Iluka Resources Limited · ASX:ILU
Iluka Resources — Non-Deal Roadshow (June 2005)
33 slides from Iluka Resources's roadshow presentation, June 2005
Slide 1: Asian Investor Roadshow Presentation
Iluka Resources Limited Asian Investor Roadshow Presentation June 2005
Slide 2: Iluka Resources Limited
Iluka Resources Limited 4 World’s largest specialist mineral sands producer 4 existing operations located in Australia and the USA 4 long-term mineral reserves and resources 4 Market leader in key high-value mineral sands products 4 Strategy focused on maximising value from existing assets and growi
Slide 3: Iluka's Operations and Development Opportunities
Iluka’s Operations and Development Opportunities Virginia Florida/Georgia Mining area- area-c CRL Mid West South West Coal Interests Eucla Basin Murray Basin mineral sands operations coal mining interest mineral sands developments Mining area- area-c royalty
Slide 4: Key Mineral Sands Products and Uses
Key Mineral Sands Products and Uses TiO2 Uses Zircon Uses 4 Ilmenite: 35% to 65% TiO2 3% 2% 6% 6% 4 Rutile: 9% 92% to 96% TiO2 10% 4 Leucoxene: 95% 65% to 91%+ TiO2 12% 57% 4 Synthetic rutile: Pigment Ceramics Refractory upgraded ilmenite Metal Foundry (iron removed) Zirconia Chemicals 87% to 95% Ti
Slide 5: 2004 Market Share - Titanium Feedstock
2004 Market Share - Titanium Feedstock Total TiO2 Feedstock Chloride Feedstock Ticor 15% Ticor RBM Other 5% Other 21% 25% RBM 47% QIT 13% 8% Iluka 30% QIT Sulphate Feedstock 14% Other 46% Iluka 21% RBM China 3% 10% 4 Second largest producer after Tinfos 7% combined Rio Tinto’s stake in QIT 20% IRE I
Slide 6: 2004 Market share - Very High Grade Titanium Feedstock
2004 Market share - Very High Grade Titanium Feedstock Rutile Synthetic Rutile Other 14% Other 29% Iluka 39% Tiwest 26% Iluka Namakwa 60% 6% Tiwest 9% RBM 17% 2004 Estimate based on TiO2 units
Slide 7: 2004 Market Share - Zircon
2004 Market Share - Zircon Namakwa Ticor 10% 11% DuPont 5% RBM 20% Others 16% Iluka 38%
Slide 8: Maximising the value of the Existing Business
Maximising the value of the Existing Business
Slide 9: Cost Savings and Productivity Improvements
Cost Savings and Productivity Improvements 4 Company Company--wide business improvement program implemented in late 2002 4 Substantial cost savings and productivity improvements achieved 4 Key areas include 4higher throughputs 4higher mineral recoveries 4lower raw material costs 4more efficient use
Slide 10: Western Australian Operations
Western Australian Operations 4 Approximately 50kt p.a. of additional SR capacity progressively added 4 Two new mines coming on- on-stream in mid- mid-2005 SR Production 550,000 500,000 450,000 400,000 350,000 k tonnes 300,000 250,000 200,000 150,000 100,000 50,000 0 02 03 04 05f
Slide 11: USA Operations
USA Operations Business turned around and profitable again 4 Mining in Florida upgraded and successful new investment in Georgia Georgia 4 Virginia capacity increased by almost 33% in the last 18 months USA Production 500,000 400,000 300,000 k tonnes 200,000 100,000 0 02 03 04 Ilmenite R&Z
Slide 12: CRL Operations
CRL Operations 4 Successful upgrade to Ibis dredge (on time, lower than budgetted) 4 Transition to new ore body (Enterprise) well underway 4 Supplementary dry mining introduced successfully
Slide 13: Increasing Contribution from Diversified Assets
Increasing Contribution from Diversified Assets Mining area-C 4 1.25% royalty on FOB sales plus a one-off payment of A$1 million for every 1 mt increase in production > 5 mt 4 Area-C owned by BHPB (85%), Itochu (8%) and Mitsui (7%). BHPB are targeting 20 mt/year in 2005 Coal 4 50% interest in Narama
Slide 14: Mineral Sands Market Outlook
Mineral Sands Market Outlook
Slide 15: Iluka Marketing Strategy
Iluka Marketing Strategy 4 Strategy is to differentiate by supplying customer preferred high quality products with excellent customer service 4 For titanium minerals, profitable growth focus is based on very high grade (90%+ TiO2) chloride feedstocks (SR & Rutile) with chloride ilmenite also a key p
Slide 16: Titanium Minerals Market Overview
Titanium Minerals Market Overview Pigment Demand 7,000 4 Strong demand continues in pigment, titanium metal and 6,000 welding industries Production ('000 tonnes) 5,000 4 China emerging as important market for feedstock and 4,000 pigment producers 3,000 4 Pigment producer’s profitability improving 2,
Slide 17: Titanium Minerals Outlook
Titanium Minerals Outlook Chloride TiO2 Feedstock Supply 4 Excess chloride feedstock TiO2 capacity is primarily: Units (kt) 5,000 4 chloride slag and 4,000 4 chloride ilmenite from 3,000 new projects 4 Demand for Iluka’s 2,000 products very positive 1,000 4 fully sold for all products in 2005 2005 2
Slide 18: Zircon Market Overview
Zircon Market Overview Iluka Zircon Production 4 Market was in under supply in 450 2004 by approximately 60 - 80,000 tonnes 400 4 Significant US$ price increases achieved 350 4 approx US$100/tonne in '000 tonnes 2004 300 4 slightly higher than US$100/tonne in 2005 250 4 Iluka - only producer to incr
Slide 19: Zircon Market Outlook
Zircon Market Outlook 1,600 600 4 Market remains tight in 500 2005 driven mostly by 1,400 supply side constraints. Supply & demand ('000s tonnes) 400 1,200 Surplus / deficit ('000s tonnes) 300 4 Continuing tight market 1,000 dynamics forecast 200 800 100 4 Modest demand growth 600 0 (3% pa) will out
Slide 20: Growth Opportunities
Growth Opportunities
Slide 21: Growth Opportunities - Development Pipeline
Growth Opportunities Development Pipeline Committed Murray Basin projects Wagerup Douglas & Gingin Project mines A$270m WA Iron New Projects A$63m Project/s to be approved 2005 2006 2007 2008 Beyond KWR Euston Project Project Eucla Basin New Gen SR Northern Northern Zircon Project Murray Murray Proj
Slide 22: Murray Basin Rutile and Zircon
Murray Basin Rutile and Zircon 4 Development plans based on high- high -value rutile and zircon (R & Z) 4 Construction of the Douglas project well advanced 4 Dry plant and infrastructure being built to accommodate other Iluka developments 4 Two additional R & Z projects being progressed in the north
Slide 23: Murray Basin Rutile and Zircon – Douglas Project
Murray Basin Rutile and Zircon – Douglas Project 4 Douglas project 55% complete at the end of May 4 Mining on schedule - ore body exposed 4 EPC construction schedule 4 HMC production August 2005 4 Finished product March 2006 4 Budget of $270 million unchanged
Slide 24: Murray Basin Rutile and Zircon – KWR/Euston Projects
Murray Basin Rutile and Zircon – KWR/Euston Projects 4 Northern Murray Basin projects (KWR and Euston) are being actively actively pursued 4 Test mining work well advanced 4 Either or both projects could come on line H2 2007, final order and timing to be determined 4 Region remains highly prospectiv
Slide 25: Exploration Success - Eucla Basin
Exploration Success - Eucla Basin Eucla Basin Exploration Western Australia South Australia Gas 4 60,000 sq km of granted Coal Fields Fields tenements/tenement Coober Pedy applications Challenger Beverley Olympic Dam Transcontinental Railway 4 28,818 metres drilled in 2004 Eyre Highway Woomera Mt Gu
Slide 26: Eucla Basin Zircon Project
Eucla Basin Zircon Project 4 In In--ground value of zircon Zircon Market Opportunity discoveries to date >A$3 1,600 billion 1,500 Eucla Basin 1,400 opportunity 4 Range of development 1,300 '000s tonnes 1,200 options being evaluated 1,100 1,000 4 Unique opportunity to 900 de--couple zircon from de 80
Slide 27: WA Iron Project
WA Iron Project 4 Committed to a preliminary feasibility study into producing pig iron from iron oxide 4 Opportunity exists for 4 2 iron plants, each capable of producing 150 kt of pig iron/yr 4 first plant operating by late 2007, subject to regulatory approvals approvals 4 Feed source availability
Slide 28: NewGenSR Project
NewGenSR Project 4 Very high grade (95% +TiO2) SR produced from a wide range of ilmenties 4 Project development continues 4 PFS in progress with major review in H2 2005 4 Current focus on: 4 site selection 4 capital optimisation 4 commercialisation of potential by product streams 4 overall optimisat
Slide 29: Appendices
Appendices
Slide 30: Production & Sales Profile
Production & Sales Profile Product – k tonnes 2004 2003 Rutile production 149 142 Rutile sales 151 168 SR production 496 472 SR sales 481 467 Ilmenite production 1,451 1,451 Ilmenite sales 741 740 Zircon production 428 406 Zircon sales 424 409 Leucoxene/Hyti 12 14 production Leucoxene/Hyti sales 63
Slide 31: Financial Performance (Aust GAAP)
Financial Performance (Aust GAAP) Consolidated 2004 2003 Sales Revenue (A$m) 820 786 Cashflow operating cashflow (A$m) 232 178 cashflow per share (A$) 0.99 0.77 Profitability EBITDA (A$m) 263.0 214.7 EBITDA/Sales (%) 32.1 27.3 EBIT (A$m) 150.2 99.1 PBT (A$m) 118.0 90.8 NPAT (A$m) 89.3 85.2 EPS (cent
Slide 32: Financial Performance cont'd (Aust GAAP)
Financial Performance cont’d (Aust GAAP) Consolidated 2004 2003 Gearing and interest cover gearing (%) 29.0 28.7 interest cover (times) 11.0 9.8 Dividend final dividend (cents) 12 12 total dividend (cents) 22 22 payout ratio (%) 57 60 franking (%) 67 42
Slide 33: Hedge Position as at 1/1/2005
Hedge Position as at 1/1/2005 2005 2006 2007 2008 Iluka 100.0 67.0 71.0 - Hedged US$ Average cash rate 0.5917 0.5779 0.5804 - CRL 35.5 22.0 6.5 6.5 Hedged US$ Average cash rate 0.6095 0.6695 0.6494 0.6494 Total Hedged 135.5 89.0 77.5 6.5 Group Group Average 0.5963 0.5981 0.5856 0.6494 cash rate