Iluka Resources posted a net loss of $288 million in 2025 amid subdued mineral sands demand but progressed key projects including the Balranald mine commissioning and Eneabba rare earths refinery construction.
- 2025 net loss of $288 million impacted by asset impairments and inventory write-downs
- Suspension of production at Cataby mine and SR2 kiln to preserve balance sheet
- Balranald mine commissioning commenced with novel mining technology
- Eneabba rare earths refinery construction over 95% complete, on track for 2027 commissioning
- Underlying mineral sands EBITDA margin at 31%, with $862 million capital expenditure focused on growth projects
A Challenging Year for Mineral Sands
Iluka Resources Limited’s 2025 financial year was marked by subdued demand in the mineral sands market, particularly affecting titanium dioxide feedstocks used in pigments. The company recorded a net loss after tax of $288 million, largely driven by a $351 million impairment of assets and a $216 million write-down of inventory to net realisable value. This reflected the ongoing weakness in global economic activity and pigment industry challenges, including customer financial distress and tariff impacts.
In response, Iluka demonstrated operational discipline by suspending production at its Cataby mine and the SR2 synthetic rutile kiln from December 2025. This strategic move aimed to conserve cash, reduce costs, and preserve balance sheet strength while positioning the company for an eventual market recovery. Despite these headwinds, zircon sales remained comparatively resilient, supported by Iluka’s differentiated market position.
Progress on Growth Projects – Balranald and Eneabba
Amid the challenging mineral sands environment, Iluka advanced two major growth projects. The Balranald mine in New South Wales commenced mining and heavy mineral concentrate production in January 2026. This project utilises a novel remotely-operated underground mining technology developed over 15 years, enabling access to high-grade ore approximately 70 metres below surface with significantly reduced environmental disturbance.
Meanwhile, the Eneabba rare earths refinery in Western Australia, Australia’s first fully integrated facility for separated rare earth oxides, reached over 95% completion by year-end. Construction milestones included extensive concrete works, equipment deliveries, and expansion of workforce accommodation. The refinery is on track for commissioning in 2027 and is expected to be a strategic national asset, capable of processing diverse feedstocks and producing both light and heavy rare earth oxides critical to clean energy and defence applications.
Financial and Operational Highlights
Iluka reported mineral sands revenue of $976 million, down 13% from the prior year, with underlying mineral sands EBITDA of $300 million and a margin of 31%. The company produced 559 kilotonnes of zircon, rutile, and synthetic rutile, a 13% increase on 2024, supported by a 61% rise in zircon-in-concentrate production. Capital expenditure totalled $862 million, primarily directed towards the Eneabba refinery ($443 million) and Balranald project ($361 million).
Net debt increased to $1.057 billion, reflecting ongoing investment in growth projects. The mineral sands business reported net debt of $473 million, while the rare earths business unit’s net debt rose to $584 million, primarily due to Eneabba refinery funding. Iluka maintained compliance with financial covenants and hedged a portion of its US dollar revenue to manage foreign exchange risk.
Sustainability, Safety, and Community Engagement
Iluka continued to prioritise sustainability and safety, achieving a reduction in its Total Recordable Injury Frequency Rate to 3.4 and receiving the 2025 Virginia Department of Energy Mineral Mine Reclamation Award for rehabilitation work in the United States. The company rehabilitated 272 hectares of land and advanced environmental initiatives, including studies on the sustainability of Carnaby’s Cockatoo and renewable energy projects at its sites.
Community engagement remained strong, with support for Indigenous employment pathways, local grants programs, and cultural heritage management. Iluka’s commitment to transparent reporting is reflected in its comprehensive sustainability disclosures aligned with the Global Reporting Initiative and Australian Sustainability Reporting Standards.
Executive Remuneration and Governance
The Board approved no fixed remuneration increases for executives in 2025, reflecting the challenging market conditions. Short-term incentive outcomes were between 48% and 55% of maximum for key executives, with awards delivered partly in cash and partly as restricted shares. The Board has revised incentive structures for 2026 to better align remuneration with strategic priorities, including the successful delivery and ramp-up of the Eneabba refinery.
Iluka’s governance framework includes rigorous risk management, with climate-related risks and opportunities integrated into strategic planning and reporting. The company uses scenario analysis to assess resilience against transition and physical climate risks, actively managing energy costs, decarbonisation challenges, and renewable energy deployment.
Bottom Line?
Iluka’s 2025 setbacks underscore the cyclical nature of mineral sands, but its strategic investments in rare earths and disciplined management position it for a sustainable recovery.
Questions in the middle?
- How will Iluka manage the ramp-up risks and market acceptance of the Eneabba rare earths refinery?
- What is the outlook for mineral sands demand recovery and pricing discipline among producers?
- How will evolving climate policies and decarbonisation technologies impact Iluka’s cost structure and asset valuations?