Iluka Resources Limited · ASX:ILU
Iluka Resources — TZMI Congress 2015
31 slides from Iluka Resources's conference presentation, Nov 17, 2015
Slide 1: Getting the Balance Right
Iluka Resources Limited Getting the Balance Right David Robb, Managing Director and CEO TZMI Congress – Shanghai, China 17 November 2015
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 expenditu
Slide 3: Mineral Sands – Part of Everyday Life
Mineral Sands – Part of Everyday Life 3
Slide 4: Have the Wheels Fallen Off?
Yj Have the Wheels Fallen Off? ILUKA
Slide 5: TiO2 Industry Share Price Performance
TiO2 Industry Share Price Performance Source: S&P Capital IQ • Paint average includes Akzo Nobel, PPG, Sherwin-Williams, RPM and Valspar • Pigment average includes Huntsman, Tasnee, Tronox, Kronos, ISK, Henan Billions and Chemours from 22 June 2015 • Mineral sands average includes Iluka, Rio Tinto,
Slide 6: Industry Suffering "COBAL"
Industry Suffering “COBAL” C Cash flow pressures O Ownership uncertainties B Balance sheet distress A Asset quality concerns L Leadership issues 6
Slide 7: Industry Dynamics
Industry Dynamics VHM GRADE / MEDIUM TO LONGER MATURING ORE HIGHER PRICES RISE OF CHINA ASSEMBLAGE TERM SUPPLY BODIES / FRESH REQUIRED TO – SULPHATE AND DECLINE CHALLENGE CAPITAL REQUIRED INCENTIVISE SUPPLY? CHLORIDE PIGMENT • Global decline in VHM • Limited known high quality • Major players operat
Slide 8: Global Grade and Assemblage Challenges
Global Grade and Assemblage Challenges HM Grade Mineral assemblage in resources RZ Assemblage 5.0% 15% 13% Trash Sulphate Ilmenite 4.0% 12% Chloride Ilmenite Rutile (and other high grade TiO2) 3.0% 9% 9% Zircon Combined RZ in HM (RHS) 6% 2.0% 6% • Trash component in Heavy Mineral grade increasing •
Slide 9: The Rise of China Pigment
The Rise of China Pigment ILUKA China Pigment Capacity Pigment (kt) = Chloride = Sulphate 3,500 3,000 2,500 2,000 1,500 1,000 500 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f
Slide 10: Industry Technology Waves
Industry Technology Waves 10
Slide 11: Pathways to Pigment
Pathways to Pigment End Use Sulphate Chloride Pigment Pigment Product Synthetic Upgrading/ Slag Slag rutile Conversion Sulphate Chloride Ilmenite Ilmenite Rutile Reserve Resource 11
Slide 12: Success in Mineral Sands
Success in Mineral Sands • Success in mineral sands requires ‒ balance sheet strength, industry-specific technical expertise ‒ market knowledge, access and reach • Self-sufficiency a competitive advantage/essential for success • Industry examples of shareholder value destruction associated with ‒ la
Slide 13: Extensive Mine Development Experience
Extensive Mine Development Experience Kulwin Mine, Murray Basin – 2009 Echo Mine, Murray Basin – April 2010 WRP Mine – May 2012 Jacinth-Ambrosia Mine, Eucla Basin – October 2009 WRP Mine – May 2012 Tutunup South Mine, WA – 2011 Eneabba Restart - January 2011 WRP Mine – May 2012 13
Slide 14: Iluka's Approach
Iluka’s Approach Objective: Create and deliver value for shareholders Three key aspects: • flex asset operation in line with market demand • preserve and advance growth opportunities • act counter cyclically where appropriate Organisational capabilities and alignment critical 14
Slide 15: Sources and Uses of Cash
Sources and Uses of Cash A$m Gearing (%) 800 60 600 45 400 30 200 15 - - (200) (15) (400) (30) (600) (45) (800) (60) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Cash from operations Disposals Equity issued Net debt drawn Net capex Acquisitions Dividends paid Net debt repaid Net
Slide 16: Balance Sheet
Balance Sheet Net Debt, Gearing and Funding Headroom • Balance sheet strength maintained – net debt (as at 30 June 2015) of $80.2 million – gearing (net debt/net debt + equity) 5.4 per cent – undrawn facilities of $784.9 million with total facilities of $950.0 million – $100.0 million in facilities
Slide 17: Preserve / Advance Growth Opportunities
Preserve / Advance Growth Opportunities EXPLORATION INTERNAL PROJECTS MARKET DEVELOPMENT INNOVATION & TECHNOLOGY Australian and international Cataby: Zircon pricing framework ASSR: - DFS completed - production 1H 2016 $11m spend in 1H 2015 - timing flexibility China Technical Centre Metalysis: Tier
Slide 18: Exploration
Exploration • Consistent, well funded exploration programme of ~$20 million per annum • Gated approach to exploration expenditure • Exploration in Australia − testing new concepts in mature basins • Increasing international focus − Sri Lanka, Kazakhstan, Brazil, US, Denmark • Targeting ‘adjacent’ co
Slide 19: Project Development Options
Project Development Options Balranald, New South Wales Eucla Basin Satellite Deposits, South Australia Cataby, Western Australia Puttalam, Sri Lanka 19
Slide 20: Tapira, Brazil
Tapira, Brazil • Joint venture with Vale Fertilizantes and Vale S.A.1 • Titanium and rare earth mineralisation in overburden of an existing phosphate mine • Minerals include anatase, ilmenite, monazite, crandallite • Phase 1 of Agreement - 2015 - geological, technical evaluations, market assessment
Slide 21: Metalysis, UK
Metalysis, UK • Iluka equity holding of 18.3% – right to increase up to 24.9% in event of IPO • May revolutionise metal processing: – cost-effective and simple – transformational products • Iluka shareholder value potential: – titanium feedstock customisation – increase demand for Iluka feedstocks –
Slide 22: Iluka Game Plan
Iluka Game Plan B CUSTOMER VALUE P P $ SHAREHOLDER RETURN and Deliver Value for Shareholders Ly EMPLOYEE ACHIEVEMENT LEADERSHIP 22
Slide 23: Iluka's Customer Proposition
Iluka’s Customer Proposition Reliability of Supply Efficient Operations Product Range Efficient Delivery Product Quality Removed Intermediaries Technical Support Economies in Scale Competitive Increased Transparency Based on Relative Economic Value Grounded in Analysis 23
Slide 24: International Customer Support
International Customer Support Includes market / industry analysis 24
Slide 25: Organised to Understand Customers
Organised to Understand Customers • Separate marketing, sales and analytics enables laser focus and deeper insight • Embedded into the organisation experts who understand our customers industries • Sales team speaks our customers language – 10 nationalities and 17 languages IMTI ILUKA 25
Slide 26: Hub and Spoke Distribution
Hub and Spoke Distribution 26
Slide 27: Reliability in Product Offering
Reliability in Product Offering • All product shipped in last 12 months in conformance with specification • Certified as complying with ISO 9001: 2008 • 8 new products launched in last 18 months 27
Slide 28: Product Development
Product Development COLLABORATION INDUSTRY ANALYSIS TECHNICAL SUPPORT • Collaborate with • Assess end sectors • Solution-focused industry bodies and and emerging trends support for customers universities on • Position Iluka early to around feedstocks and industry-wide issues adapt to and benefit pro
Slide 29: Summary – Iluka Areas of Focus
Summary – Iluka Areas of Focus Iluka is focussed on shareholder returns through the cycle Favourable medium term demand dynamics Integrated mining and processing operations…flex production in light of market conditions Internal growth options…commitment to exploration and market development 29
Slide 30: Getting the Balance Right
GY ILUKA ight Righ he Balance ing t Gettin
Slide 31: Iluka Resources Limited
Iluka Resources Limited For more information contact: 2014 Half Year Results Dr Robert Porter, General Manager Investor Relations robert.porter@iluka.com +61 3 9225 David Robb,5008Managing / +61 (0) 407Director 391 829 Alan Tate, Chief Financial Officer www.iluka.com 22 August 2014 31