Iluka Resources is capitalising on a fertile mineral sands market after recording a 16 per cent increase in revenue for the first quarter of 2022.
The ASX-200 miner notched $414 million of revenue for the three months, of which $383.6 million was derived from zircon, rutile and synthetic rutile (Z/R/SR) sales.
Iluka sold approximately 188,800 tonnes of Z/R/SR in the quarter, which was down from the circa 192,300 tonnes sold in the first quarter of 2021.
Despite this, revenue was significantly higher, highlighting the strong mineral sands market where spot prices for rutile and synthetic rutile are both at 10-year highs.
As of April 1, Iluka increased the price of its zircon product by $US100 per tonne and has all second quarter 2022 sales contracted, solidifying the company’s market position.
The diversified miner said minerals sands demand was strong despite uncertainties created by the Russia-Ukraine conflict and COVID-induced lockdowns in China.
“China’s production of tiles (with which zircon is used) increased after the Chinese New Year despite raw material and energy inflationary pressures,” the company said in its quarterly report.
“Towards the end of the quarter, supply chain disruptions resulting from recent COVID outbreaks began to impact industrial productivity.
“In Europe, elevated gas prices have forced some smaller tile and frit makers to reduce production. Larger companies with the ability to pass cost increases through to customers have maintained production levels.”
Iluka said bulk exports of ilmenite for pigment manufacture and rutile used in welding consumables had also been significantly impacted.
“Ukrainian producers in aggregate comprise the largest source of rutile to the global welding market,” the company stated.
“The production and export of titanium metal has also been impacted. A continuation of disruption to mining and processing of titanium feedstock and finished goods will further constrain supply into what is already a tight market.”
In early April, Iluka was given board approval to construct its Eneabba rare earths refinery in Western Australia after the company achieved two key milestones associated with the project.
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.
Construction is set to commence in the second half of 2022, with first production expected in 2025.