wim 150, page-7

Hi all,

A little more from the Iuka website.

From an overall point of view WIM 150 looks more positive.

"corporatefile.com.au

You appear to have a more bullish view on the market dynamics for mineral sands.
Could you make a comment on each of the main sectors?


MD David Robb

First, we believe demand is stronger and supply is more constrained than many
predicted. We have seen lower than forecast production from established
producers and that includes ourselves as we look at the effects associated with the
gas disruption in Western Australia, for example.

Second, there has been a slower ramp up of new production. This is a point I have
made consistently and I think people continue to underestimate, in their production
forecasts, just how hard it is to bring on new production and to sustain that
production. Power constraints and production outages in Africa, you would be
aware of. That is a medium to long term issue, not short term.

Third, we have seen lower zircon output from Kalimantan, Indonesia. According
to industry consultants, TZMI, there was 110,000 tonnes of contained zircon in the
material shipped from Indonesia in 2007 and that is expected to drop to 65,000
tonnes this year and to 40,000 to 55,000 tonnes, or lower, in 2009.

Finally, given the current state of debt and equity markets, it is also a challenging
environment for anyone seeking funding for new projects.

On the demand side, we see continuing strong global demand growth for TiO2.
Our sales in North America are essentially unaffected by the much commented on
housing down-turn. US production is finding its way into export markets. Other
markets continue to grow and we are pleased overall with the demand picture for
TiO2, particularly within the smaller market segments of titanium metal and
welding, which are growing rapidly and where we are very well placed.

Demand from developing economies remains strong. Interestingly, I note BHP
Billiton observed just the other day that the same or smaller annual percentage
growth on a progressively much bigger demand base still requires significant
increases in supply and they were talking, of course, about the impact of any
potential minor slow down in China. I concur with that view. Zircon demand
growth in China and other emerging markets is particularly strong, driven at this
stage largely by commercial and residential construction demand.

I believe in the late cycle nature of demand for our products. Following the early
impact of construction etc., it becomes consumer driven, not infrastructure driven.
As GDP per capita grows in developing economies the number of middle class
people in the world is claimed to be likely to double from two billion to four
billion and that’s a lot of consumer driven demand, which will increase demand
for the products we sell.

TZMI recently issued a report updating their views on zircon supply and demand.
They write: “…[the] global supply side is proving to be unable to keep pace with
demand.” According to their estimates, supply in 2008 globally is 100,000 tonnes
less than 2007.


In my view, and I have communicated this to them, they are still overestimating
supply going forward. Whereas TZMI observes that by mid 2010 the gap between
supply and demand will have eliminated the entire current global inventory of
finished zircon sand, my view is that it could happen sooner than people think.

corporatefile.com.au "

Thank you David.