Iluka posts earnings hit as govt funding talks continue
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The news: Mineral sands miner Iluka Resources reported a hit to first-half earnings, while production and sales grew quarter on quarter, as talks with the Australian government continue over the funding of its $1.7 billion rare earths refinery.
The numbers: Iluka produced 142,000 tonnes of zircon, rutile and synthetic rutile during the June quarter, 38% lower than the prior corresponding period but 64% higher than in the previous quarter. Q2 sales of 137,000 tonnes were 13% lower year on year, but represented a 29% rise quarter on quarter.
Overall, production in the first half was down 37.8% compared to the prior corresponding period, and sales were 12.9% lower.
Elsewhere, Iluka said it discussions with the government continue in relation to funding arrangements for the building of Australia's first fully integrated refinery for the production of separated rare earth oxides at Eneabba, Western Australia, with capital guidance for the project at $1.7 billion to $1.8 billion.
Iluka shares last closed at $6.16, down more than 40% over the last year, as a decline in lithium prices and weaker demand for commodities such as zircon and rutile have weighed on earnings.
The context: Iluka said that underlying demand for zircon is likely to vary by region and end-use in the second half, as customers remain alert to the evolving economic and political landscapes. The company said it expects the traditional seasonal weakness of Q4 to weigh on purchasing patterns in the second half, with zircon prices to be broadly flat in Q3.
The source: ASX announcement
