Iluka Resources reported a solid FY 2024 with $1.13 billion in mineral sands revenue and a net profit of $231 million, while advancing key projects like Balranald and Eneabba refinery.
- Mineral sands revenue of $1.13 billion with 42% EBITDA margin
- Net profit after tax (NPAT) of $231 million and final dividend of 4 cents per share
- Balranald project on track for H2 2025 commissioning with $190 million capex in 2024
- Eneabba rare earths refinery progressing, fully funded with $1.65 billion government loan
- Stable zircon and titanium feedstock markets despite pricing pressures and inventory build
Financial Performance and Market Context
Iluka Resources (ASX:ILU) closed its 2024 financial year with mineral sands revenue of $1.13 billion and a net profit after tax of $231 million, reflecting resilience amid a challenging cost environment. The company maintained a robust mineral sands EBITDA margin of 42%, underscoring operational discipline and effective cost management despite inflationary pressures and a shift in product mix.
While zircon sand sales volumes grew, lower prices in the latter part of 2024, particularly in Q4, tempered revenue growth. Synthetic rutile sales remained steady, supported by long-term take-or-pay contracts that provide earnings stability. Iluka’s disciplined pricing approach and a favourable US dollar to Australian dollar exchange rate helped mitigate some market headwinds.
Operational Highlights and Production
Production volumes for zircon, rutile, and synthetic rutile (Z/R/SR) totaled 496 kilotonnes, down 22% from the previous year, primarily due to the SR1 kiln remaining offline and planned maintenance activities. The Cataby and Jacinth-Ambrosia mines operated at capacity, with the larger SR2 kiln running at full capacity. Iluka’s inventory levels increased, with finished goods inventory rising to approximately 300 kilotonnes, positioning the company well for anticipated restocking as market demand improves.
Strategic Project Developments
Capital expenditure reached $434 million in 2024, reflecting significant investment in growth projects. The Balranald project in New South Wales, a rutile-rich critical minerals development employing innovative underground mining technology, is progressing on schedule with $190 million spent in 2024. Earthworks and site preparation are complete, and commissioning is expected in the second half of 2025.
Meanwhile, the Eneabba rare earths refinery in Western Australia, Australia’s first fully integrated facility for separated light and heavy rare earth oxides, is advancing with $162 million capital expenditure in 2024. The project is fully funded through a $1.65 billion non-recourse loan from the Australian Government and Iluka’s equity contribution. Commissioning is targeted for 2027, with awarded contracts tracking slightly under budget and a healthy contingency allowance retained.
Market Dynamics and Sustainability
Iluka’s zircon and titanium feedstock markets remain stable, though pricing softened in late 2024 due to competitor actions and global economic factors. The company’s major customers are concentrated in North America and Europe, regions where tariffs on Chinese pigment imports have reshaped trade flows, potentially benefiting Iluka’s competitive position.
On sustainability, Iluka reported progress in safety metrics with a slight increase in total recordable injury frequency rate but maintained zero fatalities. Community engagement initiatives expanded, including a new grants program supporting 64 organisations and partnerships focused on Indigenous education. Environmental rehabilitation efforts continue, with 403 hectares of land rehabilitated in 2024, and decarbonisation projects such as a 9MW solar farm commissioned at Cataby.
Financial Position and Outlook
Iluka ended 2024 with net cash of $90 million excluding non-recourse debt, despite substantial capital investments. The company’s Multi Option Facility Agreement (MOFA) was expanded to $800 million, providing financial flexibility. Dividends remain aligned with the company’s framework, with a fully franked final dividend of 4 cents per share declared.
Looking ahead, Iluka forecasts stable production volumes for 2025 with continued capital investment in Balranald, Wimmera, and the Eneabba refinery. Market conditions remain cautiously optimistic, with the company well positioned to respond to demand recovery and evolving trade dynamics.
Bottom Line?
Iluka’s solid 2024 results and strategic project momentum set the stage for growth, but market volatility and execution risks warrant close investor attention.
Questions in the middle?
- How will Iluka manage pricing pressures amid competitor discounting and global economic uncertainties?
- What is the potential impact of the Eneabba refinery’s commissioning on Iluka’s rare earths market position?
- How might evolving trade tariffs and geopolitical tensions influence Iluka’s feedstock sales in key regions?