Iluka Reports $231M NPAT with $1.65B Eneabba Refinery Funding Secured
Iluka Resources reported a 32% drop in net profit after tax to $231 million for 2024, while securing critical funding for its Eneabba rare earths refinery and progressing the Balranald mine development.
- 2024 net profit after tax down 32% to $231 million
- Mineral sands revenue declined 8.9% to $1.13 billion
- Eneabba rare earths refinery funding expanded to $1.65 billion via Australian Government non-recourse loan
- Balranald mine construction on track for H2 2025 commissioning
- Sustainability focus with 403 hectares rehabilitated and net zero ambition by 2050
Financial Performance and Market Context
Iluka Resources Limited closed 2024 with a net profit after tax (NPAT) of $231 million, marking a 32% decline from the previous year. Mineral sands revenue fell by nearly 9% to $1.13 billion, reflecting subdued global demand and operational challenges. Zircon production notably dropped by over 30%, influenced by grade declines and strategic operational adjustments.
Despite these headwinds, Iluka maintained a disciplined approach to cost management and pricing, achieving an underlying mineral sands EBITDA margin of 42%. The company’s net debt position stood at $115 million, reflecting ongoing capital investments in growth projects.
Strategic Project Developments: Eneabba and Balranald
2024 was a pivotal year for Iluka’s strategic pivot into rare earths, with the Eneabba rare earths refinery project advancing significantly. The Australian Government expanded its non-recourse loan facility to $1.65 billion, underpinning the refinery’s construction and commissioning, expected in 2027. This facility represents one of the largest government investments in a critical minerals project globally and positions Iluka as a key player in diversifying global rare earth supply chains beyond China.
Parallel to Eneabba, the Balranald project in New South Wales progressed on schedule, with construction of the mine, processing plant, and supporting infrastructure well underway. Balranald is set to deploy innovative underground mining technology to access high-grade deposits previously uneconomic to mine. Commissioning is targeted for the second half of 2025, promising to restore Iluka’s leadership in natural rutile production and support the rare earths refinery feedstock.
Operational Highlights and Market Dynamics
Iluka’s mineral sands operations, including the Cataby and Jacinth-Ambrosia mines, continued to operate at capacity, optimizing unit costs amid challenging market conditions. Synthetic rutile sales remained steady under take-or-pay contracts, though the SR1 kiln remained offline due to subdued demand. Zircon prices softened in the latter half of the year, pressured by competition from Chinese domestic production and competitor pricing strategies, yet premium-grade zircon maintained relative resilience.
Geopolitical fragmentation and trade uncertainties have intensified the imperative for supply chain resilience in critical minerals. Iluka’s rare earths refinery and mineral sands pipeline are strategically aligned to meet this demand, particularly for neodymium, praseodymium, dysprosium, and terbium, essential for electric vehicles, renewable energy, and defense applications.
Sustainability and Governance
Iluka reinforced its commitment to sustainability with 403 hectares of land rehabilitated in 2024, including a carbon offset project converting agricultural land into biodiverse forest. The company’s safety performance saw mixed results, with a slight increase in total recordable injury frequency rate, prompting targeted safety initiatives for 2025.
Climate change remains a core focus, with Iluka aiming for net zero emissions by 2050. The company is actively pursuing decarbonization through energy efficiency, renewable energy projects such as the 9MW solar farm at Cataby, and innovative technologies including hydrogen-based synthetic rutile production.
Governance changes included the retirement of Chairman Rob Cole and Non-Executive Director Marcelo Bastos, with Andrea Sutton appointed Acting Chair and Peter Smith joining the Board mid-year, bringing extensive industry experience.
Executive Remuneration and Shareholder Returns
Reflecting the subdued market environment, Iluka’s executive remuneration framework remained unchanged, with no fixed pay increases in 2024. Short-term incentive outcomes were adjusted downward by the Board to align with shareholder experience, resulting in below-target financial scores. The company declared a fully franked final dividend of 4 cents per share, consistent with the interim dividend, maintaining a shareholder-friendly payout policy despite earnings pressures.
Iluka’s balance sheet remains robust, supporting ongoing capital expenditure of $434 million, primarily directed at Eneabba and Balranald projects, and sustaining operations. The company’s strategic focus on critical minerals and rare earths positions it well for the evolving global energy transition and supply chain diversification trends.
Bottom Line?
Iluka’s 2025 will be defined by the successful commissioning of Balranald and progress at Eneabba, setting the stage for a new era in critical minerals supply.
Questions in the middle?
- Will Iluka’s rare earths refinery meet its 2027 commissioning target amid global supply chain challenges?
- How will evolving geopolitical tensions and trade policies impact Iluka’s market access and pricing power?
- What are the prospects for restarting the SR1 kiln in synthetic rutile production as market conditions evolve?
