PERTH (miningweekly.com) – Mineral sands miner Iluka has reported a 30% increase in revenue for the half-year to June, compared with the previous corresponding period, with underlying group earnings before interest, taxes, depreciation and amortisation (Ebitda) increasing by 70.5%.

Iluka on Wednesday reported that mineral sands revenue during the first half of the 2022 financial year reached $954.9-million, up from the $735.6-million reported in the first half of 2021, while underlying Ebitda was up from $308.2-million to $525.5-million.

Net profits after tax for the half-year were up 185.7%, from $129-million to $368.5-million, while operating cash flows increased 57%, from $306.4-million to $481.1-million.

Total zircon, rutile and synthetic rutile production for the half-year was up by 22.6%, to 368 800 t, while total mineral sands production was up 17% to 657 800 t.

MD Tom O’Leary told shareholders that Iluka had delivered strong outcomes in the first half, both in terms of financial performance and progress on its strategic priorities.

“In a macroeconomic environment characterised by inflation and uncertainty, we increased margins and strengthened our balance sheet. This was the result of strong demand for Iluka’s products, industry supply constraints and resultant pricing traction.

“At the same time, we passed a key milestone in our final investment decision for Australia’s first fully integrated rare earths refinery at Eneabba. This confirmed a long-planned, substantial diversification for Iluka, funded via a risk-sharing partnership with the Australian government. Eneabba positions the company at the forefront of the global shift to electrification and a low carbon economy.”

At a cost of between A$1-billion and A$1.2-billion, the refinery will have a 17 500 t/y total rare earth oxide capacity, and will employ about 300 people during construction and around 270 during its operations.

Construction is slated to start in the second half of this year, and first production is expected in 2025.

Eneabba is the highest grade rare earths operation globally and currently consists of Iluka’s stockpile of the rare earth-bearing minerals monazite and xenotime, as well as the company’s Phase 1 screening and Phase 2 concentrating plant.

Phase 3 will build on this existing operation to deliver a significant downstream infrastructure asset comprising roasting, leaching, purification, solvent extraction and product finishing. The refinery will be fed initially from the Eneabba stockpile.

Meanwhile, O’Leary pointed out that during the interim period under review, Iluka also completed the demerger of Sierra Rutile, which enables the company to focus on delivering its rare earths diversification and broader mineral sands project pipeline in Australia.

Shareholders in July approved the demerger of the assets in Sierra Leone, which include the Area 1 and Sembehun projects.

“Supply-side dynamics remained the dominant feature of mineral sands markets. For both zircon and high-grade titanium feedstocks, scarcity has been exacerbated by the war in Ukraine and challenges in South Africa, with little by way of new production coming online. Global inventories of these products are low,” O’Leary said.

“In these circumstances, customers are prioritising security of supply; and Iluka is well placed. Our Australian operations are configured at maximum settings and sales over the second half are likely to continue to be constrained by production. Furthermore, the second half will see first production from the restart of Synthetic Rutile Kiln 1 at Capel.

“Other approaching development milestones include the commencement of groundworks for the Eneabba rare earths refinery, the completion of the definitive feasibility study for the Balranald project, and the completion of preliminary feasibility studies for the Wimmera and Atacama projects.”