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Iluka Resources to Restart Jacinth-Ambrosia Zircon Mine, South Australia

Published: June 26, 2017 |

[Click image to enlarge]

The world’s largest producer of zircon Iluka Resources will restart operations at its Jacinth-Ambrosia project in December following an improvement in mineral sands market conditions.

The Jacinth-Ambrosia project in South Australia’s Eucla Basin is one of the largest zircon projects in the world and Iluka’s primary source of zircon.

It has the ability to supply 25 percent to 30 per cent of global zircon demand when it is running at peak capacity.

Iluka suspended operations there in April 2016 for an expected 18 to 24 months in a bid to improve challenging market dynamics.

“The restart of J-A reflects the continued tightening of the zircon market and follows the substantial draw down on [heavy mineral concentrate] inventory over 2017,” Managing Director Tom O’Leary said.

“The restart will ensure Iluka is able to continue to support its customer base.”

Iluka said costs of about $13 million associated with restarting production would be incurred in 2017, on top of an earlier $330 million cash production cost estimate.

It expected the restart to contribute to total zircon production of 300,000 tonnes in 2018.

Citi analyst Clarke Wilkins said the restart was “ahead of our expectations and a further vote of confidence for the supply constrained zircon market”.

The $3.4 billion Perth-based company also confirmed its mineral separation plant in Hamilton, Victoria, would be put on care and maintenance in October, resulting in about 60 redundancies.

NEW MINING METHODOLOGY

The plant had been expected to be restarted to treat HMC from Iluka’s future Balranald mine in the Murray Basin of NSW.

But Iluka said the development of a new mining methodology expected to be used at Balranald meant the mine was likely to produce less product than previously expected and it would not produce commercial quantities of HMC before 2021.

All of the HMC from Balranald could instead be processed at its West Australian plant near Geraldton, Iluka said.

“While it is possible that the Hamilton [plant] may be utilized in the future to treat HMC produced from the Murray Basin by Iluka or others, there is insufficient certainty at this time to justify carrying the book value,” Iluka said.

Iluka expected to record a pre-tax impairment of about $150 million and redundancy and restructure costs of $14 million in its accounts for the half-year ended June 30.

Iluka said in March its decision to suspend the Hamilton plant was purely a commercial one and “not the result of any policy settings or perceived prevailing economic conditions in Victoria”.

Source: (June 22, 2017) Financial Review


To stop by Iluka’s website, CLICK HERE


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