Highlights:

  • Iluka’s FY25 mineral sands impairment estimated at AUD 350 million pre-tax.
  • Inventory adjustments reduce values by approximately AUD 215 million pre-tax.
  • WIM100 Mineral Resource in Victoria sees a 19% increase in heavy mineral tonnage.

Iluka Resources Limited (ASX:ILU) experienced a 14% decline in its share price today (29 January 2026) following the announcement of substantial accounting adjustments for its 2025 financial year. The company cited a large non-cash impairment in its mineral sands operations alongside reductions to inventory values. These developments coincide with production suspensions at key facilities and are affecting investor sentiment.

ILU’s share underperforms mining index which recorded 0.43% rise at the time of writing on 29 January 2026.

Mineral Sands Impairment Drives Market Reaction

Iluka expects a non-cash impairment charge of approximately AUD 350 million pre-tax in its FY25 financial results. The majority of this charge is linked to the Cataby mine and synthetic rutile kilns 1 and 2, as well as associated project study costs in Western Australia. The production suspension at Cataby and SR2, effective from December 1, 2025, was implemented in response to continued weak demand for mineral sands and downstream products such as pigment.

The company also plans to reduce Cataby’s remaining Ore Reserve by roughly 35%, representing a 7% decrease in total Group Ore Reserves. Cataby’s revised mine life is now expected to be four years following any potential resumption of mining operations.

Inventory Valuation Adjustments

Alongside the impairment, Iluka will recognise a net realisable value (NRV) adjustment to inventory of around AUD 215 million pre-tax. This reflects the impact of lower price expectations on certain product inventories, particularly Cataby ore and heavy mineral concentrate work-in-progress items. After the adjustment, Iluka’s total inventory balance stands at approximately AUD 1.1 billion, with finished goods accounting for about AUD 600 million.

FY25 Financial Overview

Iluka’s total exceptional charges for FY25 are projected at roughly AUD 565 million pre-tax. Despite this, the company anticipates underlying mineral sands EBITDA to reach around AUD 300 million, before factoring in the exceptional items. Full-year mineral sands revenue was reported at AUD 976 million, with fourth-quarter revenue contributing AUD 276 million. Capital expenditure for growth projects, including Balranald and Eneabba, reached AUD 862 million.

The company’s net debt positions were AUD 473 million for mineral sands and AUD 584 million for rare earths, with total commercial debt facilities of AUD 800 million and export finance facilities of AUD 610 million drawn, including capitalised interest.

Resource Expansion Efforts Continue

Iluka also provided an update on the WIM100 deposit in western Victoria, reporting a 19% increase in total heavy mineral tonnage to 25 million tonnes. This deposit is part of the Wimmera project, which is under a definitive feasibility study for rare earths and zircon supply. The Eneabba refinery, expected to commission in 2027, will process rare earth feedstocks from WIM100 and other sources.