Iluka Resources Limited · ASX:ILU

Iluka Resources — ZIA Conference 2017

17 slides from Iluka Resources's conference presentation, Sep 22, 2017

1. Slide 1: Zircon Market Update

   Zircon Market Update ZIA Conference Christian Barbier – General Manager Zircon Sales, ILUKA RESOURCES Bologna, 22 September 2017 1

2. 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

3. Slide 3: Outline

   Outline  Zircon Markets in 2017  Supply & Demand Balance  Commodity vs Industrial Mineral 3

4. Slide 4: Zircon Markets in 2017

   Zircon Markets in 2017 General observations:  Low overall growth over the last few years.  Ceramics continues to grow moderately.  Steel and glass overcapacity has weighed on refractories.  Global infrastructure needs.  China hasn’t hard landed.  New forecasts: light at the end of the tunnel?

5. Slide 5: Zircon Markets in 2017: Americas

   Zircon Markets in 2017 Americas:  Stable demand in North America.  Infrastructure projects.  No increase yet in Oil & Gas .  Aerospace and automotive are faring well. 5

6. Slide 6: Zircon Markets in 2017: Europe Middle East Africa

   Zircon Markets in 2017 Europe Middle East Africa:  Europe in line with seasonal trend.  Spanish and Italian ceramic markets.  Middle East demand improving.  North Africa still facing difficulties. 6

7. Slide 7: Zircon Markets in 2017: Asia-Pacific excl. China

   Zircon Markets in 2017 Asia-Pacific excl. China:  India: strong growth, infrastructure & reforms  Asean: stable but highly competitive  Japan/Korea/Taiwan: wait-and-see, positive signs 7

8. Slide 8: Zircon Markets in 2017: China

   Zircon Markets in 2017 China:  Overall stable, low level of stocks.  Real estate still positive.  Environmental closures (from North to South).  Industry consolidation. 8

9. Slide 9: Outline

   Outline  Zircon Markets in 2017  Supply & Demand Balance  Commodity vs Industrial Mineral 9

10. Slide 10: Supply & Demand Balance: Tightness has arrived

    Supply & Demand Balance Tightness has arrived Recovery in prices since 2H 2016 Downstream Reduction in producer- restocking held inventories movement Buyers can’t stock up much • No inventory build up and some demand can’t be met. Mix of denial and Iluka balances supply • However underlying demand a

11. Slide 11: Supply & Demand Balance: The change was very quick

    Supply & Demand Balance Tightness has arrived The change was very quick -USD200/mt in 1H 2016… +USD200/mt since CNY 2017 Unsustainable prices don’t last. Iluka observations 11

12. Slide 12: Supply & Demand Balance: Many were surprised

    Supply & Demand Balance Tightness has arrived The change was very quick Many were surprised 12

13. Slide 13: Outline

    Outline  Zircon Markets in 2017  Supply & Demand Balance  Commodity vs Industrial Mineral 13

14. Slide 14: The "Commodity Curse"

    Commodity vs Industrial Mineral The “Commodity Curse”  Taking advantage of the cycle.  Not focusing on product value.  Insufficient margin throughout the cycle.  Behaviour reproduces the cycle. ILUKA  prefers LT sustainable pricing based on value-in-use,  won’t engage in opportunistic pricing

15. Slide 15: Zircon is a better product… but there are lower quality substitutes

    Commodity vs Industrial Mineral Zircon is a better product… but there are lower quality substitutes  Opacity – whiteness Zr  Hardness  Low thermal expansion ALUMINA  High melting point  Thermal conductivity FELDSPAR …..  Chemically inert  Low neutron absorption KAOLIN CHROMITE S.MULLITE 15

16. Slide 16: What the industry should focus on

    Commodity vs Industrial Mineral What the industry should focus on DEVELOPING VALUE: INDUSTRIAL MINERALS:  Protects from Substitution  Technical Development  Environmental Impact  Commercial Initiative  Better rather than More  Sustainable Practices  Technology in Processing  Financial Discip

17. Slide 17: Christian Barbier, General Manager Zircon Sales

    Christian Barbier, General Manager Zircon Sales christian.barbier@iluka.com 17

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