PERTH (miningweekly.com) – Mineral sands miner Iluka has unveiled plans for the downstream processing of mineral sands in Australia, as underlying profits for the full year declined by 45.7%.

Iluka on Thursday reported a net profit after tax of A$2.4-billion for the period, including a A$2.2-billion gain from the demerger of its royalty business in November of last year.

The company’s underlying net profits after tax decreased from A$278.7-million in 2019 to A$151.2-million in the full 2020, while mineral sands revenues declined by 20.6%, from A$1.1-billion to A$947-million.

Iluka told shareholders zircon sales volumes were affected early in the year by Covid-19-related shutdowns, with ceramic plants in some jurisdictions operating at reduced capacity for the remainder of the year.

Synthetic rutile sales volumes were also down largely owing to the contractual dispute with a major customer.

Mineral sands earnings before interest, taxes, depreciation and amortization (Ebitda) also declined by 35.6% in the same period, from A$530.9-million to A$342-million. Group underlying Ebitda declined from A$616-million to A$423.1-million.

“Covid-19 was the source of several unprecedented challenges for Iluka in 2020,” said MD Tom O’Leary on Thursday.

“The company responded with a disciplined performance, prioritizing the safety of our people and communities, prudent management of our financial position, executing the demerger of our royalty business, and adjusting production settings in line with market conditions. Our financial result and other significant achievements over the course of the year are the product of this discipline.”

He said that the company would enter 2021 well placed as the global economy moved towards recovery.

“Iluka has a strong balance sheet and significant funding capacity. We also have positive indicators in key markets, the operational flexibility to respond to improving demand and a maturing pipeline of significant development options. These options will be pursued with the same discipline we have demonstrated over the past year.”

O’Leary noted that the Eneabba project was now the world’s highest grade rare earth operation, and that commissioning for Phase 2 of the project’s development is now scheduled for the first half of 2022.

Additionally, the company is actively exploring the potential for downstream processing of rare earths in Australia, and has started a feasibility study for a fully integrated rare earths refinery.

Looking ahead at 2021, Iluka has set production targets of 285 000 t of zircon, 200 000 t of rutile and between 115 000 t and 175 000 t of synthetic rutile, subject to the length of the temporary production suspension.

Iluka in January announced the temporary suspension of synthetic rutile production for a period of three to six months, in order to reduce stock.