TORONTO (miningweekly.com) – Iluka Resources, the world's biggest producer of zircon, will close two mines this year, in a move to focus on higher-grade, more profitable operations.

The Wagerup mine, south of Perth, will be shut this month, while the company plans to wrap up mining operations at the Waroona mine in the fourth quarter of this year, when higher-value synthetic rutile feedstock ilmenite has been exhausted.

A third mine in the south-west of Western Australia, Cloverdale, was closed last year.

“The decision to cease mining operations early at Wagerup and Waroona is aligned with Iluka’s focus on generating acceptable returns from its operations,” the firm explained.

“Both of these operations are now at the stage where the production output is mainly lower value sulphate ilmenite.”

PRODUCTION FLAT IN '09

Iluka said on Wednesday that it expects output levels of zircon and rutile this year to be more or less steady from 2008 levels.

The group produced 430 000 t of zircon last year, which was a decline of 14,8% from a year earlier, and 2008 zircon sales exceeded production by more than 20% over the year, as the company drew down on its inventory.

However, sales volumes in 2009 are expected to be “more closely aligned” to production volumes, the firm said.

“Iluka’s lower zircon volume available for sale in 2009 is expected to contribute to overall industry supply tightness for this product.”

Rutile production slid 0,9% from 2007, to 214 000 t, while synthetic rutile production declined 11% to 467 000 t.

The company's output levels were negatively affected across the board by the gas-supply disruption in Western Australia last year, after an explosion severed natural-gas supplies from an offshore plant.

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