PERTH (miningweekly.com) – Mineral sands miner Iluka Resources has announced plans to temporarily suspend its Sierra Rutile operations, in Sierra Leone.

The ASX-listed miner on Thursday told shareholders that it had provided the government of Sierra Leone with six months notice of its intention to suspend operations, effective November 19.

Iluka in April this year told shareholders that the Sierra Rutile operation was facing acute business challenges, particularly since the onset of the Covid-19 pandemic, resulting in its operational performance being below expectations and meaning that its financial performance was unsustainable.

The company told shareholders that during the six months notice period, Sierra Rutile would now evaluate the feasibility of continuing mining operations in the existing mining area through implementing cost reduction and improved productivity, while also evaluating the feasibility of development the Sembehun group of deposits which is some 20 km to 30 km northwest of the current mining operations.

Sierra Rutile would also use the time to continue the process currently under way to identify third parties willing to invest in the next phase of the project’s development.

If Sierra Rutile is able to identify and implement reductions to the cost base of its operations so that it can return to profitability and attract new investors for the continuation of mining operations in the existing mining area and pursue the Sembehun development, then Sierra Rutile will withdraw the suspension notice and mining operations will continue.

Iluka told shareholders that Sierra Rutile would engage collaboratively with the Sierra Leone government in the development of measures to address the financial performance of Sierra Rutile’s operations and facilitate the development of Sembehun, with a view to avoiding or minimising the duration of a suspension.

Under current legislation in Sierra Leone, the suspension of mining operations cannot exceed two years.

Iluka said that if its efforts at Sierra Rutile did not prove successful within this two-year period, Sierra Rutile would move into closure and rehabilitation.