Iluka Resources Pauses Synthetic Rutile Production Amid Uncertain Economic Outlook

Iluka Resources, a leading mineral sands company, has announced its decision to halt production of synthetic rutile for a period of four months. The pause in production comes as the company grapples with an uncertain global economic outlook and a decline in commodities demand.

The suspension will affect the SR1 operation, which will be offline from the end of September to the end of January. This timeframe coincides with planned maintenance at another operation known as SR2. By implementing this production pause, Iluka Resources expects to save approximately AUD 4.0 million (USD 2.6 million) in external costs, according to the company's Managing Director, Tom O'Leary.

O'Leary emphasized that Iluka Resources has demonstrated its ability to adapt to market conditions, stating, "Restarted in December 2022, SR1 is unique in the mineral sands industry as a premium swing production asset for high-grade titanium feedstocks."

In addition to the announcement regarding the production pause, Iluka Resources reported a net profit of AUD 203.8 million for the six months ending in June, marking a year-on-year decline of 44%. The company achieved an impressive earnings before interest, tax, depreciation, and amortization margin of 50% during this half-year period.

As part of its financial results announcement, the company's directors declared an interim dividend of 3 Australian cents per share.

O'Leary acknowledged the challenges faced by Iluka Resources in the current global economic climate, stating, "Iluka delivered increased prices and strong margins in the first half against a backdrop of evolving market dynamics." However, he noted that "global macroeconomic uncertainty is leading to more subdued levels of demand for mineral commodities, including Iluka's products, relative to the immediate years post Covid-19."