PERTH (miningweekly.com) – Mineral sands miner Iluka has increased its third-quarter zircon, rutile and synthetic rutile production by 11.9%, compared with the previous quarter.

During the quarter ended September, Iluka produced 142 300 t of combined zircon, rutile and synthetic rutile. The miner said that the higher production reflected the decision to increase processing of zircon-rich concentrate from the Jacinth-Ambrosia project, to compensate for lower levels of finished product and the strengthening of demand for zircon during the first half of the year.

Despite the quarter-on-quarter increase, Iluka’s combined production for the September quarter was still lower than the 202 100 t of product produced during the previous corresponding period.

In the year-to-date, Iluka produced a combined product of 380 400 t, a 41.1% decline on the 645 900 t produced in the previous corresponding nine months.

The miner, whose key products are used in the manufacturing of ceramics and paint, said that the lower production reflected its ability to flex production downwards in response to lower demand at the low point of the business cycle, both to facilitate a progressive draw-down of finished goods, and to reduce operating costs.

But despite a quarter-on-quarter production increase, Iluka’s revenue declined to A$147-million from A$241.8-million in the second quarter. On a year-to-date basis, reveue was A$528.7-million, compared with the A$887.3-million reported in the same period of 2012. This decline in revenue reflected the lower received prices during the period.

Iluka has previously advised that it did not expect the second half of the year to show any material improvement in demand, as seasonal factors in the northern hemisphere meant that the industry was entering into a low demand period.

The ASX-listed company did report that preconditions for a recovery in the pigment market, and in return the demand for high-grade feedstock, has become evident. However, stronger sales volumes in the fourth quarter are unlikely to offset the lower demand of the third quarter.

Iluka maintained its expectations that clear signs of recovery for high-grade feedstock demand would only become evident in late 2013, or 2014.