Iluka Resources saw a sharp improvement in second quarter sales of its mineral sands products.
The company, the world’s biggest zircon producer, said second-quarter mineral sands sales jumped a massive 85% as demand soared from Asia, Europe and North America.
The news continues the positive sentiment towards the shares in the market.
Iluka shares rose 6c to $5.41 yesterday.
That’s the highest they have been since early 2007.
The sharp rise in sales saw revenue from sales before hedging, total $229 million in the half, up from the very depressed $124 million a year ago.
Sales revenue for the June quarter post hedging was $227.8 million, up 96% on the equivalent period a year earlier.
For the June half year, the company said mineral sands sales revenue (before hedging) was $378.4 million, up 94% from the first six months of 2009 ($195.2 million).
"Cash costs of production for the first six months of 2010 were $265.0 million,’ Iluka said.
"This excludes restructuring costs, previously advised as expected to be between $10 million to $15 million for the full year, associated with the idling of Western Australian mining operations."
The Perth-based company said in the June quarter and half year production report released yesterday, that zircon production jumped 55% to 104,700 tonnes. Rutile production rose 87%, but total upgradeable ilmenite production fell 69%, while synthetic rutile fell 12%.
“Sales volumes in the first half of 2010 have recovered from the historic low levels experienced in the first half of 2009,” Iluka said.
“Demand recovery for zircon in 2010 reflects a rebound in demand in China to pre-global economic crisis levels, a recovery in European demand and robust North American demand.
Demand for high grade titanium dioxide products has also recovered.”
Total mineral sands production for the three months to June 30 was 418,200 tonnes, down 9.6% from the same quarter of 2009, but up 13% from the March quarter of this year.
Iluka said rutile production was down due to the closure of its Western Australia mining operations in 2009 and a lower proportion of ilmenite produced from the Murray Basin operations suitable for sale.
The company said constrained supply of both zircon and high grade titanium dioxide production was expected to exert a significant influence on the market.
"Zircon sales year-to-date of 205.4 thousand tonnes exceeded production of 163.2 thousand tonnes, and have led to a draw down of inventory as well as the sale, in the first half, of the final Western Australian production," the company said.
