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Highlights

  • Iluka Resources will suspend operations at its Cataby mine and Synthetic Rutile Kiln 2 (SR2) from 1 December 2025 due to subdued mineral sands demand.

  • Production at Cataby is expected to be paused for 12 months, while SR2 is planned to be offline for six months.

  • Despite the suspension, Iluka maintains sufficient inventories to meet customer needs and continues production at Jacinth Ambrosia and commissioning at Balranald.

Iluka Resources (ASX:ILU) announced that it will suspend production activities at its Cataby mine and Synthetic Rutile Kiln 2 (SR2) in Western Australia effective 1 December 2025. The decision comes in response to subdued demand for mineral sands and related downstream products, particularly pigment, as weaker global economic conditions continue to influence purchasing behaviour and customer demand forecasts.

Cataby’s primary mineral output is chloride ilmenite, which is processed at SR2 into synthetic rutile, a high-grade titanium dioxide feedstock predominantly used in pigment production.

Inventory and Supply Position

Iluka confirmed it holds adequate inventories of both synthetic rutile (finished product) and chloride ilmenite (work-in-progress) to continue meeting customer supply requirements during the suspension.

Operations at SR2 are expected to be offline for around six months, while activities at Cataby are planned to be paused for approximately 12 months. Both operations will be restarted when market conditions improve.

Other Operations Continue

The company highlighted that production at its Jacinth Ambrosia mine in South Australia remains unaffected. In addition, commissioning activities at its Balranald mine in New South Wales are progressing, with mining scheduled to begin in the fourth quarter of 2025. These mines produce a different mix of products compared to Cataby, supporting ongoing supply to customers across markets.

Management Commentary

Iluka’s Managing Director noted that suspending production at Cataby and SR2 is a prudent step in the current environment of demand uncertainty. The move enables inventory management, cost savings, and cash flow preservation while maintaining flexibility to restart production when required.

The company stated that it remains well positioned to respond quickly to any recovery in demand conditions, with Cataby and SR2 ready to restart once market conditions warrant.

Market Reaction

Following the announcement, Iluka’s share price fell by nearly 13% to AUD 5.63 per share during trading hours on 10 September.