Iluka Resources Limited · ASX:ILU
Iluka Resources — Investor Presentation (May 2004)
17 slides from Iluka Resources's investor presentation, May 24, 2004
Slide 1: Introduction
Good morning ladies and gentlemen. As most of you are aware, zircon is a significant component of the mineral sands industry and is currently the subject of considerable industry discussion and interest given the change in market dynamics over the past 12-18 months. Tluka is in the fortunate positio
Slide 2: Market dynamics in 2003
Market dynamics in 2003 GY Significant US$ pi ice rises negotiated for 2004 Market Dynamics in 2063 At the beginning of 2003 the outlook for zircon was expected to remain robust overall but with some continuing regional differences, Demand for premium product was expected to remain strong with suppl
Slide 3: Iluka's response in 2003
Tluka’s response © uka’s Response in 2003 « Iluka was able to respond positively to its zircon customer requirements during 2003 and fill shortfalls caused by lack of supply from its competitors. « Asa result of a number of previously completed investments and new initiatives, the Company was able t
Slide 4: Western Australia operations contribution
Western Australia is currently Iluka’s most significant source of zircon, accounting for approximately 75% of the Company's production in 2063. We were able to increase production by 40,000 tonnes compared with 2002. The key drivers of the improved production performance in 2603 were: « a tange of o
Slide 5: USA operations contribution
USA operations contribution © ; ions Contributi « USA zircon production increased by 12,000 tonnes compared with 2002. « The key drivers of the improved production performance in 2003 were: « a range of operational efficiency improvements implemented as part of our business improvement or MnM proces
Slide 6: CRL operations contribution
CRL operations contribution Y CRL Operati ati The increase in zircon production from the Western Australian and USA operations more than offset the 9,000 tonne decrease in CRL's zircon production compared with 2002. Essentially CRL’s production was impacted by difficult mining conditions on North St
Slide 7: Zircon market share in 2003
Zircon market share in 2003 © Zircon Market Share The improved production and sales performance enabied liuka to increase its share of the zircon market from 33% in 2002 to 37% in 2003. However it should be noted that some of the additional sales opportunities in 2003 were to make up the shortfall f
Slide 8: Zircon supply and demand outlook
Zircon supply and demand outlook © glass and Lee Demand for zircon continues to increase in line with global GDP growth rates, however, producers are struggling to maintain supplies which has resulted in a further tightening of supply and a large potential supply deficit developing. We estimate that
Slide 9: Zircon pricing outlook
Zircon pricing outiook @ Chinese market is major growth: , Pricing © , As previously mentioned, the zircon market tightened in 2003, primarily as a result of supply side constraints. Continuing tight market dynamics forecast as modest demand growth of around 3% per annum will continue to outstrip su
Slide 10: Iluka's strategic focus
Tluka’s strategic focus G lluka’s Strategic F Unless global zircon production increases there is a real risk of a structural deficit in the supply - demand balance, which would leave zircon consumption restricted by supply for several years. As the market leader in zircon, Iluka believes that it is
Slide 11: Operational efficiencies
5 ional Efficienci Huka’s performance in 2003 was assisted by a significant contribution from the business improvement (MnM) program. The key 2003 achlevernents consisted of: * A$24 million pre-tax benefits achieved through cost savings with the key areas being Western Australian mining operations w
Slide 12: New developments - Lulaton project
New developments — Lulaton project © Tannese : Worth Canoling: pesisuipae eee es : : | Suatntaains Alatooe Georgia : e . ALULATON @° "3 coe 2 @GREEN COVE SPRINGS ® Mine Site }@ Mineral Resource More than replaces zircon prodi from GCS dredge New Developments — Lulaton Project The A$66 million Invest
Slide 13: New developments - Enterprise project
; rteot Mining fie New Developments — Enterprise Project The Enterprise deposit is the most significant remaining mineral sands resource on North Stradbroke Island with an expected mine life of approximately 15 - 18 years. In mid-2003, CRL committed to invest A$25 million to modify the Ibis concentr
Slide 14: Murray Basin project
; ~ Basin Prol The successful development of the Murray Basin remains the most significant element of Iluka’s future. It represents both a major capital investment and the mineral assemblage, which is high in rutile and zircon, is an essential part of Iluka’s. planned medium to long-term mineral san
Slide 15: Murray Basin zircon production
Existing Operations The Company has previously stated that it expects the Murray Basin, in the form of the Douglas and KWR projects, should deliver average arinual zircon production in the order of 64,000 tonnes of per annum in 2005 -2066 and 96,000 tonnes per annum in 2007 to 2015. In terms of fluk
Slide 16: Zircon exploration focus areas
Zircon exploration focus areas J Zircon Exploration Focus Areas Iluka’s zircon exploration is focused on a range of brownfields and greenfields opportunities. Brownfields exploration is being carried out near existing operations in Western Australia, the USA operations in Florida, Georgia, Virginia
Slide 17: Concluding comments
Concluding comments @ » improve value in ve in pas o non a sustainable basis Ve Aluka | is comm itted _ ig zirco customer requirements Concluding Comments Current and forecast market dynamics provide mineral sands miners and processors with a significant zircon opportunity gap. Global zircon product