Iluka Resources reported a strong finish to 2025 with record zircon and rutile production, while advancing its Eneabba rare earth refinery and navigating softer zircon prices amid cautious 2026 guidance.
- Full year 2025 zircon/rutile/synthetic rutile production reached 559kt, exceeding guidance
- Q4 production rose despite idling synthetic rutile kiln SR2 from December
- Unit cash costs for 2025 came in below guidance at $1,054 per tonne
- Eneabba rare earth refinery construction progressed with $865 million spent to date
- Balranald mining commenced with extraction rates meeting targets
Strong Production Performance in 2025
Iluka Resources closed out 2025 with a notable increase in zircon, rutile, and synthetic rutile production, delivering a full-year total of 559,000 tonnes. This figure surpassed prior guidance, driven in part by optimised processing of zircon-in-concentrate (ZIC) material across its Western Australian facilities. Despite the idling of the synthetic rutile kiln SR2 from 1 December, fourth-quarter production rose to 155,000 tonnes, reflecting operational resilience and effective resource management.
Sales volumes for zircon sand and synthetic rutile also showed strength, with zircon sand sales reaching 165,000 tonnes for the year and synthetic rutile sales at 136,000 tonnes. However, the weighted average price for zircon sand softened in the final quarter, particularly in China, where premium zircon prices declined due to competitive discounting. Iluka has contracted 35,000 tonnes of zircon sand sales for the first quarter of 2026 at prices consistent with Q4 2025, indicating cautious market sentiment.
Cost Efficiency and Capital Investment
Iluka’s unit cash costs of production for zircon, rutile, and synthetic rutile were $1,054 per tonne in 2025, below the company’s guidance. This was largely attributed to higher-than-expected zircon-in-concentrate production, which helped offset costs. A comprehensive cost review in the fourth quarter led to the rationalisation of approximately 120 roles, delivering anticipated savings of around $36 million in 2026.
Capital expenditure remained robust, with $862 million invested across mineral sands and rare earths projects. Notably, $865 million has been spent on the Eneabba rare earth refinery in Western Australia, where construction has advanced significantly. Concrete installation progressed well, mechanical equipment and pipe racks are being installed, and the workforce expanded to over 400 personnel by December 2025. The refinery is on track for commissioning in 2027, positioning Iluka as a key player in the rare earths market outside China.
Project Developments and Market Outlook
Mining operations at Balranald in New South Wales commenced in January 2026, with extraction rates meeting or exceeding nameplate capacity. The project utilises innovative underground mining technology and is expected to ramp up steadily through the first half of the year. Meanwhile, the Wimmera project in Victoria is progressing through its definitive feasibility study, with successful zircon flowsheet testing and positive customer feedback on product suitability.
Market conditions remain subdued amid ongoing macroeconomic uncertainty, with demand for mineral sands products influenced by cautious customer buying behaviour and softer pricing, especially in China. Iluka’s 2026 production outlook assumes continued idling of SR2 and Cataby operations, with flexibility to restart synthetic rutile production if market conditions improve. The company remains well positioned to respond to potential demand upticks, particularly from Northern Hemisphere housing markets and supply chain disruptions.
In the rare earths sector, Iluka continues to advance offtake discussions alongside Eneabba refinery development. The geopolitical focus on supply chain diversification and strategic mineral independence supports a favourable long-term outlook for rare earths, reinforcing Iluka’s investment in this emerging market.
Bottom Line?
Iluka’s 2025 results and project progress set a solid foundation, but 2026’s softer market and cautious demand signal a year for strategic agility.
Questions in the middle?
- How quickly might Iluka restart synthetic rutile kiln SR2 if market conditions improve?
- What impact will softer zircon prices in China have on Iluka’s revenue and margins in 2026?
- How will Eneabba refinery commissioning timelines and rare earths offtake agreements evolve amid global supply chain shifts?