zircon and eucla basin the hot commodity

Interesting view on Zircon from David Robb - Iluka MD

corporatefile.com.au

You are indicating quite an aggressive production and sales profile for zircon, with
an increase in market share. Does this reflect a different approach by Iluka?


MD David Robb

In our current portfolio, zircon is the driver of future performance; we think the
demand fundamentals are generally positive; we have a market leadership position
and we plan to develop what is arguably the next major, long life source of global
supply. If we are to capture the value of the Eucla discoveries for our shareholders
and also reserve a position for future discoveries, we can’t afford to stand back and
let others take the lion’s share of market growth. We think that we can grow our sales profile in a manner that balances our volume aspirations with other market
considerations.

------------------------------------------------

corporatefile.com.au

What is the market outlook for each of your main products? How do your views
on demand and pricing compare with industry forecasts?

MD David Robb

In terms of zircon, it is fair I think to say that both Iluka and industry
commentators have a positive medium term perspective in terms of demand and
also a view that new major sources of zircon, such as Eucla Basin, are required to
meet medium term demand. I note that TZMI has forecast 4.7% demand growth
for zircon between 2011 and 2015, which is higher than historical forecasts, driven
in large part by China and increasing evidence of zircon based product
consumption in India. The titanium dioxide market overall remains a highly
competitive market. This will influence pricing outcomes. We have a high quality
product offering, especially a growing rutile profile, which should stand us in good
stead based on quality, surety of supply and sound customer relationships. I’ll
leave it to others to make comments on the pricing outlook – we won’t be doing
this in future.