Iluka Resources shuts WA mines but rare earths project continues
Iluka Resources is mothballing a large part of its mineral sands operations but will push ahead with a rare earths project as it embarks on an investor roadshow.
Iluka Resources is mothballing a large part of its mineral sands operations, including a processing plant, but will push ahead with a rare earths project backed by taxpayers to the tune of $1.65bn.
The miner is shutting down its Cataby mine and its synthetic rutile kiln at Capel. Both assets are in WA and Iluka said the suspension of operations was temporary and stemmed from oversupply out of China and weak market conditions.
Iluka will halt operations at what is known as kiln 2 at Capel from December 1. The smaller Kiln 1 at Capel has been in mothballs since late 2023.
The news sent Iluka’s share price plunging 14.2 per cent to $5.55 on Wednesday as the company started an investor roadshow.
Chief executive Tom O’Leary said there were no plans to stand down any of about 160 workers at Capel and that Iluka hoped to re-start kiln 2 after about six months if the market for synthetic rutile improved.
Iluka plans to shut the Cataby mine, which employs about 130 workers, for about a year and will look at re-deploying some of the workforce.
The mine is about 100km south of where Iluka is pushing ahead with building Australia’s first fully integrated rare earths refinery after a stand-off with the Albanese government in 2024 that ended when it secured additional funding support last December.
Iluka plans to feed the refinery from stockpiles of monazite-rich tailings left over from mineral sands mining in WA and recently signed a deal with Lindian Resources to source rare earths from a project in the African nation of Malawi.
Mr O’Leary, a fierce critic of China over price and supply manipulation in rare earths, said Iluka’s core mineral sands business had also suffered at the hands of Beijing.
“A key development in the pigment industry over the last decade has been the over capacity established in China,” he said on Wednesday.
“In recent months, we estimate around 20 small to mid-sized pigment plants, around 500,000 tonnes per annum capacity, have been put into care and maintenance and exports of pigment from China have declined around 10-15 per cent when compared to the same time last year.
“The rest of the world response to that over capacity has included anti-dumping duties targeting Chinese imports and the closure of some pigment plants, both of which have occurred against a backdrop of low demand.”
The mineral sands products made by Iluka are vital in some manufacturing but mostly used in the ceramics and paint industries.
The company said the closure at Cataby and Capel were in response to subdued demand for mineral sands and their associated downstream products, particularly pigment. Synthetic rutile is a high-grade titanium dioxide product used predominantly as a feedstock to make pigment.
Iluka plans to continue production at its Jacinth Ambrosia mine in South Australia and with commissioning of a new mine at Balranald in NSW.
Mr O’Leary said Iluka could satisfy customer demand for synthetic rutile and chloride ilmenite from stockpiles at Capel.
To join the conversation, please log in. Don't have an account? Register
Join the conversation, you are commenting as Logout