mineral sands revival a possibility for iluka

What have I been saying about Mining Area C in the past.........this stock is under valued based on this fantastic yield it receives from BHP. See my previous posts in April last year re: Mining Area C.

Friday 26 February West Australian

Mineral sands revival a possibility for Iluka
KATE EMERY

Iluka Resources idle mineral sands operations could be restarted over the next 18 months, the miner said yesterday as it cut production forecasts for a flagship growth project.
Announcing a bigger-than-expected $108.6 million loss for 2009, chief executive David Robb said the group had not ruled out resuming production from its Mid-West operations, subject to improved demand.
Restart is a function of supply availability, recruiting people and the right price environment, he said.
Its largely a function of a dialogue we have with our customers about what material they want and what price theyre prepared to pay.
Iluka slashed production capacity at its mines in the Mid-West and South-West by about 50 per cent last year, resulting in about 400 job losses.
The groups major growth projects Jacinth-Ambrosia in South Australia and the second stage of its Murray Basin development are ramping up, although they are not likely to make a meaningful contribution to profit until the December half.
Mr Robb also suggested Iluka may consider a new home for the lucrative iron ore royalty it receives from one of BHP Billitons Pilbara mines.
Iluka has long-argued the royalty, which contributed $50.2 million in revenue last year, is not adequately valued by the market.
Although a straightforward sale wont be considered for tax reasons, Mr Robb said the group was constantly reviewing alternatives, such as an in-specie distribution to shareholders or a demerger.
Shares in Iluka fell 3 per cent, or 13, to $3.63, on the back of the disappointing result.
The market had been prepared for a loss but expected something closer to $80 million. Analysts at Goldman Sachs JBWere, which had tipped a $43 million loss, branded it terrible.
The result included the $50.1 million bill for retrenchments and idling capacity and a $42.9 million currency-hedging loss.
There was further bad news, with Iluka flagging a loss for the June half and cutting production forecasts for Murray Basin stage two.
It now expects to produce 180,000 tonnes of rutile and 140,000 tonnes of zircon, down from 220,000t and 145,000t, citing a slower-thanexpected commissioning and rampup.
Mr Robb conceded the 2009 result was very poor but said the company had been hit by the biggest collapse in demand it had seen.
Describing 2010 as a potential rebound year, he nevertheless warned that further global shocks were possible.