Iluka Resources which recently acquired Sierra Rutile for $425m, has said it would declare a 2016 after-tax loss of between $220m and $230m because of the write downs, which were $141m after tax.
According to The Australian, “As a consequence of mine schedule changes at Sierra Rutile over the period prior to Iluka taking control, lower ore grade will be encountered this year,” Iluka Resources new chief executive Tom O’Leary told investors last week.
He went on “The 2017 financial year will be more challenging for volume and costs. We are addressing this through a revised mine plan” adding the mine was expected to be back on track in 2018.
Iluka’s 2016 annual production is 667,000 tonnes of zircon, rutile and synthetic rutile.
The miner, the world’s biggest supplier of zircon, has told customers it will be increasing zircon prices by about $US50 a tonne, following a $U60 boost in the third quarter. Iluka’s average premium zircon price for 2016 was $US810 a tonne, down from $US986 in 2015.