Iluka Resources Limited · ASX:ILU
Iluka Resources — Bank of America Merrill Lynch Conference Miami 2018
21 slides from Iluka Resources's conference presentation, May 16, 2018
Slide 1: Bank of America Merrill Lynch Conference Miami
20 18 For personal use only Bank of America Merrill Lynch Conference Miami www.iluka.com l ASX:ILU Tom O’Leary, Managing Director, Iluka Resources 16 May 2018
Slide 2: Disclaimer, Forward Looking Statements
Disclaimer, Forward Looking Statements For personal use only Forward Looking Statements This presentation contains certain statements which constitute “forward-looking statements”. These statements may include, without limitation, estimates of future production and production potential; estimates of
Slide 3: Iluka's Portfolio
Iluka’s Portfolio For personal use only lluka Resources has expertise in the exploration, project development, mining, processing and marketing of mineral sands. The company is a major global producer of zircon and high-grade titanium dioxide products. Perth Basin, Australia Synthetic rutile kiln Ca
Slide 4: Mineral Sands Applications
Mineral Sands Applications For personal use only Zircon Applications Titanium Applications Zircon is opaque (white) and water, chemical, heat and abrasion resistant. Titanium pigment is opaque (white), UV resistant and inert. Titanium metal has high strength to weight ratio and is corrosion resistan
Slide 5: Iluka's Approach
Iluka’s Approach For personal use only Deliver sustainable value Disciplined capital allocation Preserve and advance growth Flex assets in line with market opportunities conditions Iluka applies a capital allocation framework Cataby project under construction Operational settings reflect market cond
Slide 6: Zircon Market Outlook
Zircon Market Outlook For personal use only • Zircon from existing producers declining due to depletion and grade/assemblage decline • Inventory largely depleted • Supply projections include Iluka’s Cataby development and recently funded Image Resources development • Structural deficit could be miti
Slide 7: 2018 Zircon Market
2018 Zircon Market For personal use only Iluka’s Zircon Pricing Strategy • Tight supply conditions leading to steady price increases • Zircon <5% of final tile cost • Prices remain well down on previous spike • Previous price spike induced substitution and thrifting • Current customer feedback sugge
Slide 8: China Chloride Pigment Growth
China Chloride Pigment Growth For personal use only China forecast to favour chloride pigment for growth kt 3000 Sulfate Chloride 2016-2021 Four new chloride pigment plants built in last two years - total capacity of 200 ktpa CAGR 25% 2000 Industry analysts expect more chloride capacity to come on l
Slide 9: High Grade Titanium Feedstock Advantage
High Grade Titanium Feedstock Advantage For personal use only • Natural and synthetic rutile have a higher titanium grade than other feedstocks • Advantages in pigment production: – lower ore tonnes required; – lower chlorine input cost; and – lower waste generation (environmental and cost benefits)
Slide 10: 2018 Titanium Feedstock Market
2018 Titanium Feedstock Market For personal use only • Positive conditions in downstream pigment market Rutile prices increasing, historical lag to pigment prices (90% of demand) Index Oct 2015 = 100 Rutile price US$/t US pigment export price US$/t • Pigment plant closures in EU and China increasing
Slide 11: Positive Commentary from Market Players
Positive Commentary from Market Players For personal use only On pigment prices : … we see gradual price increases ongoing … we've talked about before implementing first quarter price increases after this we see low to mid-single-digit price increases for the rest of the year. But we see that contin
Slide 12: Sustaining and Growing Iluka's Business
Sustaining and Growing Iluka’s Business For personal use only 1. Delivery of projects 2. Organic growth options 3. Mergers & Acquisitions Jacinth-Ambrosia restart, expansion and Balranald unconventional mining Key criterion: Deliver sustainable value production options Fine minerals processing, to i
Slide 13: 2018 Delivery of Projects
2018 Delivery of Projects For personal use only Cataby mine Jacinth-Ambrosia Lanti Dry and Sembehun mine development expansion Gangama development expansions • Board approved Dec 2017 • Increased throughput to • Doubling of mine capacities • New mine development • Capex $250-275 million offset grade
Slide 14: Cataby Mine Development
Cataby Mine Development For personal use only • Provides ilmenite feedstock for continued synthetic rutile production • Financial returns underpinned – offtake agreements for 85% of synthetic rutile production for minimum 4 years • Construction period of ~18 months • Progress on schedule – camps, hi
Slide 15: Jacinth-Ambrosia Mine Expansion
Jacinth-Ambrosia Mine Expansion For personal use only Mine Expansion • Mining and concentrating capacity upgrade by 30% to partially offset impact of grade decline • Project scope involves concentrator expansion, additional mining unit and associated infrastructure • Definitive feasibility study wel
Slide 16: Lanti Dry and Gangama Expansions
Lanti Dry and Gangama Expansions For personal use only • Doubling of capacity at Lanti dry and Gangama mines to 1,000-1,200tph each – Lanti dry: construction of second in-pit mining unit and additional concentrator capacity – Gangama: construction of second concentrator, expanded truck and shovel op
Slide 17: Sembehun Mine Development
Sembehun Mine Development For personal use only Sierra Rutile operations and deposits • New 1,000-1,200tph mine at group of deposits northwest of existing operations • Pre-feasibility engineering study completed • Definitive feasibility study underway and planning for early works • Bridge and road c
Slide 18: Organic Growth Options – Next 3-5 years
Organic Growth Options – Next 3-5 years For personal use only BALRANALD, AUSTRALIA PUTTALAM, SRI LANKA FINE MINERALS, AUSTRALIA High grade deposit / rich assemblage Large sulfate ilmenite deposit Large resource but fine grained Potentially material source of global rutile and Ore overlays operating
Slide 19: Mining Area C Royalty Asset
Mining Area C Royalty Asset For personal use only • Iluka holds a royalty over iron ore produced from specific tenements of BHP’s Mining Area C (MAC) mine in Western Australia Mining Area C royalty terms • 1.232% of Australian • Total contribution $735 million since mining began denominated revenue
Slide 20: 2018 Outlook
2018 Outlook For personal use only Positive dynamics in zircon and high grade titanium markets Strong market conditions Focused on achieving sustainable zircon price outcomes Deliver projects on time and on budget - Cataby development, Jacinth-Ambrosia Project delivery expansion, Sierra Rutile expan
Slide 21: Bank of America Merrill Lynch Conference Miami
20 18 For personal use only Bank of America Merrill Lynch Conference Miami www.iluka.com l ASX: ILU Rehabilitated land, Murray Basin For more information contact: Adele Stratton General Manager, Finance, Investor Relations & Corporate Affairs adele.stratton@iluka.com +61 (0) 415 999 005 21
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