Iluka Resources will prioritise its Australian operations and development projects after announcing a demerger of its Sierra Leone mineral sands assets.
The miner plans to spin-out Sierra Rutile Holdings, an Iluka subsidiary, into its own ASX-listed mineral sands company, which will continue to maximise value from the Sierra Rutile project and prioritise development of the Sembehun project.
Outgoing Iluka chair Greg Martin said the demerger would free up the company to focus on its Australian interests.
“The demerger of Sierra Rutile will enhance its (Iluka’s) focus on its core activities and growth opportunities in Australia, particularly at this important juncture in its evolution and diversification into rare earths,” he said.
“The demerger will simplify Iluka’s structure and ensure management focus is on executing its attractive Australian-based growth opportunities.”
One fancied local project is Iluka’s Eneabba rare earths operation in Western Australia, which achieved a significant milestone in early April after the Iluka board approved the construction of the Eneabba rare earths refinery.
Representing phase three in Eneabba’s development timeline, Iluka completed its feasibility study for the refinery, demonstrating the venture’s strong economics and significant growth potential.
Sierra Rutile will be established with a high-quality board and management team, led by Martin, who will become the new company’s inaugural chair, with current chief executive officer Theuns de Bruyn becoming Sierra Rutile’s managing director and chief executive officer.
Sierra Rutile’s principal business activities will be the management and operation of its existing Area 1 mine, which encompasses two operations at Lanti and Gangama, along with a mineral separation plant, and a dedicated port facility.
Located 30 kilometres from Sierra Rutile, the Sembuhan project boasts one of the largest and highest-quality known rutile deposits in the world and will be another key priority of the new company.
The demerger is subject to board, regulatory and shareholder approvals. If approved, the demerger is expected to be completed at some point this year.