Iluka approves the development of the Cataby mineral sands, Western Australia

Posted by Daniel Gleeson on 14th December 2017

Iluka Resources Ltd has approved the development of the Cataby mineral sands deposit in Western Australia. Iluka’s Board approved the development after the company entered into take-or-pay offtake agreements for a minimum of 175,000 t/y of synthetic rutile, or approximately 85% of the production capacity from Iluka’s Synthetic Rutile kiln 2 (SR2).

  • Cataby mineral sands project approved; with offtake agreements secured for 85% of Iluka’s synthetic rutile production, for a minimum of four years
  • Project ensures continued production from SR2 at Capel, Western Australia
  • Estimated construction cost of A$250-$275 million, unchanged from previous forecasts
  • Construction workforce for Cataby to peak at 250 people; operations workforce of ~160 full time employees; Iluka’s processing operations at Capel currently employ ~160 people
  • Construction period of 18 months, first production expected in Q2 2019
  • Average annual production of ~200,000 t/y synthetic rutile, ~50,000 t/y zircon and ~30,000 t/y rutile
  • 8.5 year mine life, with possibility to extend a further four years, subject to accessing additional 40 Mt of ore in the reserve.

Cataby is a large chloride ilmenite deposit located approximately 150 km north of Perth in the Shire of Dandaragan.

Iluka’s Managing Director Tom O’Leary said “Iluka has worked closely with customers to secure offtake agreements for a significant proportion of the synthetic rutile production associated with the Cataby project. Entering into these agreements serves to underpin returns from the project and is consistent with Iluka’s disciplined approach to the allocation of capital and our objective to create and deliver shareholder value.

“The project ensures that our customers will have continuity of synthetic rutile supply; and also delivers significant economic benefits to two separate regions in Western Australia – Dandaragan and Capel.

“Pre-execute contracts have been awarded and tendering for the balance of construction contracts is well advanced. First production from Cataby is expected by June 2019.