tax 30 June 2021 & other royalties Other Features • Increas
Slide 8: Net Cash – December 2020 to June 2021
Net Cash – 31 December 2020 to 30 June 2021 8 $m HY 2021 free cash inflow $180 million 400 306 3 350 (4) (1) 300 250 (85) (17) (4) (14) (6) 200 (8) (1) 150 100 220 50 50 0 Net cash 31 Dec Operating cash Dividends rec'd Exploration Interest Tax Capex Return of Other Treasury shares Dividends FX - USD
Slide 9: Balance sheet
Balance sheet 9 $m Net debt (cash), total facilities and gearing Gearing % 1000 40 800 30 600 20 400 200 10 0 0 -200 Total facilities available Net debt (cash) Gearing* -400 -10 H1 21 H1 15 H2 15 H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 H2 19 H1 20 H2 20 Net Debt, gearing and funding headroom Multi
Slide 10: Mineral sands markets
Se || ee. Mineral sands markets
Slide 11: Zircon key features
Zircon 11 Key Features Result H1 2021 Z/R/SR sales revenue • H1 2021 sales 177kt (H1 2020: 78kt) – Q2 sales of 91kt (+70% YoY) after Q1 sales of 87kt (247% YoY) Zircon 39% • Demand in key markets reflecting a return to pre-pandemic production levels Pricing • H1 2021 weighted average received zircon
Slide 12: High-grade titanium feedstocks key features
High-grade titanium feedstocks 12 Key Features Result H1 2021 Z/R/SR sales revenue • H1 2021 sales of 280kt (H1 2020: 163kt) • Demand robust, with industry supply concerns ongoing Synthetic rutile 42% Pricing • H1 2021 rutile price of US$1,224/t, up 2% from H2 2020 ‒ majority of H1 sales under exist
Slide 13: High-grade titanium feedstock long term market outlook
High-grade titanium feedstock long term market outlook 13 Key Features Supply outlook reflects declining existing operations and limited High grade feedstocks essential to pigment and welding industries production from new projects • Used to increase capacity utilisation of pigment plants and an ess
Slide 14: Operations
Operations Capel, Western Australia
Slide 15: Operations
Operations 15 Cataby / South West Jacinth-Ambrosia / Mid West Eneabba Sierra Leone Large chloride ilmenite rich mine, commissioned in One of the world’s largest zircon mines, discovered World’s highest grade rare earths operation, based World’s largest rutile mine, operating since 1960s. 2019. Ilmen
Slide 16: Inventory position
Inventory position 16 Decrease in inventory reflects strong mineral sands demand conditions and normalisation of synthetic rutile inventory levels • H1 2021 synthetic rutile production of 79kt vs sales of 191kt • Strong balance sheet to support inventory position • Track record of flexing operationa
Slide 17: Projects
Projects Eucla Basin, South Australia
Slide 18: Project pipeline
Project pipeline 18 The company develops and progressively gates projects towards execution subject to: improving confidence and satisfaction with the risk-return attributes; continued strategic alignment; and sequencing to take advantage of economic and market outlook ASSESS SELECT DEVELOP EXECUTE
Slide 19: Rare earths
Rare earths
Slide 20: Eneabba, Western Australia
Eneabba, Western Australia 20 Eneabba Phase 1 operational. Phase 2 under construction. Phase 3 – a fully integrated rare earths refinery – feasibility study progressing Project overview The Eneabba development in Western Australia involves the reclaiming, processing and sale of a strategic stockpile
Slide 21: Eneabba Phase 2 – high value strategic stockpile
Eneabba Phase 2 – high value strategic stockpile 21 Eneabba Phase 2 is a low capital, low operating cost, high return project utilising Key project parameters Eneabba Phase 2 the Eneabba stockpile, rich in high value rare earths Capex ~$35 million Average cash costs3 ~$35-40 million p.a. Eneabba sto
Slide 22: Eneabba Phase 3 – a fully integrated rare earths refinery
Eneabba Phase 3 – a fully integrated rare earths refinery 22 Iluka is progressing a ~$20 million feasibility study1 on Eneabba Phase 3, a fully integrated rare earths refinery. Most work is scheduled for completion by the end of 2021, in advance of finalisation of the feasibility study in early 2022
Slide 23: Mineral sands
Mineral sands Cataby, Western Australia
Slide 24: Synthetic Rutile Kiln (SR1) restart – execute decision
Synthetic Rutile Kiln 1 (SR1) restart, Western Australia – execute decision 24 A capital efficient, incremental synthetic rutile production response, to deliver increased high grade titanium dioxide feedstock in supply constrained market Project overview Parameters SR1 kiln is located at Capel, West
Slide 25: Balranald, New South Wales – definitive feasibility study decision
Balranald, New South Wales – definitive feasibility study decision 25 Third technology trial completed and confirmed effectiveness of the underground mining method; definitive feasibility study (DFS) approved Project overview DFS parameters and basis of design West Balranald is a rutile-rich deposit
Slide 26: Wimmera, Victoria – move to larger-scale piloting
Wimmera, Victoria – move to larger-scale piloting 26 Wimmera is a large-scale deposit with the potential to produce ceramic-grade zircon and rare earth products. Project work is focussed on finding a processing solution to remove impurities from the zircon Project overview The Wimmera project involv
Slide 27: Summary and outlook
Summary and outlook 27 Iluka is positioned to lead in the response to market and industry conditions by deploying its operations, product suite and development pipeline H1 key features • End markets returned to pre-pandemic levels of consumption; increased prices drove growth in earnings and NPAT •
Slide 28: Supplementary information
Supplementary information Narngulu, Western Australia
Slide 29: Production and Sales Volumes, Revenue and Cash Costs
Supplementary information 29 Production and Sales Volumes, Revenue and Cash Costs H1 21 H1 20 % change Production Zircon kt 141.9 92.2 53.9 Rutile kt 79.9 84.0 (4.9) Synthetic rutile kt 78.9 111.6 (29.3) Total Z/R/SR production kt 300.7 287.8 4.5 Ilmenite – saleable and upgradeable kt 235.3 215.4 9.
Slide 30: Weighted average received prices
Supplementary information 30 Weighted average received prices H1 20 H2 20 H1 21 US$/tonne FOB Zircon Premium and Standard 1,354 1,301 1,321 Zircon 1,265 1,194 1,254 (all products, including zircon in concentrate)1 Rutile 1,246 1,197 1,224 (excluding HYTI)2 Synthetic rutile Refer Note 3 Refer Note 3
Slide 31: Summary Group results
Supplementary information 31 Summary Group results $m H1 21 H1 20 % change Mineral sands revenue 735.6 456.6 61.1 Mineral sands EBITDA 299.2 177.1 68.9 Mineral sands EBITDA margin % 40.7 38.8 4.8 Mining Area C royalty EBITDA/share of profit in associate 9.0 48.0 n/a Underlying group EBITDA* 308.2 22
Slide 32: Income statement
Supplementary information 32 Income statement $ million H1 21 H1 20 % change Z/R/SR revenue 680.0 408.1 66.6 Ilmenite and other revenue 55.6 48.5 14.6 Mineral Sands Revenue 735.6 456.6 61.1 Cash costs of production (253.4) (293.2) 13.6 Inventory movement – cash (89.5) 98.1 n/a Restructure and idle c
Slide 33: Reconciliation of non-IFRS financial information to profit before tax
Supplementary information 33 Reconciliation of non-IFRS financial information to profit before tax Idle Expl & Mineral JA/MW C/SW SRL Corp Group (US/MB) Other Sands Mineral sands revenue 287.8 347.8 11.7 88.3 - 735.6 - 735.6 AASB 15 freight revenue 15.8 7.5 2.5 3.4 - 29.2 29.2 Expenses (128.1) (180.
Slide 34: For more information contact Luke Woodgate
For more information contact Luke Woodgate Group Manager, Investor Relations and Corporate Affairs investor.relations@iluka.com +61 (0) 477 749 942 Jacinth-Ambrosia, South Australia