JOHANNESBURG (miningweekly.com) – Mineral sands miner Iluka has returned to profit in 2015, as the company boosted production and grew sales.

The ASX-listed firm on Friday reported profit of $53.5-million, which included an accounting adjustment of $17.7-million, compared with a loss of $62.5-million in 2014, which included an impairment charge of $86.5-million.

Production increased in 2015, which MD David Robb stated was in line with demand for high-grade titanium dioxide feedstocks.

Zircon, rutile and synthetic rutile production increased by 29% to 690 000 t, reflecting the successful restart of the synthetic rutile kiln 2, near Capel, in Western Australia. Ilmenite production increased by 27% to 466 000 t, taking total mineral sands production to 1.16-million tonnes at the end of 2015, compared with 900 200 t in 2014.

Zircon, rutile and synthetic rutile sales volumes increased by 5.6% to 651 000 t, while ilmenite sales decreased by 5.3% to 299 800 t. Total mineral sand sales grew by 1.9% to 950 800 t.

Revenue per tonne of zircon, rutile and synthetic rutile sold increased by 10.3% to $1 136, from $1 030/t in 2014.

However, Iluka reported that market conditions for its mineral sands products remained subdued overall, in line with lower global growth, persistent low inflation and capacity adjustments in parts of the mineral sands value change.

Robb affirmed that the company remained focused on investing in its future.

“Iluka believes now is the time to secure and develop options – conventional and innovative, organic and inorganic – consistent with its objective. The company, therefore, has a bias towards the deployment of capital,” he stated in the 2015 results announcement.

He reflected on the completion of the definitive feasibility study (DFS) for the Cataby project, in Western Australia, and reported that the DFS for the Balranald project, in New South Wales, was well advanced. Iluka had also taken two potential US deposits to an advanced stage. The early evaluation of satellite deposits at Jacinth-Ambrosia had been undertaken, while Iluka would move from scoping to prefeasibility study work on the large Sri-Lanka sulphate ilmenite deposit.

Operationally, Robb said, the company performed well. Tutunup South mine and SR kiln 2, both in Western Australia, were restarted.

The company also continued to flex production as required by idling its Virginia operation, in the US, in December, based on its inability to arrive at satisfactory commercial arrangements for the development of one or the other of two new deposits in the US.

Earlier this week, Iluka announced its intention to suspend mining and concentrating operations at Jacinth-Ambrosia for a period of 18 to 24 months. The suspension would increase the company’s free cash flow at a time of subdued industry returns. It would also improve return on capital over time by reducing operating costs and accelerating inventory drawdown.

“In addition, to the extent that perceptions of an inventory ‘supply overhang’ might impact market pricing dynamics, Iluka believes its contribution to a reduction in global inventory will impact those dynamics positively. Achieving the right balance between maintaining defensive strength for today’s industry circumstances and creating options for the industry of the future is challenging, but I am confident the company is well positioned in both aspects,” Robb stated.