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Iluka gains independent approval for demerger


Iluka Resources has achieved a key milestone en route to demerging its Sierra Leone mineral sands assets after receiving the independent endorsement of Deloitte Corporate Finance.

Deloitte concluded that the demerger is in the best interests of Iluka shareholders – an important affirmation as Iluka looks to win over its investors before a vote on the demerger occurs on July 22.

The ASX-200 miner said if the demerger proceeds, its eligible shareholders would be entitled to receive one Sierra Rutile Holdings (the demerged company) share for every Iluka share held at the demerger record date, which is scheduled for July 28.

Sierra Rutile would be spun out into its own ASX-listed company, with the intention to continue maximising value from the Sierra Rutile mineral sands operation and prioritise development of the Sembehun project.

Located 30km 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.

Iluka is eager to shed Sierra Rutile so it can prioritise its Australian operations and development projects.

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.

Construction is set to commence in the second half of 2022, with first production expected in 2025.

Iluka is also represented by its Jacinth-Ambrosia operation in South Australia – home to the world’s largest zircon mine – and its Western Australian operations. Located near Geraldton, the Narngalu mineral separation plant produces final zircon and rutile products, while its Capel operations produce synthetic rutile.

Iluka’s Cataby mine, located approximately 150km north of Perth, is a large ilmenite deposit that also boasts value-added zircon and rutile.

The diversified miner recorded a 16 per cent increase in revenue for the first quarter of 2022, notching $414 million of revenue for the three months, of which $383.6 million was derived from zircon, rutile and synthetic rutile sales. In the final quarter of 2021, Iluka posted $358.3 million of revenue. 

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