Annual Report
2021
DELIVER
SUSTAINABLE
VALUE
ABOUT ILUKA RESOURCES
Iluka Resources Limited (Iluka) is an international mineral
sands company with expertise in exploration, project
development, mining, processing, marketing and
rehabilitation.
The company’s objective is to deliver sustainable value.
With over 70 years industry experience, Iluka is a leading
global producer of the critical minerals zircon and high
grade titanium dioxide feedstocks (rutile and synthetic
rutile). The company also has an emerging position in rare
earth elements (rare earths). Iluka’s products are used in an
array of applications including technology, construction,
medical, lifestyle and industrial uses.
PRODUCTS
As the world moves towards a smarter, safer and
sustainable future, Iluka’s high quality products are
increasing in demand.
With over 3,000 direct employees, the company has
operations and projects in Australia and Sierra Leone;
and a globally integrated marketing network. Exploration
activities are conducted internationally and Iluka is actively
engaged in the rehabilitation of previous operations in the
United States, Australia and Sierra Leone.
Headquartered in Perth, the company is listed on the
Australian Securities Exchange (ASX). Iluka holds a 20%
stake in Deterra Royalties Limited (Deterra), the largest
ASX-listed resources focused royalty company.
TITANIUM DIOXIDE TiO2
ZIRCON
Iluka is the largest producer of natural rutile and a major
producer of synthetic rutile, manufactured by upgrading
ilmenite. Collectively, these products are referred to as
high-grade titanium dioxide feedstocks, owing to their high
titanium content. Primary uses include pigment (paints),
titanium metal and welding.
Iluka is a leading global producer of zircon. The company
delivers fit-for-purpose products ranging from premium
grade zircon to zircon-in-concentrate (ZIC). Zircon is
opaque; and heat, water, chemical and abrasion resistant.
Primary uses include ceramics; refractory and foundry
applications; and zirconium chemicals.
RARE EARTHS
OTHER PRODUCTS
Iluka has an emerging position in rare earths, which are
contained in the mineral sands monazite and xenotime.
Certain rare earths are considered a critical input across
a number of rapidly evolving markets, such as permanent
magnets used in electric cars, wind turbines and
electronics.
Iluka recovers and markets products produced during
processing activities, including activated carbon, gypsum
and iron concentrate.
FORWARD LOOKING STATEMENT
This document contains certain statements which
constitute “forward-looking statements”. While these
forward-looking statements reflect Iluka’s expectations
at the date of this report, they are not guarantees or
predictions of future performance or statements of fact
and readers are cautioned against relying on them.
Further information regarding forward-looking statements
in this Annual Report is provided on page 161.
This document contains non-IFRS financial measures
including cash production costs, non-production costs,
mineral sands EBITDA, Underlying Group EBITDA, EBIT, free
cash flow, and net debt amongst others. These non-IFRS
measures are not subject to audit or review, however, a
reconciliation of the measures to Iluka’s statutory accounts
is provided on page 31.
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Iluka Resources Limited, Annual Report 2021
OUR LOCATIONS
OPERATIONS, RESOURCE DEVELOPMENT, MARKETING AND REHABILITATION ACTIVITIES
WESTERN AUSTRALIA
SOUTH AUSTRALIA
NEW SOUTH WALES
VICTORIA
• Jacinth-Ambrosia mining and
concentrating
• Atacama project
• Rehabilitation
• Balranald project
• Euston project
• Wimmera project
• Rehabilitation
• Hamilton processing (idle)
• Cataby mining and
concentrating
• Narngulu processing
• Eneabba development
• Capel synthetic rutile
processing
• South West deposits project
• Corporate support centre
• Rehabilitation
UNITED STATES
EUROPE
ASIA
SIERRA LEONE
• Marketing and distribution
• Rehabilitation
• Marketing and distribution
• Marketing and distribution
• Sierra Rutile mining,
concentrating and processing
operations
• Sembehun project
• Rehabilitation
Iluka Resources Limited, Annual Report 2021
3
EXPLORATION &
PROJECT DEVELOPMENT
RESEARCH & ANALYSIS
MINING
Exploration
Technical Development
Mining
Iluka prospects globally for high quality
mineral deposits as part of the company’s
strategy to continue to grow and develop its
diverse project pipeline. This includes both
greenfield and brownfield opportunities.
Throughout all stages of project work Iluka
ensures cultural heritage, community and
environmental impacts are considered
respectfully.
Iluka identifies, researches and develops
solutions that address operational,
customer and industry challenges. This is
achieved through continued investment
into innovative processing, mining and
technological opportunities. Iluka has
a dedicated Metallurgical Test Facility
(MTF), analytical laboratories, and an open
innovation approach to collaborating with
industry bodies and universities.
Project Development
Education
Iluka progresses developments through its
project pipeline to deliver sustainable value
now and into the future. The company takes
a gated approach to project evaluation,
completing scoping, preliminary and
detailed feasibility studies to determine the
operational feasibility and commercial returns
of prospective investments. Consideration is
given to a wide range of factors in proceeding
with developments, including industry
dynamics, portfolio optimisation and a range
of financial metrics.
Partnerships with researchers across
a number of tertiary institutions within
Australia and the United States deliver
research-led outcomes geared towards
improving future rehabilitation outcomes.
Iluka also supports scholarships for
students in industry-related fields; and
offers work experience, apprenticeships
and graduate programmes through a series
of education partnerships and initiatives.
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Iluka Resources Limited, Annual Report 2021
Mineral sands mining involves both dry
mining and wet (dredge) operations. All
of Iluka’s current operations use a dry
mining approach. Mining units and wet
concentrator plants separate ore from
waste material and concentrate the heavy
mineral sands.
The company pursues operational
excellence to optimise production output
sustainably. Operational flexibility enables
Iluka to preserve margins across the
company’s core product suite throughout
periods of market instability, and to
maximise production throughput during
periods of high demand.
Economic Contribution
Direct and indirect benefits to local
economies are provided by Iluka’s
operations and activities through
the payment of taxes and royalties;
employment and procurement
opportunities; and through community
investment initiatives. The company
reports on its economic contributions
through the Annual Report and Tax
Transparency Report.
PROCESSING
MARKETING &
LOGISTICS
REHABILITATION &
CLOSURE
Processing
A Global Network
Progressive Rehabilitation
An extensive marketing and logistics
network enables Iluka to supply critical
minerals to hundreds of customers in
over 40 countries. Iluka’s significant
experience working across a wide range
of supply chains enables marketing and
product development teams to create
value from delivering market specific
products.
The recovery and sale of by-products
produced through Iluka’s processing
activities, including activated carbon and
iron concentrate, maximises the value of
products and reduces waste at source.
Rehabilitation commences during the
operational phase of the mine lifecycle.
This minimises Iluka’s mining footprint
and assists with understanding and
evaluating closure risks, including
through informing research and
development programmes, and refining
closure provision estimates. Ongoing
environmental monitoring is performed
at all rehabilitated mine sites.
Iluka has a demonstrated track record
and strong credentials in environmental
management of mining, processing,
product handling, waste management
and rehabilitation.
Heavy mineral concentrate is transported
from Iluka’s mines to its mineral separation
plants for final product processing. The
plant separates the minerals zircon, rutile,
ilmenite, monazite and xenotime in multiple
stages using magnetic, electrostatic and
gravity separation.
Iluka is constructing facilities in Western
Australia to upgrade the rare earth
bearing minerals monazite and xenotime,
which are produced as a co-products of
mineral sands processing activities, to a
feedstock suitable for a rare earths refinery.
Certain rare earths, including those held
by Iluka, are considered essential to the
development of an electrified, low carbon
economy.
Synthetic Rutile Kiln
Iluka produces synthetic rutile from
ilmenite that is upgraded in kilns by high
temperature chemical processes. The
upgraded, high quality product has a
titanium dioxide content of 89-94%.
Iluka Resources Limited, Annual Report 2021
5
CONTENTS
BUSINESS REVIEW
2021 YEAR IN REVIEW
CHAIRMAN’S AND MANAGING DIRECTOR’S REVIEW
BOARD OF DIRECTORS AND COMMITTEES
EXECUTIVE
STRATEGY AND BUSINESS MODEL - THE ILUKA PLAN
FINANCIAL AND OPERATIONAL REVIEW
INNOVATION AT ILUKA
2021 PROJECT PIPELINE
SUSTAINABILITY REPORT
BUSINESS RISK AND MITIGATION
FINANCIAL REPORT
RESULTS FOR ANNOUNCEMENT TO THE MARKET
DIRECTORS’ REPORT
REMUNERATION REPORT
AUDITOR’S INDEPENDENCE DECLARATION
FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
PHYSICAL, FINANCIAL AND CORPORATE INFORMATION
FIVE YEAR PHYSICAL AND FINANCIAL SUMMARY
OPERATING MINES PHYSICAL DATA
ORE RESERVES AND MINERAL RESOURCES STATEMENT
SHAREHOLDER AND CORPORATE INFORMATION
CORPORATE INFORMATION
ABOUT THIS REPORT
7
10
12
13
14
20
38
39
40
52
56
57
67
86
87
140
142
148
150
151
159
161
This Annual Report is a summary of Iluka Resources’ and its subsidiaries’ operations, activities and financial position
as at 31 December 2021. Currency is expressed in Australian dollars (AUD) unless otherwise stated.
This Report includes Iluka’s Sustainability reporting, with reference to the Global Reporting Initiative (GRI) Standards.
Current and previous reports are available on the company’s website at www.iluka.com.
Iluka is committed to reducing the environmental footprint associated with the production of the Annual Report, and
printed copies are only posted to shareholders who have elected to receive a printed copy.
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Iluka Resources Limited, Annual Report 2021
2021 YEAR IN REVIEW
FINANCIALS
$1,486m
$652m
MINERAL SANDS REVENUE
UNDERLYING GROUP EBITDA
43%
MINERAL SANDS EBITDA MARGIN
$295m
NET CASH
(as at 31 December 2021)
MARKETS AND OPERATIONS
OPERATIONS RETURNED
TO MAXIMUM
CONFIGURATION
868kt
Z/R/SR SOLD
720kt
Z/R/SR PRODUCED
PEOPLE AND ENVIRONMENT
22%
25%
20%
TOTAL WOMEN
REPRESENTATION ACROSS
AUSTRALIAN OPERATIONS
REDUCTION IN SERIOUS
POTENTIAL INJURIES
(46 in 2021; 61 in 2020)
REDUCTION IN LEVEL 3 OR
GREATER ENVIRONMENTAL
INCIDENTS COMPARED
TO 2020
Iluka Resources Limited, Annual Report 2021
7
2021 YEAR IN REVIEW
Narngulu mineral separation
plant (MSP), one of the largest
MSPs globally, returned to full
processing capacity in January
in response to increasing
market demand.
Sierra Rutile focused on
returning to sustainable
financial and operational
performance.
All major construction and
procurement contracts
awarded for Eneabba Phase 2
development.
Letter of support from the
Australian Government for
the construction of a fully
integrated rare earth refinery at
Eneabba (Eneabba Phase 3).
Both Jacinth-Ambrosia and
Cataby record increased
production output due to higher
ore treatment volumes, ore
grade and recovery.
Iluka provides the Government
of Sierra Leone six months
notice of its intention to
temporarily suspend operations
at Sierra Rutile effective 19
November 2021.
Iluka’s Critical Control
Management (CCM)
programme launched across
all Australian operating sites.
Feasibility Study for Eneabba
Phase 3 announced,
adopting work completed
from the Wimmera project to
accelerate the study.
Synthetic rutile
kiln 2 (SR2) recommences
production early from a planned
suspension during February
and March; the kiln operated at
full capacity for the remainder
of the year.
Tropical Cyclone Seroja shuts
down production at Cataby
mine and Narngulu mineral
separation plant for three days.
US exploration
activities shifted to drill testing
of regional targets on the
eastern seaboard.
Addition of Euston project
to Iluka’s project pipeline,
representing a potential
significant source of zircon,
rutile and ilmenite.
Hydraulic mining trial at
Sembehun completed,
demonstrating viability as an
ancillary mining method.
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Iluka Resources Limited, Annual Report 2021
Sierra Rutile Limited wins the
International SOS Foundation
Duty of Care Award in the
Remote Resilience category.
Definitive Feasibility Study (DFS)
for Iluka’s Balranald project
approved, reflecting confidence
in the company’s application
of new underground mining
technology.
Jacinth-Ambrosia commissions a
3.5MW solar farm with an expected
annual reduction of 5,500 tonnes
of carbon dioxide and ~$2million
per annum of cost savings.
Mineral resource estimate
announced for Iluka’s Wimmera
project, reflecting confidence in
the company’s zircon processing
solution. Larger scale piloting of
the process is commissioned.
Iluka’s innovative rehabilitation
equipment, Flora Restorer,
announced as a finalist in the
Department of Mines, Industry
Regulation and Safety (DMIRS)
Golden Gecko Award for
Environmental Excellence.
Iluka’s continuous improvement
programme CORE launched.
Monazite sales finalised in
line with offtake agreements
for Phase 1 of the Eneabba
development.
Jacinth-Ambrosia mine
shutdown for 24 hours due to a
COVID-19 outbreak.
Decision to execute the restart
of synthetic rutile kiln 1 (SR1)
announced, with refurbishment
work commencing and start-up
expected by Q4 2022.
Government of Sierra Leone agrees
to reset the fiscal regime for the
remaining Area 1 mining operations,
effective 1 August 2021.
Sierra Rutile achieves improved
production with higher
assemblage, recovery and
operational improvements.
Potential suspension of operations
deferred to January 2022.
Iluka Resources Limited, Annual Report 2021
9
CHAIRMAN’S AND MANAGING DIRECTOR’S REVIEW
Dear Shareholders,
For many years now, Iluka has consistently outlined the structural
challenges facing the mineral sands industry. These centre on
the nearer and longer-term implications of depleting supply
from currently producing deposits and regions. In 2021, we saw
practical manifestations of these industry challenges magnified
by the COVID-19 global pandemic; geopolitical strategic
competition; and accelerating progress and commitment towards
an electrified, low carbon economy.
Born of a combination of planning and necessity, this has seen a
corresponding period of evolution at Iluka.
Proactively, we have progressed a range of opportunities and
initiatives to ensure your company is well positioned to lead in
response to a changing industry in a changing world. We have
strived for continuous improvement across our operations. We
have remained committed to a sustainable pricing environment
for our products. And we have invested in both a project
development pipeline and in workforce capability to sustain, grow
and potentially transform our business.
The initial positive outcomes generated from these endeavours
were evident in 2021. Demand for Iluka’s products, which are
regarded by key industries and governments as critical minerals,
was particularly robust. This demand, combined with our
continued business discipline, resulted in one of the strongest
financial performances in the company’s history.
NPAT was $366 million and underlying group EBITDA $652
million. We ended the year in a net cash position of $295 million
and declared a full year dividend of 12 cents per share. Total
dividends for 2021 were 24 cents per share, fully franked.
SUSTAINABILITY
Notwithstanding the myriad changes around us, our first and
fundamental priority remains the same – the safety of our people.
Reducing serious potential injuries has been a specific safety
focus for Iluka. We achieved a 25% decrease in our Serious
Potential Injury Frequency Rate in 2021, which is an important
step forward in an area that demands constant vigilance. Our
Total Recordable Injury Frequency Rate was 2.1.
To date, the operational impact of COVID-19 on our business has
been most pronounced in Sierra Leone, with preparation key to
ensuring operations continued safely and sustainably throughout
the year. Iluka invested $2.7 million on COVID-related measures
at Sierra Rutile in 2021, including establishing on-site quarantine
and isolation facilities. This investment is modest in comparison
to the commitment of our people, especially Sierra Rutile’s
medical team, in their tireless efforts to help protect their local
communities.
In Australia, operations continued uninterrupted by the pandemic
for most of the year. Jacinth-Ambrosia in South Australia was the
only operation to undergo a temporary shutdown, in December, in
response to a COVID-19 outbreak. Quick implementation of the
site’s COVID Response Plan ensured the outbreak was contained,
with operations up and running again within 24 hours.
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Iluka Resources Limited, Annual Report 2021
While this is a very pleasing outcome, we can expect our
resilience to be tested further over the coming year, with
sustained community transmission of the virus now occurring in
Western Australia for the first time.
Iluka rehabilitated 742 hectares of land in 2021, up from 576
hectares in 2020. Environmental stewardship activities also
included the conversion of Jacinth-Ambrosia, the largest zircon
mine in the world, to a solar-hybrid power operation in November.
This is expected to reduce carbon dioxide emissions by 5,500
tonnes per annum and, as part of a broader work programme
being developed to reduce Iluka’s carbon footprint, is being used
as a blueprint for the use of renewable power sources at other
company sites.
During the year the Board initiated a dedicated Sustainability
Committee in June, reflecting the further integration of
sustainable development across Iluka’s portfolio.
MARKETS AND OPERATIONS
As we reported to shareholders last year, the early phases of
the pandemic in 2020 saw a significant decline in demand for
Iluka’s products. Our operational flexibility enabled us to reduce
costs and maintain margins until markets recovered. By April
2021, we had returned to maximum operational settings to meet
the rebounding market. This demand was magnified by both
production challenges experienced by other major mineral sands
producers; and broader supply chain constraints across the
global economy. As a result of these factors, our customers have
and continue to prioritise security of supply.
For zircon, we achieved considerable pricing traction over the
course of the year, with recovery across all end markets. Demand
from major ceramics producers in China, Italy and Spain drove
sales in the first half as their production returned to pre-pandemic
levels. Strategic sales of zircon-in-concentrate (ZIC) enabled Iluka
to respond to nearer term supply side challenges in the industry.
By the third quarter, all of Iluka’s annual zircon production was
committed.
In high grade titanium feedstocks, market demand outpaced
supply and, like zircon, all production was fully committed by
the third quarter. Pigment customers sought very high grade
feedstocks, Iluka’s core product offering, to increase plant
utilisation. High grade feedstocks were also in strong demand in
the welding market, where natural rutile is the preferred feedstock.
This was demonstrated by Iluka’s record sales into this high value
segment in 2021.
Iluka’s synthetic rutile kiln 2 (SR2) underwent a two-month
shutdown in February to manage stock levels. Resumption of
sales and subsequent reduction in inventory facilitated a return
to full production in April, earlier than planned. In August, the
Board approved the restart of synthetic rutile kiln 1 (SR1). This is a
capital efficient, incremental increase in production into a supply-
constrained market. Work on the restart is underway and the kiln
is expected to be operational by the end of 2022, with feedstock
arrangements in place for an initial two year campaign.
The Narngulu mineral separation plant operated at maximum
settings throughout the year, processing 623 thousand tonnes of
heavy mineral concentrate.
Both technologies would likely be applicable to other deposits
and could deliver sustainable solutions to known industry
challenges.
Mining operations focused on maximising production and
throughput. At Cataby in Western Australia, operational
improvements saw a record performance in November. Jacinth-
Ambrosia also recorded strong results despite dealing with lower
ore grades.
At Sierra Rutile, further operational improvement initiatives
resulted in increased production for the year. These
improvements, combined with a series of measures agreed to
by the Government of Sierra Leone regarding Sierra Rutile’s
fiscal regime, have resulted in the withdrawal of the notice of
intention to suspend operations in January 2022. The process
to identify third parties willing to invest in the next phase of Sierra
Rutile’s growth continues and has been broadened to include the
consideration of a demerger.
INNOVATION AND DIVERSIFICATION
Iluka has invested substantially in developing novel mining and
processing technologies to unlock deposits in our asset base
previously considered uneconomic or unmarketable. If realised,
these investments will enable the company to continue to deliver
the secure supply of critical minerals over the long term.
Significant progress has been made at Balranald in New South
Wales and Wimmera in Victoria respectively. The definitive
feasibility study for Balranald was approved by the Board in
August; and a maiden resource was declared for the Wimmera
deposits in November. These internally developed technology
solutions have the potential to transform Iluka and the mineral
sands industry.
Alongside technology transformation in mineral sands, our
diversification into rare earths is set to significantly enhance
the company’s core product suite. Eneabba is the cornerstone
of Iluka’s diversification strategy and the world’s highest grade
rare earths operation. In 2021, the final shipment of Phase 1
material from the Eneabba development was completed. Phase
2 construction activities were carried out on schedule over the
course of the year, with commissioning to occur by mid-2022.
Iluka is in discussions with the Australian Government regarding
risk sharing arrangements for a potential Phase 3 at Eneabba,
consisting of a fully integrated rare earths refinery. These
discussions are ongoing, with the finalisation of the feasibility
study for Phase 3 scheduled for Q1 2022.
A Phase 3 refinery would see Eneabba and Australia become a
key global hub for the secure production of refined rare
earths. The fastest growing application for rare earths is for the
production of permanent magnets, which are essential inputs
for sustainable energy technologies such as electric vehicles
and wind turbines. Growing demand for rare earths in 2021 was
reflected in rising prices throughout the year. This demand is
projected to increase markedly in coming years.
As we work towards a smarter, safer and sustainable future, Iluka
is at the forefront of industry evolution. We have demonstrated
resilience and operational flexibility to meet lower and high market
demand. Furthermore, we are evolving the company to achieve
the next phase of growth for our shareholders, customers,
communities and people. In doing so we remain committed to
delivering sustainable value as a leading global supplier of critical
minerals.
Thank you for your continued interest and support.
GREG MARTIN
Chairman
TOM O’LEARY
Managing Director and CEO
Iluka Resources Limited, Annual Report 2021
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BOARD OF DIRECTORS AND COMMITTEES
TOM O’LEARY
LLB, BJuris
Managing Director and Chief
Executive Officer
Joined Iluka 2016
Wesfarmers Chemicals; Energy
& Fertilisers, Wesfarmers, Nikko,
Nomura, Allen & Overy,
Clayton Utz
ROB COLE
LLB (Hons), BSc
Independent
Non-Executive Director
Joined Iluka 2018
Perenti, GLX Group, Synergy,
Southern Ports, St Bartholomew’s
House, Woodside Petroleum, King &
Wood Mallesons, Landgate
LYNNE SAINT
BCom, GradDip Ed Studies, FCPA,
Cert Business Administration, FAICD
Independent
Non-Executive Director
Joined Iluka 2019
Bechtel Group, Fluor Daniel, Placer
Dome, NuFarm, Ventia
GREG MARTIN
BEc, LLB, FAIM, MAICD
Chairman
Independent
Non-Executive Director
Joined Iluka 2013
Murchison Metals, The
Australian Gas Light Company,
Santos, Western Power, Energy
Developments
MARCELO BASTOS
BEng Mechanical (Hons, UFMG),
MBA (FDC-MG), MAICD
Independent
Non-Executive Director
Joined Iluka 2014
Vale, BHP, MMG, Aurizon Holdings,
Golder Associates, Anglo American,
Golding Contractors, OZ Minerals
SUSIE CORLETT
BSc (Geo Hons), GAICD, FAusIMM
Independent
Non-Executive Director
Joined Iluka 2019
Aurelia Metals, The Foundation for
National Parks & Wildlife, Standard
Bank, Macquarie Bank, Pacific Road
Capital Management
ANDREA SUTTON
BEng Chemical (Hons),
GradDipEcon, GAICD
Independent
Non-Executive Director
Joined Iluka 2021
Rio Tinto, Energy Resources
of Australia, ANSTO, National
Association of Women in
Operations, Red 5, DDH1
COMMITTEES
The Board of Directors comprises six non-executive Directors and one executive Director (the Managing Director).
Audit and Risk Committee
Chair - Lynne Saint
Nominations and Governance Committee
Chair - Greg Martin
People and Performance Committee
Chair - Rob Cole
Sustainability Committee
Chair - Greg Martin
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Iluka Resources Limited, Annual Report 2021
EXECUTIVE
TOM O’LEARY
LLB, BJuris
Managing Director and Chief
Executive Officer
Joined Iluka 2016
Wesfarmers Chemicals; Energy
& Fertilisers, Wesfarmers, Nikko,
Nomura, Allen & Overy, Clayton
Utz
MATTHEW BLACKWELL
BEng (Mech), Grad Dip (Tech Mgt),
MBA, MAICD, MIEAust
Head of Major Projects
and Marketing
Joined Iluka 2004
Asia Pacific Resources, WMC
Resources, Normandy Poseidon
SARAH HODGSON
LLB, GAICD
General Manager People
and Sustainability
Joined Iluka 2013
KPMG, Westpac, Mercer
SHANE TILKA
BCom
General Manager,
Australian Operations
Joined Iluka 2004
ADELE STRATTON
BA (Hons), FCA, GAICD
Chief Financial Officer
and Head of Development
Joined Iluka 2011
KPMG, Rio Tinto Iron Ore
ROB HATTINGH
MSc (Geochem), GAICD
Head of Climate Change
Response
Joined Iluka 2008
Richards Bay Minerals, Exxaro
DANIEL MCGRATH
BSc (Math)
Chief Technology Officer
and Head of Rare Earths
Joined Iluka 1993
THEUNS DE BRUYN
BEng (Chem), MBA
Chief Operating Officer,
Sierra Rutile
Joined Iluka 2019
BHP Billiton, Lonmin Platinum,
Metorex
The Executive responsibilities include achieving defined business and financial outcomes; capital deployment; business planning;
identification and pursuit of appropriate growth opportunities; sustainability performance; promotion of diversity objectives; strategic
workforce planning and capability; and leadership of required culture and behaviours.
Iluka Resources Limited, Annual Report 2021
13
THE ILUKA PLAN
OUR VALUES
• INTEGRITY • RESPECT • COURAGE • ACCOUNTABILITY • COLLABORATION
OUR PURPOSE
THE ILUKA PLAN
Iluka’s purpose is to deliver sustainable value. The
company aims to achieve this by:
•
•
•
•
•
•
•
protecting the safety, health and wellbeing of
our employees;
optimising shareholder returns through prudent
capital management and allocation;
developing a robust business that can maintain
and grow returns over time;
providing a competitive offering to our
customers;
managing our impact on the environment;
supporting the communities in which we
operate; and
building and maintaining an engaged, diverse
and capable workforce.
DELIVER TO GROW OUR FUTURE
Iluka commenced 2021 well placed, having successfully navigated the initial impacts on business and operating conditions from
COVID-19. Over the course of 2021 Iluka has built on this foundation to take advantage of substantially improved markets, delivering
strong results and progressing key projects. Through the company’s marketing approach, product suite, world-class operations and
development pipeline, Iluka has established a strong foundation to lead in the response to market and industry conditions.
EXECUTE OUR PROJECTS
Iluka progressed a number of developments in its project pipeline over 2021 that provide options to sustain and grow the business
into the future. Several of these projects were executed and under construction in 2021, including:
•
•
•
The SR1 kiln restart - a capital efficient, incremental increase in synthetic rutile production, delivering high grade titanium
feedstocks into a supply constrained market
Debottlenecking of Cataby’s mining units - increasing mining unit production rates and reducing mining costs by effectively
managing higher clay and oversize material
Phase 2 of the Eneabba development - under construction with commissioning planned in first half of 2022 to upgrade the
monazite-zircon material from Eneabba to a higher value product.
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Iluka Resources Limited, Annual Report 2021
Iluka initiates, develops and progresses projects towards execution subject to building confidence and becoming satisfied with their risk
and return; strategic alignment; and the timing of potential market opportunities.
+ Read more on Iluka’s business risk and mitigation work on pages 52-54.
EXCEL IN OUR CORE
Central to Iluka’s business is the company’s unyielding focus on safety and commitment to responsible operations. The COVID-19
pandemic continued to affect regions in which Iluka operates, with ongoing challenges from border restrictions within Australia impacting
project and exploration work. In Sierra Leone, Iluka continued to provide vaccination and health services to employees and their families,
investing over $2.7 million on COVID-related measures.
+ Read more on Iluka’s sustainability efforts on pages 40-51.
Reflecting the favourable market conditions and operational settings of the company, Iluka delivered an excellent financial result in 2021.
Net profit after tax was $366 million, free cash flow was $300 million. The company maintained a strong balance sheet position, ending
2021 with net cash of $295 million. This result demonstrates Iluka’s commitment to delivering sustainable value.
In 2020, Iluka implemented a company-wide efficiency project which has fully delivered its value target. A revitalised continuous
improvement programme - CORE - was rolled out across the business from late 2021. This has supported optimisation efforts across
operations, including improved product recoveries; enhanced by-product production; and optimised feedstock mix into kiln operations.
+ Read more on Iluka’s operations on pages 24-30.
Throughout 2021, customers sought high quality zircon and very high grade titanium feedstocks, Iluka’s core product offering, with
increasing emphasis on security of supply. Pricing traction was achieved across the company’s product suite.
+ Read more on Iluka’s marketing and sales on pages 22-23.
MATURE OUR OPTIONS
Iluka matures project options across all levels of development in its project pipeline to ensure both near and longer term options
are progressed in line with the company’s objective of delivering sustainable value. In 2021, Iluka made significant progress on the
company’s rare earths diversification:
•
•
Eneabba development - Phase 1 was finalised; Phase 2 construction progressed on schedule; and an expedited feasibility study
for Phase 3 progressed with a final investment decision planned for early 2022.
Wimmera project - work in 2021 focused on testing and validating a processing solution to remove impurities in the zircon.
A number of mineral sands projects were also advanced over the year including the Balranald project (New South Wales) progressing to
Definitive Feasibility Study (DFS); and Preliminary Feasibility Studies (PFS) ongoing for the Euston (New South Wales), Atacama (South
Australia) and South West deposits (Western Australia) projects.
+ Read more on Iluka’s projects on pages 32-35.
GROW WHERE WE CAN ADD VALUE
Iluka is seeking to address depleting supply across the mineral sands industry by pursuing technical development opportunities in
Australia. This includes mining and processing solutions that could be transformative for both the company and industry such as:
•
•
The innovative underground mining technology under development for the Balranald project to access a below surface ore body
as an alternative to an open pit operation.
The zircon processing solution under development for the Wimmera deposits will potentially deliver zircon suitable for the premium
ceramic industry, unlocking a new mineral province.
Rare earths represents an important and logical diversification for Iluka. Eneabba is the world’s highest grade rare earths operation and
provides world class foundation. The Wimmera development has the potential to serve as a long-life source of both rare earths and
zircon. The company is currently studying the feasibility of developing a fully integrated rare earths refinery at Eneabba, which would
provide a strategic processing hub for Australia’s rare earth resources.
+ Read more on Iluka’s innovation work on page 38.
Iluka Resources Limited, Annual Report 2021
15
MINERAL SANDS
REVENUE
UNDERLYING MINERAL
SANDS EBITDA
UNDERLYING GROUP
EBITDA
$1,486m
$634m
$652m
$m
$m
$m
1,486
1,244
1,193
1,018
947
634
545 531
600 616
652
423
342
361
301
30%
44% 45%
43%
36%
17
18
19
20
21
17
18
19
20
21
17
18
19
20
21
EBITDA
EBITDA margin
MINERAL SANDS REVENUE
Mineral sands revenue was $1,486 million in 2021, up 57% from 2020.
Zircon sales volumes increased 48% to 355 thousand tonnes with ceramics markets rebounding following the COVID-19 shutdowns in
2020. Demand remained strong through the year. Iluka’s weighted average zircon sand price increased from US$1,291 per tonne in Q4
2020 to US$1,590 per tonne in Q4 2021.
High grade titanium feedstock markets saw an increase in demand in 2021. Synthetic rutile sales were higher, largely due to the
settlement of a contractual dispute with Chemours and resumption of sales under the contract. The increase in rutile sales reflects strong
demand, including in welding markets. Iluka’s weighted average rutile price (excluding HYTI) increased 4% from 2020.
Ilmenite and other revenue decreased 2% to $104 million reflecting lower ilmenite sales as more product was used as feedstock to
produce synthetic rutile. Monazite-zircon concentrate sales from Eneabba increased, with 62 thousand tonnes shipped in 2021, in line
with the two year offtake agreement, that concluded in December 2021.
UNDERLYING MINERAL SANDS EBITDA
Underlying mineral sands EBITDA was $634 million. This reflects the strong production and sales result following the disruptions of
COVID-19 in 2020, despite ongoing logistical challenges globally. Mineral sands continued to generate strong EBITDA margins at 43%
(2020: 36%).
UNDERLYING GROUP EBITDA
Underlying group EBITDA was $652 million, including $18 million earnings from Iluka’s 20% stake in Deterra.
16
Iluka Resources Limited, Annual Report 2021
NET PROFIT
AFTER TAX
FREE CASH
FLOW
NET CASH
(DEBT)
ROE AND
ROC
$366m
$300m
$295m
$m
$m
322
304
2,410
$m
%
300
295
ROE 26%
ROC 69%
311
284
304
366
-172
17
18
-300
19
140
36
43
50
17%
2
-183
54
32
-12
-20
69
26
20
21
7
-25
19
20
21
17
18
19
20
21
17
18
19
20
21
17
18
Net cash (debt)
Gearing %
Return on equity
Return on capital
NET PROFIT AFTER TAX
Iluka reported a net profit after tax (NPAT) of $366 million, up from $151 million underlying NPAT in 2020.
FREE CASH FLOW
Free cash flow was $300 million, up from $36 million in 2020.
Operations generated $528 million cash flow, with a draw down in inventory offset by a build in year end receivables. Cash flow
contribution from the 20% stake in Deterra Royalties was $15 million.
Capital expenditure was $54 million. This included $29 million spent on Eneabba Phase 2; $14 million on feasibility studies for Balranald,
Euston, South West and Atacama deposits; $2 million on the SR1 restart; and the remainder on sustaining capital expenditure. During
2021, $18 million has been spent on advancing critical growth studies, including Eneabba Phase 3, Wimmera and the Balranald trial, that
do not qualify as capital expenditure and are captured within operating cashflows and expenses.
Total tax payments of $150 million include a $27 million 2020 final tax payment paid in the first half of 2021.
NET CASH
As at 31 December 2021, Iluka reported a net cash position of $295 million, up from $50 million net cash as at 31 December 2020.
Iluka prioritised maintaining a strong balance sheet in 2021 in the face of continued uncertainty due to the global pandemic.
RETURN ON EQUITY AND RETURN ON CAPITAL
Iluka reported return on equity of 26% and return on capital of 69%. The 2020 metrics include the $2,247 million gain on the demerger of
Deterra.
Iluka Resources Limited, Annual Report 2021
17
BALANCE SHEET As at 31 December 2021, Iluka had total debt facilities of $512 million and net cash of $295 million.
The company has a Multi Optional Facility Agreement (MOFA), which comprises a series of committed
five-year unsecured bilateral revolving credit facilities with several domestic and foreign institutions. The
facilities are denominated in both AUD and USD and mature in 2024.
No funds were drawn from the MOFA as at 31 December 2021 (2020: $38 million).
Note 21 of Iluka’s Financial Report provides details of the maturity profile and interest rate exposure.
NET DEBT, GEARING AND
DEBT FACILITIES
DEBT FACILITIES
MATURITY PROFILE
$m
700
695
Gearing %
618
100
519 500 505
80
295
60
40
20
0
43
50
2
600
500
400
300
200
100
0
-100
-200
17%
-1 83
17
18
19
20
21
Debt facilities $m
Net cash (debt)
Gearing %
DIVIDEND
FRAMEWORK
Iluka has revised its dividend framework following the demerger of Deterra to ensure shareholders receive
the full return on the company’s investment in Deterra.
Iluka’s new dividend framework is to pay 100% of dividends received from Deterra Royalties and pay a
minimum of 40% of free cash flow from the mineral sands business not required for investing or balance
sheet activity. The company also seeks to distribute the maximum franking credits available.
Iluka declared a final dividend of 12 cents per share, fully franked, for 2021, resulting in full year dividends
of 24 cents per share, fully franked. This payout reflects the revised dividend framework after allowing for
significant capital investment expected in 2022.
HEDGING
Iluka manages a portion of its foreign exchange risk via a foreign exchange hedging programme. The
Group entered into the following hedging contracts in 2021:
•
•
•
US$69.7 million in forward exchange contracts in 2021 with an average rate of 77.2 cents, which
matured during the year;
US$24.6 million in foreign exchange call options with an average rate of 80.0 cents, which also
matured during the year; and
US$109.4 million in foreign exchange collars consisting of US$109.4 million of bought AUD call
options with weighted average strike prices of 80.0 cents and US$109.4 million of sold AUD put
options with weighted average strike prices of 67.7 cents.
In addition, the following hedging contract matured during the year:
•
US$105.5 million in foreign exchange collar contracts consisting of US$105.5 million of bought
AUD call options with weighted average strike prices of 78.6 cents and US$105.5 million of sold
AUD put options with weighted average strike prices of 70.4 cents.
Iluka has US$102.3 million in foreign exchange collar contracts in relation to expected USD revenue from
contracted sales to 31 December 2022 which remain open as at 31 December 2021, which are detailed
in Note 21 of Iluka’s Financial Report.
18
Iluka Resources Limited, Annual Report 2021
In this section
SALES AND MARKETS
PRODUCTION AND OPERATIONS
PROJECTS
EXPLORATION
SUSTAINABILITY REPORT
PROJECT PIPELINE
Iluka Resources Limited, Annual Report 2021
19
FINANCIAL AND OPERATIONAL REVIEW
INCOME STATEMENT ANALYSIS
$ million
Z/R/SR revenue
Ilmenite and other revenue
Mineral sands revenue
Cash costs of production
Inventory movement - cash
Restructure and idle capacity charges
Government royalties
Marketing and selling costs
Asset sales and other income
Major projects, exploration and innovation
Corporate and other costs
Foreign exchange
Underlying mineral sands EBITDA
EBITDA from discontinued operations
Share of profit in associate
Underlying Group EBITDA
Depreciation and amortisation
Inventory movement - non-cash
Rehabilitation costs for closed sites
Demerger transaction costs
Gain on demerger of Deterra Royalties
Gain on change of ownership of Deterra Royalties
Gain on remeasurement of IFC Put Option
Impairment of exploration assets
Group EBIT
Net interest and bank charges
Rehabilitation unwind and other finance costs
Profit before tax
Tax expense
Profit for the period (NPAT)
Average AUD/USD rate for the period (cents)
MOVEMENT IN UNDERLYING NPAT
$ million
NPAT
Non-recurring adjustments:
Rehabilitation for closed sites - Total
Impairments
Put Option revaluation
MAC demerger
Underlying NPAT
20
Iluka Resources Limited, Annual Report 2021
2021
2020
% change
1,381.9
103.9
1,485.8
(579.2)
(67.0)
(33.4)
(38.0)
(34.4)
2.0
(45.2)
(64.3)
7.6
633.9
-
18.4
652.3
(171.2)
(12.6)
60.8
-
-
-
(3.4)
(6.3)
841.0
106.0
947.0
(558.7)
142.3
(20.9)
(22.3)
(27.7)
(1.5)
(62.3)
(54.6)
0.7
342.0
81.0
0.1
423.1
(184.8)
39.9
7.2
(13.3)
1,808.1
452.0
19.4
(12.4)
519.6
2,539.2
(5.7)
(8.9)
(6.4)
(27.3)
505.0
2,505.5
(139.1)
(95.5)
365.9
2,410.0
75.2
69.1
64.3
(2.0)
56.9
3.7
-
59.8
70.4
24.2
-
(27.4)
17.8
-
85.4
-
-
54.2
(7.4)
-
-
-
-
-
-
(49.2)
(79.5)
(10.9)
(67.4)
(79.8)
45.7
(84.8)
8.8
2021
2020
% change
365.9
2,410.0
(84.8)
60.8
(6.3)
(3.4)
-
5.0
(12.4)
19.4
2,246.8
-
(49.5)
-
-
314.8
151.2
108.2
Figure 1. Reconciliation of 2020 to 2021 underlying NPAT
m
$
500
450
400
350
300
250
200
150
100
50
0
243
(13)
(61)
55
(25)
17
(16)
(63)
5
18
(46)
(8)
315
58
151
r
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Sales commentary is contained on pages 22-23.
The Australian dollar appreciated sharply in 2021 before dropping
in the second half of the year, ending 2021 with an average
exchange rate of 75.2 cents compared to 69.1 cents in 2020.
The Group hedges a portion of its US dollar sales to assist in
managing exchange rate exposure, which is detailed on page 18
of this report. Foreign exchange impacts on operating costs,
mainly related to Sierra Rutile operations, are included in the
overall movement in unit cost of goods sold.
Cash costs of production increased by $21 million as more
HMC was transported for processing at the Narngulu mineral
separation plant, drawing down on stockpiles that had built
through 2020. Mining and concentrating costs were lower
with less HMC produced at Jacinth-Ambrosia. Cataby HMC
production was consistent with 2020. Transport costs were also
higher as the pandemic constrained logistics globally.
Unit cost of goods sold decreased to $916 per tonne compared
to $1,032 per tonne in 2020. This reflected a decrease in cost
from US$1,455 per tonne at Sierra Rutile in 2020 to US$1,244
per tonne in 2021, as production increased 8% with improved
mining performance and favourable grade.
Australian operations unit cost of goods sold increased 6% to
$774 per tonne driven by a change in sales mix, as well as mining
of lower grade at the Jacinth North deposit commencing in the
second quarter.
Idle, restructure, and other non-production costs increased
with the major maintenance outage of synthetic rutile kiln 2 (SR2)
early in 2021. Sembehun study costs were also expensed during
the year.
Costs for ongoing maintenance and land management costs
for idle plant and operations at Tutunup South, Murray Basin and
the United States decreased 15% from 2020 as rehabilitation
continues to progress into late stages.
Corporate cost reflects expenses to operate, govern and grow
the business. Increased costs reflect activity associated with
growth projects, including rare earths; increased labor costs,
including payment of incentives at target metrics which were not
achieved in 2020; and higher insurance costs.
Major projects, exploration, and innovation costs decreased
with the successful conclusion of the Balranald T3 field trials in
2020, which were expensed as research and development costs.
There was an increase in innovation costs as Iluka explores new
opportunities in rare earths and mineral sands extraction.
Government royalties increased in line with higher sales revenue
as markets improved and customers took more product.
Tax expense had an effective tax rate of 28% in 2021 as Iluka
recorded gains in profit or loss related to the unwind of the
rehabilitation liabilities in Sierra Leone and the United States,
which do not give rise to deferred tax. The equity-accounted
profit for the Group’s investment in Deterra Royalties is not
assessable and the dividends received were fully franked,
resulting in an effective tax rate lower than the corporate tax rate.
The tax rate applicable in Australia remained at at 30%.
Iluka Resources Limited, Annual Report 2021
21
FINANCIAL AND
OPERATIONAL REVIEW
SALES AND MARKETS
Zircon
High-Grade Titanium Feedstocks
The recovery in demand for zircon witnessed late in 2020 gained
momentum in 2021 with strong demand for Iluka’s products
evident across multiple market sectors in many geographies.
The ceramics market, which accounted for 57% of Iluka’s annual
sales, experienced sustained growth despite supply chain
challenges impacting shipments and increasing costs of raw
materials. Chinese tile production rates returned to pre-pandemic
levels in the first half despite a decline in exports. European (Spain
and Italy) and Indian producers increased exports to markets
more recently serviced by Chinese producers. Growth in ceramic
manufacturing is expected to continue into 2022, particularly in
emerging markets, such as India, with several new production
facilities established.
Strong growth in the photovoltaic industry drove demand for
refractories utilised in specialised glass production in China
in turn leading to demand for fused zirconia. Fused zirconia
producers in China and the United States operated at high rates
through 2021 creating strong demand for Iluka’s premium grade
zircon products.
In other sectors, zirconium chemical production was consistent
with 2020, however over the course of the year exports increased
suggesting an improvement in downstream market conditions.
China has led a recovery in demand from the foundry markets
with car manufacturing plants returning to pre-pandemic
production levels.
Market conditions ensured that Iluka’s total annual zircon sales
were fully committed by the third quarter. Through the course
of 2021, Iluka ramped up production, and sales, of zircon-in-
concentrate (ZIC) in response to increased demand.
Zircon, characterised by many countries as a critical mineral,
remains in demand as a key input to the manufacture of modern
materials; either directly in the case of sanitaryware desperately
needed to improve the standards of living in many developing
nations, or as an enabler to the efficient production of critical
items such as photovoltaic cells or near final shape castings. Yet
the supply side is characterised by declining grades from existing
operations, unreliable supply from some jurisdictions, and limited
new projects with meaningful zircon supply of an acceptable
quality.
With continued focus on maintaining a sustainable pricing
environment, Iluka achieved considerable pricing traction over
the course of 2021. Iluka’s weighted average price (FOB basis)
for zircon premium and standard in Q4 2021 was US$1,590 per
tonne, increasing from US$1,291 per tonne in Q4 2020, despite
significant increases in supply chain costs.
22
Iluka Resources Limited, Annual Report 2021
High grade titanium feedstocks were in high demand throughout
2021 as a result of continued growth in underlying demand in the
majority of end markets.
Emerging strongly from 2020, pigment market demand was
consistently strong over 2021 and is expected to remain strong
into 2022. Sales to this market segment accounted for 84% of
Iluka’s 2021 sales volumes of High Grade Ore.
In the growing Chinese market, despite pigment producers
experiencing energy shortages and logistical challenges, demand
remained high throughout the year. Producers in the United
States also experienced production challenges with continued
shortages of chlorine, an essential input to chloride pigment
production, driving demand for Iluka’s high grade feedstocks that
help to reduce reliance on chlorine and maximise throughput.
High energy costs and growth in raw material prices was also a
challenge for European producers who struggled to keep up with
demand.
On the supply side, ongoing production challenges impacting
feedstock supply from producers in South Africa and Iluka’s
announcement of the potential suspension of operations at
Sierra Rutile created some uncertainty in the market, all at time
when demand for feedstocks across all regions was outpacing
supply.
Throughout the year welding markets remained very strong
driven in part by spending on infrastructure in both developing
and mature economies. These buoyant conditions saw demand
for natural rutile outpace supply; a trend that seems likely to
continue. There was evidence of a recovery in the titanium metal
and sponge markets as airlines recommenced ordering aircrafts,
however this sector is yet to return to pre-pandemic levels.
Similar to zircon, by the third quarter, all of Iluka’s synthetic rutile
and natural rutile were under contract. Iluka’s weighted average
price for rutile (excluding HYTI and TIC) in 2021 was US$1,264 per
tonne, up 3.6% from 2020.
Monazite
Iluka sold 62 thousand tonnes of a 20% monazite-zircon
concentrate in 2021 completing contractual obligations from
Phase 1 of the Eneabba development. No further sales of this
product will occur, with the existing stockpile reserved for further
concentrating under Phase 2 of the Eneabba development.
ZIRCON
RUTILE(1)
SYNTHETIC
RUTILE
ILMENITE
MONAZITE
Sales volumes (kt)
Sales volumes (kt)
Sales volumes (kt)
Sales volumes (kt)
Sales volumes (kt)
380 379
355
264
233
274
240
200
207
244
162
215 207
306
256
225
203
190
171
116
17
18
19
20
21
17
18
19
20
21
17
18
19
20
21
17
18
19
20
21
Notes:
(1)
Rutile sales and production volumes include HYTI.
Weighted Average Received Prices US$/t FOB
Zircon (premium and standard)
Zircon (all products)(2)
Rutile (excluding HYTI)(3)
Synthetic rutile(4)
Notes:
2017
958
940
790
-
2018
1,351
1,321
952
-
2019
1,487
1,380
1,142
-
2020
1,319
1,217
1,220
-
2021
1,414
1,330
1,264
-
(2)
(3)
(4)
Zircon prices reflect the weighted average price for zircon premium, zircon standard and zircon-in-concentrate. The prices for each product vary
considerably, as does the mix of such products sold period to period. In the year to date 2021 the split of zircon sand and concentrate by zircon sand-
equivalent was approximately: 76%:24% (2020 full year: 78%:22%).
Excluded from rutile sales prices is a lower value titanium dioxide product, HYTI, that typically has a titanium dioxide content of 70 to 90%. This product
sells at a lower price than rutile, which typically has a titanium dioxide content of 95%.
Iluka’s synthetic rutile sales are underpinned by commercial offtake arrangements. The terms of these arrangements, including the pricing
arrangements are commercial in confidence and as such not disclosed by Iluka. Synthetic rutile, due to its lower titanium dioxide content than rutile, is
priced lower than natural rutile.
Zircon - Iluka is a leading global producer of zircon. Providing fit-for-purpose products to a wide range of customers around the
world, Iluka’s products range from premium grade zircon to ZIC. Zircon is valued for its opacifying and resistance properties; and is
used primarily in the manufacture of ceramics, including tiles and sanitary-ware, as well as in casting and foundry applications. It is
also used in the manufacture of zirconium chemicals, which have a diverse range of applications, from catalytic converters to fuel
cells and water purification.
High-Grade Titanium Feedstocks - Iluka is the world’s largest producer of natural rutile and a major producer of synthetic rutile,
an upgraded, value added form of ilmenite. Owing to their high titanium content, these products are referred to as high-grade
titanium dioxide feedstocks. Titanium dioxide is a white pigment largely used to in the production of paints, coatings, plastics and
more, providing a UV protective and non-toxic opacifier that delivers long lasting performance results. It is also used in titanium
metal and welding due to its high-strength and anti-corrosive properties.
Monazite - The rare earths baring minerals monazite and xenotime are routinely produced as by-products of Iluka’s mineral sands
processing activities. Rare earths have unique catalytic, metallurgical, nuclear, electrical, magnetic and luminescent properties.
The rare earths in Iluka’s monazite are essential for the production of ultra-strong permanent magnets used in the motors that
power electric vehicles and in the generators used in wind turbines, as well as other sustainable development technologies.
Iluka Resources Limited, Annual Report 2021
23
SIERRA
LEONE
AUSTRALIA
At Jacinth-Ambrosia in South Australia, mining of lower grade ore
at the Jacinth North deposit commenced in the second quarter
and will continue for a period of approximately 12 months. Higher
HMC production levels seen over the second half were a result
of increased ore treatment volumes, ore grade and recovery. A
total of 264 thousand tonnes of HMC was produced in 2021.
In late December an outbreak of COVID-19 on site resulted in a
24 hour plant shutdown. Following advice from South Australian
health authorities, Iluka enacted a ‘circuit breaker’ mine closure
to reduce the likelihood of further transmission; operations were
able to restart with limited impact on production.
SIERRA LEONE
Sierra Rutile continued to be impacted by the COVID-19
pandemic despite the implementation of a series of safety,
isolation and testing measures. Acute operational challenges
impacted efforts to achieve operational efficiency in the first half,
amplified by lower HMC grade affecting rutile production.
Total HMC production was 301 thousand tonnes, with 129
thousand tonnes of rutile produced.
In May, Iluka provided six months notice of its intention to
temporarily suspend operations at SRL, effective 19 November
2021. Iluka withdrew its notice to suspend operations in January
2022 following operational improvements and ratification by the
Parliament of Sierra Leone to a number of adjustments to Sierra
Rutile’s fiscal regime (for Area 1).
PRODUCTION & OPERATIONS
AUSTRALIA
Iluka’s mineral sands mining operations are focused on
sustainably and safely optimising production throughput to meet
increasing market demand and deliver reduced operational costs.
The company’s Australian sites returned to maximum operational
settings early in the year with levels maintained throughout 2021.
The Narngulu mineral separation plant (MSP) in Western Australia,
returned to full processing capacity in January, having operated
under adjusted settings in 2020 to reduce zircon stock in line
with markets that were impacted by the COVID-19 pandemic.
Narngulu processed 623 thousand tonnes of material to produce
320 thousand tonnes of zircon, including ZIC, and 67 thousand
tonnes of rutile.
In April impacts of the tropical Cyclone Seroja resulted in a three
day shutdown at both Narngulu MSP and Cataby mine site in
Western Australia.
The annual total heavy mineral concentrate (HMC) produced at
Cataby was 541 thousand tonnes; higher HMC production in the
second half of the year was a result of increased ore treatment
volumes, ore grade and recovery. Cataby commenced a project
to debottleneck its mining unit, increasing mining unit production
rates and reduce mining costs from these operations by more
effectively managing higher clay and oversize material. This
project will be delivered in late 2022.
Iluka’s synthetic rutile kiln 2 (SR2) in Capel, Western Australia,
underwent a planned production suspension in February and
March to manage synthetic rutile stock levels; and refurbish and
reline the kiln. The initial suspension was planned for a period of
three to six months, however returned to full production by
1 April in response to market conditions. The kiln operated at full
capacity for the remainder of the year, with 199 thousand tonnes
of synthetic rutile produced in 2021.
1,106k
TONNES OF HMC
PRODUCED
1,235k
TONNES OF HMC
PROCESSED
24
Iluka Resources Limited, Annual Report 2021
ZIRCON
RUTILE(1)
SYNTHETIC
RUTILE
ILMENITE
MONAZITE
Production volumes (kt)
Production volumes (kt)
Production volumes (kt)
Production volumes (kt)
Production volumes (kt)
349
312
322
324
302
185
184
173
163
227
564
220
211
197
448
395
456
319
199
196
17
18
19
20
21
17
18
19
20
21
17
18
19
20
21
17
18
19
20
21
Notes:
(1)
Rutile sales and production volumes include HYTI.
Cash costs
Cash costs of production
Unit cash production cost per tonne Z/R/SR produced(2)
Unit cost of goods sold per tonne Z/R/SR sold
Jacinth-Ambrosia / Mid West
Cataby / South West
Australia Total
Sierra Rutile
Total
Notes:
(2)
Cash cost of production excluding by-products, divided by Z/R/SR production.
$m
$/t
$/t
2021
579.2
777
631
909
774
1,659
916
2020
% change
558.7
918
592
915
730
2,015
1,032
(3.7)
15.3
(6.5)
0.1
(6.0)
17.7
11.5
Mineral sands operations results
$ million
Jacinth-Ambrosia / Mid West
Cataby / South West
SRL
Idle Ops
Support and corporate
Elimination - interco sales
Total
Revenue
Underlying EBITDA
EBIT
2021
599.6
639.1
232.7
14.4
-
-
2020
389.0
300.4
223.1
34.5
-
-
2021
383.1
339.7
20.9
3.2
2020
270.2
163.1
26.4
10.1
2021
335.0
241.1
17.1
33.7
2020
245.5
120.1
(40.8)
11.0
(113.0)
(127.8)
(107.3)
2,203.4
-
-
-
-
1,485.8
947.0
633.9
342.0
519.6
2,539.2
Iluka Resources Limited, Annual Report 2021
25
FINANCIAL AND OPERATIONAL REVIEW
OPERATIONS
JACINTH-AMBROSIA/MID WEST
2021
2020
% change
Production volumes
Zircon
Rutile
Total Z/R production
Ilmenite
Monazite concentrate
Total saleable production
HMC produced
HMC processed
Unit cash cost of production - Z/R/SR
Mineral Sands revenue
Cash costs of production
Inventory movement - cash
Restructure, idle capacity and other non-production costs
Government royalties
Marketing and selling costs
Asset sales and other income / (expenses)
EBITDA
Depreciation and amortisation
Inventory movement - non-cash
Rehabilitation costs for closed sites
EBIT
kt
kt
kt
kt
kt
kt
kt
kt
$/t
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
271.2
30.3
301.5
127.7
57.7
486.9
264
453
563
599.6
(169.6)
(7.1)
(2.9)
(21.6)
(15.2)
(0.1)
383.1
(43.8)
5.4
(9.7)
114.9
24.5
139.4
67.7
44.4
251.5
357
232
940
389.0
(131.0)
26.7
(3.2)
(6.4)
(4.9)
-
270.2
(36.2)
9.8
1.7
335.0
245.5
136.0
23.7
116.3
88.6
30.0
93.6
(26.0)
95.4
(40.1)
54.1
29.5
-
(9.4)
-
-
-
41.8
21.0
(44.9)
-
36.5
Jacinth-Ambrosia operated at full capacity throughout the year
in the Jacinth North deposit, with 10.3 mt of ore mined producing
264 kt HMC. COVID-19 interruptions impacted Jacinth-Ambrosia
in late December and the mine was shut down temporarily, with
the disruption having a limited impact on production before
returning to full operational settings by the end of December.
Mining will return to the Ambrosia deposit in H2 2022.
Marketing and selling costs grew as global shipping prices
reached record highs in 2021, impacting sea freight expenses.
Government royalties for Jacinth-Ambrosia are predominantly
calculated on a mine gate departure, with the higher volumes
of stockpiled HMC that was transported to Narngulu in the year
increasing the royalty payable.
Steady demand from China and growing demand from Europe
resulted in a drawdown of customer inventories from 2020 and a
54% increase in mineral sands revenue.
Cash costs of production rose with the increase in production
and higher transportation costs as stockpiled HMC at Jacinth-
Ambrosia was shipped to the Narngulu mineral separation plant
to be processed into finished goods to meet customer demand.
26
Iluka Resources Limited, Annual Report 2021
CATABY/SOUTH WEST
Production volumes
Zircon
Rutile
Synthetic rutile
Total Z/R/SR production
Ilmenite - saleable and upgradeable
Total saleable production
HMC produced
HMC processed
Unit cash cost of production - Z/R/SR
Mineral sands revenue
Cash costs of production
Inventory movement - cash
Restructure, idle capacity and other non-production costs
Government royalties
Marketing and selling costs
Asset sales and other income
EBITDA
Depreciation and amortisation
Inventory movement - non-cash
Rehabilitation costs for closed sites
EBIT
Cataby mine operated at full capacity throughout the year
producing 541 kt HMC. In Q1, SR2 was suspended to manage
synthetic rutile stock levels and refurbish and reline the kiln. The
kiln has subsequently operated at full capacity since 1 April.
Mineral sands revenue increased as synthetic rutile sales
recovered, with 306 kt sold in 2021 (2020: 116 kt), in part due to
resumption of purchases by Chemours in line with contracts.
The significant drawdown of inventory that built through 2020
resulted in increased inventory movement as inventory balances
decreased.
Cash costs of production decreased by 9% on lower mining
costs and synthetic rutile production. Mining volumes were lower
at the Cataby mine due to lower runtime from the impact of lower
ore grades in line with the mining sequence and the impact of
2021
2020
% change
kt
kt
kt
kt
kt
kt
kt
kt
$/t
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
48.9
37.0
198.7
284.6
383.9
668.5
541
470
749
639.1
(212.5)
(59.5)
(7.7)
(11.2)
(8.9)
0.4
339.7
(81.0)
(16.6)
(1.0)
241.1
58.8
27.9
227.4
314.1
342.4
656.5
520
483
739
300.4
(232.2)
112.6
(3.3)
(6.8)
(7.7)
0.1
163.1
(72.3)
29.1
0.2
120.1
(16.8)
32.6
(12.6)
(9.4)
12.1
1.8
4.1
(2.7)
1.4
112.7
(8.5)
-
133.3
64.7
15.6
-
108.3
12.0
-
-
100.7
Tropical Cyclone Seroja earlier in the year, while synthetic rutile
production costs were lower due to SR2 planned suspension,
also increasing idle costs relative to 2020.
Marketing and selling costs were higher with increased
sea freight.
Government royalties increased in line with increased sales and
royalties on monazite processed out of Eneabba.
Iluka Resources Limited, Annual Report 2021
27
FINANCIAL AND OPERATIONAL REVIEW
OPERATIONS
SIERRA RUTILE
Production volumes
Zircon
Rutile
Total Z/R production
Ilmenite
Total production
HMC produced
HMC processed
Unit cash cost of production - Z/R
Mineral sands revenue
Cash costs of production
Inventory movement - cash
Restructure, idle capacity and other non-production costs
Government royalties
Marketing and selling costs
Asset sales and other income
EBITDA
Depreciation and amortisation
Inventory movement - non-cash
Rehabilitation and holding costs for closed sites
Write-down expense
EBIT
2021
2020
% change
kt
kt
kt
kt
kt
kt
kt
kt
$/t
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
4.1
129.3
133.4
52.1
185.5
301
312
1,402
232.7
6.6
120.2
126.8
45.8
172.6
306
293
1,450
223.1
(187.0)
(183.8)
(4.0)
(15.1)
(4.7)
(1.0)
-
20.9
(43.2)
(1.0)
40.4
-
17.1
7.7
(5.3)
(8.6)
(3.4)
(3.3)
26.4
(72.2)
1.9
4.0
-
(40.8)
(37.9)
7.6
5.2
13.8
7.5
(1.7)
6.3
(3.3)
4.3
1.7
-
-
(45.3)
(70.6)
-
(20.8)
(40.2)
-
-
0.0
-
Sierra Rutile experienced operational challenges in H1, including
the ability to maintain specialised skillsets in-country, which
impacted on production delivery. Operational performance
improved during H2, with operational consistency delivered from
July and average rutile production of 12 kt per month since then.
Mineral sands revenue increased by 4% as Sierra Rutile’s
production increased over 2020 on improved mining
performance and runtime in H2 2021.
Cash costs of production are comparable to 2020 despite
higher production levels, although they have benefited from
a stronger Australian dollar on translation of the US dollar
denominated cost base.
Other non-production costs include expenses for ongoing
Sembehun studies as well as costs incurred in managing
COVID-19.
An accounting gain was recognised in rehabilitation costs as
updated estimates for future rehabilitation of Area 1 operations
decreased the liability, with the adjustment taken directly to profit
and loss.
Depreciation costs decreased in 2021 as Area 1 operations near
end of life.
28
Iluka Resources Limited, Annual Report 2021
IDLE OPERATIONS (UNITED STATES/MURRAY BASIN)
Production volumes
Zircon
Mineral sands revenue
Cash costs of production
Inventory movement - cash
Restructure, idle capacity and other non-production costs
Government royalties
Marketing and selling costs
Asset sales and other income
EBITDA
Depreciation and amortisation
Inventory movement - non-cash
Rehabilitation and holding costs for closed sites
EBIT
2021
2020
% change
-
4.9
-
14.4
(10.0)
3.6
(7.7)
(0.5)
1.5
1.9
3.2
(0.2)
(0.4)
31.1
33.7
34.5
(11.7)
(4.7)
(9.1)
(0.5)
(0.2)
1.8
10.1
(0.4)
(0.9)
2.2
11.0
(58.3)
(14.5)
-
(15.4)
-
-
5.6
(68.3)
(50.0)
(55.6)
-
206.4
kt
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
Discontinued and idle operations reflect rehabilitation obligations
in the United States (Florida and Virginia) and certain idle assets
in Australia (Murray Basin). Revenue in 2021 represented sale
of remnant stockpiles in the Murray Basin. The United States
successfully sold its remaining inventory in 2020 and the Murray
Basin continues to sell down the last of its inventory.
Rehabilitation costs reflected a significant decrease in the
United States rehabilitation provision, with changes for closed
sites taken directly to profit and loss. The reduction comes
as Virginia operation discussions with the regulator reached
a successful conclusion and agreements were reached with
landholders.
Cash costs of production were largely driven by activities
associated with product transportation and processing costs for
Murray Basin inventory.
Iluka Resources Limited, Annual Report 2021
29
FINANCIAL AND OPERATIONAL REVIEW
MOVEMENT IN NET (DEBT) CASH
Movement in net debt ($million)
H1 2021
H2 2021
H1 2020
H2 2020
Opening net cash (debt)
Operating cash flow
MAC royalty
Exploration
Interest (net)
Tax
Capital expenditure
Dividends received - Deterra
Government grants receieved / (repaid)
Principal element of lease payments AASB 16
Asset sales
Share purchases
Free cash flow
Dividends
Net cash flow
Exchange revaluation of USD net debt
Amortisation of deferred borrowing costs
Increase in net cash/(debt)
Closing net cash/(debt)
50.2
306.6
-
(3.8)
(0.8)
(84.7)
(16.7)
2.6
(13.9)
(3.8)
0.1
(6.3)
179.3
(7.9)
171.4
(1.2)
(0.3)
169.9
220.1
220.1
221.1
-
(4.2)
(0.3)
(65.2)
(36.9)
12.2
-
(2.8)
1.9
(5.6)
120.2
(47.4)
72.8
2.3
(0.3)
74.7
294.8
43.3
96.7
41.6
(5.5)
(1.0)
(39.4)
(49.6)
-
4.3
(4.8)
3.9
-
46.2
(32.6)
13.6
5.5
(0.3)
18.8
62.1
62.1
86.0
50.6
(4.5)
(1.5)
(125.3)
(21.6)
-
9.6
(4.5)
1.2
-
(10.0)
-
(10.0)
(1.6)
(0.3)
(11.9)
50.2
Net cash increased to $295 million as operating cash flows
recovered and Iluka sought to maintain a strong balance sheet,
with a growing pipeline of potential investment opportunities.
Operating cash flow of $528 million reflects a strong underlying
EBITDA, with mineral sands markets recovering to pre-pandemic
levels.
There were no cash flows from discontinued operations from
the MAC royalty due to the demerger of Deterra Royalties
in November 2020. The Group received $14.8 million of fully
franked dividends from Deterra in its inaugural interim and final
distributions to shareholders.
Iluka invested $54 million on capital developments during
2021, including advancing Eneabba Phase 2; planned mine
development at Cataby; commencing the restart of SR1 at Capel;
early works and studies on other development options; and
sustaining capital at Australian sites.
A dividend of 12 cents per share was paid in September and Iluka
declared a full year dividend of 12 cents per share, fully franked,
to be paid on 7 April 2022.
30
Iluka Resources Limited, Annual Report 2021
NON-IFRS FINANCIAL INFORMATION
2021
Mineral sands revenue
AASB 15 freight revenue
JA/MW
599.6
39.5
C/SW
639.1
19.5
US/MB
14.4
3.9
SRL
232.7
10.2
Expl &
Other
-
-
Expenses
(256.0)
(318.9)
(15.1)
(222.0)
(55.9)
Share of profit in associate
FX
Corporate costs
Underlying EBITDA
Depreciation and amortisation
Inventory movement
- non-cash
Changes in rehabilitation
recognised in profit or loss
Gain on re-measurement of Put
Option
Impairment
EBIT
Net interest costs
Rehab unwind and other finance
costs
Profit before tax
Segment result
383.1
(43.8)
339.7
(81.0)
5.4
(16.6)
3.2
(0.2)
(0.4)
20.9
(43.2)
(1.0)
(9.7)
(1.0)
31.1
40.4
-
-
-
-
335.0
241.1
(0.3)
(3.1)
331.6
331.6
(0.5)
(3.3)
237.3
237.3
-
-
33.7
-
(1.6)
32.0
32.0
-
-
17.1
(0.1)
(0.9)
16.1
16.1
(55.9)
(0.2)
-
-
-
(6.3)
(62.4)
-
-
(62.4)
n/a
Corp
-
-
(0.4)
18.4
7.6
(64.3)
(38.7)
(2.8)
-
-
(3.4)
-
(44.9)
(4.8)
-
(49.7)
n/a
Group
1,485.8
73.1
(868.3)
18.4
7.6
(64.3)
652.3
(171.2)
(12.6)
60.8
(3.4)
(6.3)
519.6
(5.7)
(8.9)
505.0
617.0
Iluka Resources Limited, Annual Report 2021
31
FINANCIAL AND OPERATIONAL REVIEW
PROJECTS
The company develops and gates projects in a disciplined manner towards execution subject to acceptable progress in the following
areas: (i) confidence in satisfactory project risk-return attributes, (ii) high level of strategic alignment, and (iii) sequenced to take advantage
of the economic and market outlook.
ENEABBA
WESTERN AUSTRALIA
Phase 1 of the development commenced operating in 2020.
This produced a mixed monazite-zircon concentrate, with the
monazite fraction at approximately 20%. A total of 44 thousand
tonnes of Phase 1 material was sold in 2020 and a further 62
thousand tonnes in 2021. This concluded Phase 1 and no further
sales of this product will occur.
Phase 2 construction commenced in 2021 and is scheduled for
commissioning by first half 2022. This will produce two separate
concentrates: a zircon-ilmenite concentrate, to be further
processed as part of Iluka’s traditional mineral sands operations
at Narngulu; and a dedicated 90% monazite concentrate
suitable as a direct feed to a rare earths refinery. The monazite
concentrate could be sold or could form the basis of feedstock
for Iluka’s own rare earth refinery.
Phase 3 involves the development of a fully integrated rare earths
refinery at Eneabba. In 2021 work progressed on the Feasibility
Study for Phase 3, with completion planned for Q1 2022(1). The
refinery would have the capability to process feedstocks from
within Iluka’s portfolio as well as concentrates supplied by third
parties, producing separated rare earth oxides.
If it existed today, Eneabba Phase 3 would be the only operational
refinery of its type in the Western world. Phase 3 presents an
opportunity to establish a strategic processing hub for the further
growth of Australia’s rare earths industry.
In May 2021, a letter of support from the Australian Government
set out the alignment of Iluka’s development plans and the
Government’s policy objectives regarding critical minerals
and modern manufacturing. The letter also acknowledged
the potential for risk sharing arrangements with Government,
including Iluka seeking a non-recourse loan facility from Export
Finance Australia.
Development Stage:
Project execution
The world’s highest grade rare earths operation.
Iluka routinely produces the rare earth baring minerals monazite
and xenotime as by-products of mineral sands processing
activities. Since the early 1990s the company has stockpiled
these minerals at a former mining void at Eneabba, Western
Australia. The Eneabba project involves the reclaiming,
processing and sale of this strategic stockpile. Iluka has taken
an incremental approach to Eneabba’s development comprising
three key phases.
Notes:
(1)
Final Investment Decision remains subject to the feasibility study, the terms of any risk sharing arrangements agreed with the Australian Government
and Iluka Board approval.
32
The Eneabba Stockpile containing the rare earth baring minerals monazite and xenotime.
Iluka Resources Limited, Annual Report 2021
BALRANALD
NEW SOUTH WALES
WIMMERA
VICTORIA
Development Stage:
Definitive Feasibility Study
Development Stage:
Preliminary Feasibility Stage
Balranald is a rutile-rich deposit in the northern Murray Basin,
New South Wales. Owing to its relative depth, Iluka is assessing
the potential to develop the deposit via an innovative, internally
developed underground mining technology.
The technology has the potential to enable access to the
below surface ore body as an alternative to traditional open
pit operation; and is potentially applicable to other sub surface
deposits. Iluka completed a third trial (T3) of the underground
mining method in late 2020 and associated analysis of the data
obtained was completed by July 2021. This confirmed the
effectiveness of the method and validated key elements of the
mining unit design.
In August 2021 the definitive feasibility study for Balranald was
approved by Iluka’s Board. Work proceeded in accordance with
the study execution plan for the remainder of the year. A final
investment decision is planned for Q4 of 2022.
The Balranald project is a significant development option that
could provide a material source of high quality zircon, rutile and
ilmenite, including suitable feedstock for Iluka’s synthetic
rutile kilns.
Wimmera is a large-scale, fine-grained heavy mineral sands
deposit in the Victorian Murray Basin, with the potential to
support the long term supply of ceramic-grade zircon and rare
earths. The WIM100 deposit is the initial, primary focus of Iluka’s
Wimmera project, however Iluka also holds tenure over other
similar deposits in the Wimmera region.
One characteristic shared by the fine grained mineral sands
deposits located in Western Victoria is higher levels of uranium
and thorium in their zircon. Absent a processing solution to
reduce these impurities, the zircon is ineligible for sale into most
end-markets, including the ceramics market which accounts
for approximately 50% of zircon’s global demand. Iluka is
progressing a novel, internally developed processing solution to
reduce the impurities contained within the zircon.
Work in 2021 focused on testing and validating the processing
solution, and progressing baseline environmental studies.
If Iluka’s novel technology proves successful it will likely be
applicable to other types of challenging zircon beyond Wimmera
and Western Victoria including, for example, converting Iluka’s
stocks of chemical zircon to premium grade. In November, Iluka
declared a Mineral Resource at the Wimmera deposits (WIM100,
WIM50 and WIM50 North) reflecting the company’s confidence
in progressing its processing solution. Equipment to pilot test
the solution on a larger scale was commissioned in Q4. Test
work to determine the ideal process conditions and scale up
design criteria, which will ultimately inform economic feasibility, is
underway and will continue in the first half of 2022.
The Wimmera project’s rare earth bearing minerals are very
similar to those stockpiled at Eneabba and could supplement
feed to Iluka’s potential downstream refining activities at
Eneabba in future years.
Iluka Resources Limited, Annual Report 2021
33
FINANCIAL AND OPERATIONAL REVIEW
SEMBEHUN
SIERRA LEONE
SR KILN 1 RESTART AND SOUTH WEST
DEPOSITS
WESTERN AUSTRALIA
Development Stage:
Preliminary Feasibility Study
Development Stage:
SR Kiln 1 – Execute
South West deposits – Preliminary
Feasibility Study
The Sembehun group of deposits are situated 20 to 30
kilometres north-west of the existing Sierra Rutile operations.
Sembehun is one of the largest and highest quality known rutile
deposits in the world.
A field trial of hydraulic mining was completed in the second
quarter of 2021 and demonstrated viability as an ancillary
mining method at Sembehun. Iluka continues to progress work
on a feasibility study for Sembehun.
Iluka has remained open to investigating transaction structures
that maximise the potential for Sembehun to be developed
for the benefit of all stakeholders. The process to identify
third parties willing to invest in the Sembehun development
continued in 2021 and was broadened to include consideration
of a potential demerger.
SR1 is located adjacent to Iluka’s operational kiln, SR2. The SR1
restart decision was approved by the Iluka Board in August.
This is a capital efficient, incremental increase in synthetic
rutile production, delivering high grade titanium feedstocks
with speed into a supply constrained market. The kiln has been
in care and maintenance since 2009 and is planned to be
operational by end of 2022.
The SR1 restart represents a low risk, growth opportunity for
Iluka, expanding synthetic rutile production by approximately
one third. The initial kiln campaign is planned for 24 months,
with feedstock secured from internal and external sources.
Options for further extension, subject to feedstock availability
and market conditions, will continue to be evaluated.
Work in 2021 focused on the detailed planning, design and
commencement of the kiln’s refurbishment. All long lead items
were ordered, recruitment of staff commenced and site works
progressed as planned.
Iluka retains a number of tenements in south west Western
Australia containing chloride ilmenite suitable as a feedstock
to the synthetic rutile kilns. The preliminary feasibility study to
develop these deposits continued in 2021.
34
Iluka Resources Limited, Annual Report 2021
ATACAMA
SOUTH AUSTRALIA
EUSTON
NEW SOUTH WALES
Development Stage:
Preliminary Feasibility Study
Development Stage:
Preliminary Feasibility Study
Atacama is a satellite deposit located approximately five
kilometres from Iluka’s existing operation at Jacinth-Ambrosia.
The project is a logical extension for the operation with the
potential to supplement and extend zircon production, utilising
the existing plant and infrastructure.
The Euston deposit is a traditional mineral sands deposit that
has been held by Iluka for some time. Located in western New
South Wales, not far from Balranald, the deposit has significant
zircon and rutile assemblages, with ilmenite feedstock as a
possible supplement for Iluka’s synthetic rutile kilns.
The deposit would also provide a meaningful supply of ilmenite,
subject to a processing solution to address impurities. Work in
2021 focused on determining such a technical solution, with
pleasing progress made.
The Euston project was added to Iluka’s development
pipeline in the first half of 2021. The development would be a
traditional open cut, dry mine. Work across the year focused on
progressing the preliminary feasibility study.
Iluka Resources Limited, Annual Report 2021
35
FINANCIAL AND OPERATIONAL REVIEW
EXPLORATION
Exploration opportunity assessment is managed
through a structured, stage-gated process considering
a combination of technical and economic factors, taking
a risk-weighted approach. Near mine exploration seeks
to add value in areas adjacent to Iluka’s existing assets,
where synergies can deliver additional value through
mine life extension or progressive development. New
mine exploration focusses on identifying new high quality
mineralisation that can deliver a new operation and
longer term growth.
Please refer to the Ore Reserves and Mineral Resources
Statement section for changes and updates to
Resources on page 151-157.
GENERATION AND EXTERNAL
OPPORTUNITIES
Restrictions associated with COVID-19 and equipment
shortages heavily impacted upon Iluka’s ability to
complete field work. The company focused on identifying
opportunities within Australian and North American
jurisdictions to augment the existing project pipeline.
Drilling focused on testing two new mine targets, with
1,222 metres of drilling completed. Final decisions are
still pending, however it is anticipated that no follow up
work is warranted.
Iluka continued to progress the negotiation of a number
of Native Title Agreements across Western Australia,
South Australia and Victoria, a prerequisite to tenement
grant.
Following the generation of new conceptual targets a
number of new tenement applications were submitted.
UNITED STATES
Exploration activity within the United States focused on
drill testing of new mine opportunities across three main
regions located on the west coast, within the central
United States and on the eastern seaboard. A total of
107 holes were drilled for a total of 5,199 metres. Subject
to sample assay and further geological review, follow
up drilling is scheduled for the eastern and central US
targets during 2022.
AUSTRALIA
CANADA
During 2021, COVID-19 continued to impact the
implementation of field programmes. Activity primarily
centred around in-mine programmes in Western Australia
and project and feasibility programmes in Victoria, South
Australia and New South Wales.
At the Cataby operations in Western Australia, a total of
4,832m was drilled in 121 drill holes to expand existing
Resources and support mining operations.
Work at Atacama in South Australia and Euston in
New South Wales focused on specific geological,
geotechnical and metallurgical definition as part of
on-going feasibility assessments. Additional geological
investigations commenced at Balranald supporting the
definitive feasibility study.
Regional exploration was completed on the Alexandrina
and Ashville targets located within the Coorong district of
South Australia.
Results for the 2020 diamond drilling programme were
received during 2021. The massive hemo-ilmenite bodies
intersected by the drilling were found to contain low
levels of rutile only and were not confirmed as the source
for the abundant, rutile rich, massive ilmenite clasts
collected down-ice on surface. Whole rock geochemical
studies were undertaken to link the clasts to the drilled
in-situ bodies. Results remain under review.
SIERRA LEONE
Infill drilling of existing resources within Area 1 continued
throughout the year. A total of 3,338 metres of drilling
was completed in 375 drill holes, including a combination
of hollow flight auger and aircore drilling. This focused
on improving the geological models, collecting
metallurgical and geometallurgical data and improving
Resource confidence as part of the ongoing Life of Mine
programme.
36
Iluka Resources Limited, Annual Report 2021
Granted tenement position
as at 31 December 2021
Region
Eucla Basin, (SA)
Tenement applications
as at 31 December 2021
Approx. square
kilometres
Region
11,538
Eucla Basin (SA & WA)
Murray Basin (NSW & VIC)
3,039
Murray Basin (NSW & VIC)
Perth Basin (WA)
Other - Australia (QLD)
Sierra Leone
Sri Lanka
Other - International
Total
804
Perth Basin (WA)
1,799
Other - Australia (QLD)
559
107
0
Sierra Leone
Sri Lanka
Other - International
17,846
Total
Approx. square
kilometres
3,566
2,463
473
0
1,073
0
0
7,575
Exploration and Geology Expenditure 2021 - $9.3M
Administration & Others
$0.8M, 9%
Australian Exploration
$1.8M, 19%
Opportunity ID
$1.3M, 14%
International Exploration
$0.1M, 1%
Operations &
Project Support
$2.9M, 31%
Canada & US
$2.4M, 26%
Iluka Resources Limited, Annual Report 2021
37
INNOVATION AT ILUKA
Iluka’s investment in innovation is focused on strengthening operational, sustainability, processing and product outcomes.
The company also works towards addressing challenges faced by customers and the mineral sands industry. Through a
network of site based specialists and a central technology group, Iluka identifies, researches and develops solutions and
opportunities. Innovation priorities include:
•
•
•
•
•
improving the company’s environmental and social footprint;
delivering safe, low impact processing and operational outcomes;
providing solutions to resolve industry-wide challenges;
identifying and delivering market development opportunities; and
value co-creation with customers to establish new products and markets.
TECHNICAL EXPERTISE AND COLLABORATION
The company’s Metallurgical Test Facility (MTF) and analytical laboratories continuously develop and advance novel
technology and processing solutions. The MTF undertakes research and development on end-use products in
collaboration with project teams, customers and external institutions. Partnerships with industry bodies and universities
across various segments enables continuous improvement and ensures Iluka is well placed to operate as a safe,
responsible and sustainable supplier of critical minerals. Iluka’s continuous improvement programme, CORE, aims to
further improve safety, performance and productivity within the company by building employees skills and providing
support to identify, prioritise and execute improvements as part of ongoing work.
TRANSFORMING MINERAL SANDS
The mineral sands industry is facing increasing complexities: supply is depleting; deposits require novel mining and
processing techniques to extract a higher quality and value product; and customers have increasingly specific product
specifications.
ZIRCON
Across the zircon industry, new supply in particular is contaminated with higher levels of uranium and thorium. These
contaminants make the zircon ineligible for key end markets and customers facing increasing constraints with tighter
import controls imposed by nations. In 2021 Iluka made pleasing progress on novel processing technology for the
Wimmera project, technology that aims to reduce the uranium and thorium contaminants within the deposit’s zircon. This
technology will likely be applicable to other similar style deposits held by Iluka and other project proponents. If successful,
it will increase the supply outlook for high quality, low activity zircon and enable customers to meet their product quality
requirements while simultaneously minimising their waste.
+ Read more on the Wimmera project on page 33.
TITANIUM
Within the titanium dioxide industry, the supply outlook for high grade deposits has for some time been a known concern.
Iluka is progressing novel, internally developed technology that aims to safely, sustainably and economically extract mineral
sands from a high value deposit positioned below the relatively high water table at Balranald. Similar to the technology
being developed at Wimmera, commercialisation of this technology could unlock access to other challenging deposits,
delivering high grade feedstock essential for Iluka’s customers seeking to increase their yield while simultaneously lowering
their waste footprint.
+ Read more on the Balranald project on page 33.
RARE EARTHS
Following the development of the Australian Government’s Critical Minerals Strategy in 2019, Iluka expanded its
development plans surrounding the Eneabba project to include a fully integrated refinery (Eneabba Phase 3). In addition to
feedstocks from within Iluka’s portfolio, including the Wimmera project, the Phase 3 design has the capability to process
concentrates supplied by third parties. The establishment of the refinery, with its flexible processing design, could in turn
facilitate investment in new mining and concentrating developments, establishing a strategic processing hub for the
further growth of Australia’s rare earths industry.
+ Read more on the Eneabba and Wimmera project on pages 32-33.
38
Iluka Resources Limited, Annual Report 2021
2021 PROJECT PIPELINE
REGION AND
MINERAL
RESOURCE1
ASSESS
Scoping Study
Determine what
it could be
SELECT
Preliminary
Feasibility Study
Determine what
it should be
DEVELOP
Definitive
Feasibility Study
Determine what
it will be
EXECUTE
Project
execution
Deliver the
project
PRODUCING
Operate and
maximise
Grow and
improve
EUCLA BASIN
MURRAY BASIN
PERTH BASIN
SIERRA LEONE
342Mt @ 4.8% HM for
16Mt In Situ HM
1,570Mt @ 6.4% HM for
101Mt In Situ HM
967Mt @ 5.5% HM for
54Mt In Situ HM
752Mt @ 1.1% Rutile
for 8.1Mt In Situ Rutile
ESTIMATE
ACCURACY
RANGE
(AT END OF
PHASE)
-30% to +60%
EUSTON
SOUTH WEST
DEPOSITS
ATACAMA
WIMMERA
SEMBEHUN
-15% to +30%
BALRANALD
ENEABBA
(PHASE 3)
-10% to +15%
SR1 KILN
RESTART
ENEABBA
(PHASE 2)
JACINTH
AMBROSIA
CATABY
LANTI
ENEABBA
(PHASE 1)
GANGAMA
n/a
n/a
Resource estimate Reserve estimate Other
(1)
The Mineral Resource information on this indicative growth pipeline summary is extracted from the company’s previously published statements and are
available at: www.iluka.com.au. Iluka confirms that it is not aware of any new information or data that materially affects the information included in the
original market announcements and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters
underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. Iluka confirms that the form and context
in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. All Mineral Resource figures
are estimates. This table should be read in conjunction with the disclaimers and compliance statement on page 161.
Iluka Resources Limited, Annual Report 2021
39
SUSTAINABILITY REPORT
SUSTAINABILITY AT ILUKA
Guided by the Iluka Plan, Iluka’s approach to sustainability
is aligned with recognised voluntary principles and
frameworks; and contributes to the advancement of the
United Nations Sustainable Development Goals. Iluka
has a commitment to the integration of its approach to
sustainability into everyday business practices and to the
continuous improvement of the company’s sustainability
performance.
In 2021 a Board Sustainability Committee was established
to assist the Board in reviewing and approving the
company’s sustainability strategy, which is designed to
manage environmental, social and governance risks and
impacts. Responsibilities include oversight of performance
and compliance with legislation. The Committee also
monitors the effectiveness of company strategies, policies
and standards as they relate to sustainability.
Iluka’s Sustainability Report has been integrated into the
2021 Annual Report. This Report summarises Iluka’s
approach and performance for priority topics determined
by the 2021 sustainability materiality assessment. Case
studies and a separate 2021 Sustainability Data Book
outlining key performance information for 2021 and
historical reporting periods, are available online at www.
iluka.com.
Iluka reports with reference to the Global Reporting
Initiative (GRI) Standards for Sustainability Reporting and
the requirements of other select reporting frameworks and
standards.
Underpinning the company’s approach is Iluka’s
commitment to transparency, behaving ethically and
conducting business in accordance with high standards
of corporate governance through comprehensive systems
and processes.
During the year Iluka’s sustainability programme was
reviewed and a Group-wide three year sustainability
strategy was established with endorsement from Iluka’s
Executive and approval by the Board. Aligned to the
company purpose and Iluka Plan, the strategy focuses on
priorities that enable the company to meet its objective –
to deliver sustainable value.
Iluka’s goal is to be a safe, responsible and sustainable
supplier of critical minerals. To achieve this, the
sustainability strategy is structured around three pillars that
align to Iluka’s approach to delivering on its purpose:
•
•
•
Trusted by our people and communities: To
engage and build the capability of Iluka’s workforce
and to continue embedding a consistent and open
approach to relationships with the communities
where Iluka operates.
Responsible for our environment: Cognisant of the
impact of Iluka’s operations on the environment, to
focus on maximising efficiency in how the company
operates and to build on the reputation established
by Iluka’s rehabilitation practices.
Operating in and providing products for a low
carbon world: Recognising that the manner in
which Iluka operates and evolves its business can
reduce the company’s carbon footprint and that
Iluka’s products, particularly rare earths through the
potential development of a rare earths refinery at
Eneabba in Western Australia, provide Iluka with an
opportunity to support the transition to a low carbon
economy.
40
Iluka Resources Limited, Annual Report 2021
TRUSTED BY OUR PEOPLE AND COMMUNITIES
2.1
0
0
22%
6%
total TRIFR, representing a 25%
decrease in TRIFR from 2020
material incidents of bribery
and corruption
major social incidents across all Iluka
Group locations
total women representation across
Australian operations
Indigenous Australian representation in
Australian operations, including
25% at Jacinth-Ambrosia
$1.2M
contribution to community
development initiatives
HEALTH, SAFETY AND WELLBEING
Protecting the safety, health and wellbeing of Iluka’s people is
the company’s enduring and highest priority.
APPROACH
Iluka’s focus on health, hygiene, safety and wellbeing is centred
on creating a culture where all employees are leaders in
promoting a safe working environment. Iluka works to identify,
assess and control risks, reduce the potential for occurrences
of occupational illness and injury, as well as promote healthy
lifestyles.
This approach is supported by Iluka’s Health, Safety, Environment
and Community Management System, comprising Group
Standards that define minimum performance requirements
across 14 key areas. These include risk and hazard management;
contractor management; leadership and training; emergency and
crisis preparedness; and audit and assurance.
Group Standards require Iluka’s workforce to be proficient in
the requirements for a safe and healthy workplace for both
employees and contract partners. Employees are empowered to
actively make the workplace safe through task risk assessments
and participation in safety visits that consider the hidden risks
of tasks. Contract partners are selected, engaged and managed
to ensure they meet Iluka’s performance requirements through
prequalification and ongoing management and support during
their contract period.
Iluka’s health, safety and wellbeing programmes include:
•
The Safe Production Leadership programme is a back-to-
basics initiative, which equips frontline leaders with the skills
and knowledge of Iluka systems and requirements through a
programme of classroom based education and assessment
of competency.
•
•
•
The Safety Visit Programme is a tool for positive leadership
interaction, focused on behaviours and risk for specific
tasks. It aims to increase visibility of frontline leaders through
thematic discussions between the Iluka Leadership Team
and those undertaking the task, generating opportunities
to engage with all levels of the workforce to identify safety
improvements.
The Critical Control Management (CCM) programme
engages employees in the identification, elimination, control
and mitigation of fatal risk. CCM provides confidence
that health and safety material risks are being effectively
managed, through a combination of programme assurance,
good governance and improved frontline knowledge of
critical risks and controls.
The Occupational Hygiene Programme monitors potential
workplace exposures which may impact health. In line with
Iluka standards and guidelines, monitoring programmes
are based on qualitative and quantitative risk assessments.
Based on the operational risk profile, programmes typically
focus on monitoring exposure to airborne contaminants
including respirable dust, respirable crystalline silica,
inhalable dust, noise and radiation.
Iluka prioritises the mental health and physical wellbeing
of employees through a number of initiatives. A dedicated
wellbeing portal on the Iluka intranet provides employees with
resources, tools and techniques to maintain good mental health.
Iluka provides mental health first aid training for employees
and supervisors; and participates in awareness and fund
raising initiatives such as the Black Dog Ride and R U OK?
Day. Furthermore, Iluka’s Employee Assistance Programme is
a confidential support service that can help employees and
their immediate families address a wide range of work and life
challenges.
COMMUNITY HEALTH
The Sierra Rutile operations continue to provide medical
support to employees and their families through the Sierra Rutile
Clinic. The team of doctors, nurses, intensive care paramedics,
laboratory specialists and support staff provide health care for a
wide range of medical conditions including the delivery of
63 babies during 2021.
Community education on diseases such as typhoid, malaria,
polio, HIV and other sexually transmitted diseases is undertaken
by the staff of the Sierra Rutile Clinic to support efforts by the
Sierra Leonean Government to reduce communicable diseases
across the broader population. Sessions are generally held in
public forums such as local markets, community groups or other
gatherings, as well as through regular radio talkback sessions, to
ensure the broader community has access to the information.
Iluka Resources Limited, Annual Report 2021
41
SUSTAINABILITY REPORT
ILUKA’S ONGOING RESPONSE TO COVID-19
OUR PEOPLE
Central to Iluka’s business is safety and a commitment to
responsible operations. Iluka’s response to the COVID-19
pandemic has focused on protecting the health and wellbeing
of its people and communities while maintaining operational
continuity.
Across Iluka’s business, the Group Crisis Management team
and Site Emergency Management teams actively monitor and
coordinate responses to the dynamic environment resulting
from the pandemic. Each operation and corporate support
office maintains specific COVID-19 management plans,
communications, and modified ways of working. The COVID-19
management plans have limitations on non-essential international
and domestic travel, identification of at-risk personnel and
communities and protocols to minimise infection risk.
The Sierra Rutile operation has spent over $6.1 million on
COVID-related measures to-date and runs on-site quarantine
and isolation facilities, in addition to the establishment of in-
house polymerase chain reaction (PCR) testing capabilities and
community educational campaigns. Neighbouring communities
are also provided with donations of medical supplies and
personal protective equipment.
2021 HIGHLIGHTS
•
•
•
•
•
•
•
•
Iluka’s total recordable injury frequency rate (TRIFR)
decreased to 2.1 in 2021, compared to 2.8 in 2020.
Across the Group serious potential injuries (SPIs) decreased
to 46 in 2021 compared to 61 in 2020, following targeted
safety programmes at operational sites.
65 Safe Production Leadership training sessions were
conducted during the year, with 569 employees and 144
contractors participating.
Iluka’s CCM programme was launched across all Australian
operating sites, with 338 employees and 145 contractors
completing CCM training during 2021.
In response to the 2021 Western Australian Senate enquiry
to sexual harassment in the mining and resources sector,
Iluka established an internal, cross-functional sexual
harassment working group.
Iluka introduced its COVID-19 Vaccination Policy applying to
all Iluka workplaces in Australia.
The Sierra Rutile operation worked with the Government
of Sierra Leone District Health Management Team to
rollout COVID-19 vaccinations from late March 2021, first
prioritising health care workers, and workers and dependents
with pre-existing medical conditions.
The Sierra Rutile operation was awarded the International
SoS Foundation 2021 Duty of Care Award for Remote
Resilience.
Read more about safety, health and wellbeing at Iluka on
www.iluka.com/sustainability
42
Iluka Resources Limited, Annual Report 2021
Iluka is focused on building and maintaining an engaged,
diverse and capable workforce.
APPROACH
Over 3,250 people globally are employed by Iluka and its
subsidiaries, including 2,406 personnel in Sierra Leone and 797
in Australia.
The Executive and Board recognise the importance of driving
positive outcomes through the company’s culture, as well
as enabling a workplace where employees want to make a
difference. Iluka’s desired culture is one that aligns with the
company’s values and reflects openness, integrated working,
collective accountability and operating with a sense of urgency.
Iluka’s People Policy and Diversity and Inclusion Policy guides
the company’s approach to recruiting, developing and retaining
an engaged, diverse and inclusive workforce. Senior leaders
promote awareness of diversity and inclusion; and integrate those
principles into company activities, including recruitment, training,
talent management and employment policies. This is supported
by an internal working group that identifies and drives diversity
and inclusion initiatives across the business.
Iluka respects and encourages workplace diversity and aims
to create a flexible, diverse and inclusive working environment.
Iluka aims to have a workplace that is representative of the
wider communities in which the company operates. In Australia,
Aboriginal and Torres Strait Islander workforce participation is
approximately 6%, which is reflective of strong participation at
a number of Iluka’s operations. Within Sierra Rutile, 98% of the
workforce are Sierra Leonean. Sierra Rutile strives to maximise
local employment and is one of the country’s largest private
sector employers.
This commitment is guided by a number of labour regulations
including the Sierra Rutile Local Content Policy. Talent pools
of potential employees have been established among the
immediate localities within the mining concession from which
Sierra Rutile recruits skilled and semi-skilled roles. Local
service providers are also engaged to implement coaching and
development programmes.
Employee development is a priority at Iluka. Through strategic
workforce planning and talent management processes, the
company identifies critical skills required, invests in building
capabilities and facilitates succession planning throughout the
company. There has been significant focus on talent and skills
in the mining industry over the past two years, with a shortage
of critical skills and restrictions on travel due to the COVID-19
pandemic. In response, Iluka has increased its investment in
employee development and pipeline programmes including
student scholarships in critical skills disciplines and vacation and
graduate programmes.
Senior Leaders and Emerging Leader development programmes
are run annually as part of Iluka’s leadership framework. The
Emerging Leader Programme also provides participants with
statements of attainment towards a Certificate IV in Leadership
and Management.
An additional extension programme commenced in 2021 to allow
participants to complete the remaining units of the qualification,
with 20 employees on track to receive their qualification during
2022.
To facilitate pathway employment opportunities for Aboriginal
and Torres Strait Islander employees, Iluka offers traineeship
opportunities for students through education partnerships
including the Clontarf Foundation and SHINE Academy. Currently
there are 48 apprentices and trainees working across Iluka’s
Australian operations; and in the Mid-West region Iluka has
eight Clontarf Foundation and one SHINE Academy alumni
permanently employed.
Employee engagement surveys are conducted regularly to
gather feedback on employees’ experiences, as well as identify
areas for focus and business improvement. The 2021 survey
was comprehensive with responses sought on matters such
as diversity, inclusion and belonging; organisational and job
engagement; and was expanded to gather responses on bullying
and harassment, physical and psychological safety. A strong
overall employee engagement score was achieved this year.
2021 HIGHLIGHTS
•
•
56 employees are currently enrolled in Iluka’s leadership
development programmes.
Across the Australian operations, 32 employees
successfully completed their traineeships in resource
processing, warehousing and laboratory disciplines.
• Awarded two scholarships in Metallurgy and Chemical
Engineering in partnership with the Western Australian
Mining Club.
In-field training at Jacinth-Ambrosia
In-field training at Jacinth-Ambrosia
RADIATION MANAGEMENT
Iluka seeks to be recognised and trusted as an industry leader
on radiation management.
APPROACH
Mineral sands, as with other mineral ores, contain levels
of naturally occurring radioactive material (NORM). This is
associated with low level, naturally occurring potassium,
uranium and thorium contained within the grains of the minerals
monazite, xenotime, zircon and some ilmenites. Any activity in
which material containing radiation is extracted from the earth
and processed, can potentially concentrate NORM in the final
products, co-products and residue materials.
Iluka identifies, assesses and controls risks associated with
exposure to radiation from NORM and man-made sealed
sources used in Iluka’s plants and laboratories instrumentation
and through all phases of activities, from exploration, project
development, operations, rehabilitation and closure.
Radiation management practices are aligned with international
best practice, including the International Commission on
Radiological Protection, International Atomic Energy Agency
and applicable jurisdiction legislation. Practices include
the responsible and safe management of waste, ensuring
it is disposed of in accordance with relevant legislation as
documented in site-specific radioactive waste management
plans.
In line with Iluka’s Radiation Management Standard and site-
specific radiation management plans, the company ensures
exposure to radiation meets prescribed statutory limits and is
as low as is reasonably achievable. Globally, all Iluka radiation
management plans are reviewed by the relevant national, state
or territory government regulator against defined requirements
before any approval to operate is granted. Once approved, these
become licence conditions and obligatory standards which must
be complied with to maintain a regulatory licence to operate.
2021 HIGHLIGHTS
•
•
Established an internal Iluka radiation working group focused
on maintaining and enhancing technical expertise and
broadening basic literacy in radiation across the workforce.
A radiation safety development programme was initiated for
Iluka’s current and future radiation technicians and safety
officers. Iluka worked with the Radiation Services division of
the Australian Nuclear Science and Technology Organisation
to develop and deliver the radiation safety training
component.
Iluka Resources Limited, Annual Report 2021
43
2021 HIGHLIGHTS
•
•
•
•
Implemented an Aboriginal Cultural Awareness programme
to develop the capability of employees to build and maintain
strong, effective relationships with Indigenous Australian
people. This included planning for the implementation of an
online cultural awareness training module and a programme
to support managers and supervisors in Aboriginal and
Torres Strait Islander employment in 2022.
Launched a stakeholder engagement module in the
Isometrix platform to manage Group-wide stakeholder data.
Co-funded a pilot Youth Social Economic and Empowerment
project in five mining communities, with 50 young Sierra
Leoneans benefiting from life skills training in masonry,
carpentry, tailoring and innovative farming.
Implemented community infrastructure projects in
Sierra Leone, including commissioning five rehabilitated
hand-pump water wells to address water availability in
the Mogbwemo community, constructing two three-
classroom schools at Gbangbaia and Semabu villages, and
constructing a new pedestrian bridge for the safe passage
of local communities across a significant waterbody.
Read more on Iluka’s work with communities and Traditional
Owners in the Sustainability Data Book and on
www.iluka.com/sustainability/case-studies-and-insights
Vocational training at the Imperi Women’s Vocational Training
Center
SUSTAINABILITY REPORT
COMMUNITIES AND INDIGENOUS RELATIONS
Iluka supports the communities in which we operate by
establishing and maintaining open relationships for mutual
benefit.
APPROACH
Iluka’s approach to working with communities associated with the
company’s operations and activities is described in Iluka’s Social
Performance Standard and related procedures, which provide
a framework for mandatory social performance requirements.
Annual assessments and internal reviews are conducted to
ensure compliance against this framework and to pursue
improvements in Iluka’s social performance practices.
Potential impacts on communities and social risks to the
business are managed using an evidence-based approach to
understand community needs and expectations. As part of
an integrated project engagement process Iluka completes
and reviews social baseline studies, socio-economic and
environmental impact assessments and collects community
sentiment data.
Iluka approaches community and stakeholder engagement in
a consistent manner across the company’s operating regions,
adapting to the specific circumstances of each region. Rigorous
engagement programmes are implemented to support project
development and formal government approvals processes. Iluka
has an online engagement portal providing readily accessible
project information and feedback mechanisms for communities
and stakeholders. The portal is available online at
www.iluka.com/engage.
All Iluka sites must have a locally-appropriate grievance
mechanism, as described in Iluka’s Grievance Management
Procedure, which aligns to the UN Guiding Principles on Business
and Human Rights.
Recognising and respecting people’s human rights and cultural
heritage are embedded in the company’s values, policies and
standards. Iluka acknowledges the important connection that
Indigenous people have with country and seeks to work together
to build constructive and respectful relationships. Relationships
with Aboriginal and Torres Strait Islander stakeholders in Australia
extends from Board level through to day-to-day relationships at
Iluka’s operational sites. Cultural Heritage Management Plans are
developed in consultation with Traditional Owners where sites of
cultural heritage significance are identified.
Iluka has two agreements in place with Traditional Owners. In
South Australia, Iluka’s Native Title Mining Agreement with the
Far West Coast (FWC) Native Title holders has been in place
since 2007 at Iluka’s Jacinth-Ambrosia operations. In Western
Australia, Iluka has a voluntary agreement with the Yued Noongar
People for the company’s Cataby operations. A Memorandum of
Understanding between Iluka and the Yamatji Nation of Western
Australia’s Mid-West regions is in development.
44
Iluka Resources Limited, Annual Report 2021
CREATING VALUE
HUMAN RIGHTS
Iluka optimises shareholder returns through prudent capital
management and allocation; and developing a robust business
that can maintain and grow returns over time.
Iluka is committed to respecting human rights within its
business and supply chain; and treating all people with dignity
and respect.
APPROACH
APPROACH
Direct and indirect economic benefits are created in the
countries and communities in which Iluka operates. This includes
employment and local procurement opportunities; investment in
community infrastructure and services; taxes and payments to
governments; payments to landowners and community groups;
and sponsorships and partnerships.
Contractors and suppliers form an integral part of Iluka’s value
chain. Australian operations collectively engage over 1,650
suppliers, of which approximately 94% are located within
Australia. Based on 2020 data, spending on goods and services
in Western Australia and South Australia accounted for 94% of
Iluka’s total spend in Australia. Sierra Rutile engages over 245
suppliers, of which approximately 55% are based within Sierra
Leone.
Guided by the Iluka Procurement Policy and supporting
processes, Iluka aims to engage with businesses local to
operations where possible, while ensuring the ethical and
responsible sourcing of goods and services. Iluka supports
the transparent disclosure of taxes, royalties and fees to
government, and publicly reports contributions annually
in the Iluka Tax Transparency Report available online at
www.iluka.com/investors-media/financial-results.
2021 HIGHLIGHTS
• Contributed $1.2 million in community investments in
agriculture development, education, sponsorships and
donations.
• As a result of Iluka’s financial performance during 2021, Iluka
voluntarily elected to return amounts received in 2020 under
the Australian Government’s JobKeeper Payment scheme
established to assist businesses impacted by the economic
effects of COVID-19.
• Developed Iluka’s Supplier Code of Conduct that specifies
Iluka’s procurement and respect for human rights
expectations. This will be launched in early 2022.
•
Launched Iluka’s new vendor portal, providing suppliers with
an online platform to register their details for evaluation, as
well as screen new vendors during onboarding for modern
slavery risks.
Read more on Iluka’s economic contributions in the:
2021 Sustainability Data Book available online at
www.iluka.com/investors-media/financial-results.
Iluka’s approach to respecting human rights is guided by the
Code of Conduct and Human Rights Policy. Embedded in the
People Policy and Health, Safety, Environment and Community
Policy, the company’s approach aligns with the United Nations
Guiding Principles on Business and Human Rights.
Iluka seeks to identify potential human rights issues associated
with the company’s activities including instances of modern
slavery in Iluka’s supply chain. Human rights due diligence is
embedded in Iluka’s procurement processes, including new
supplier selection and screening procedures. A framework for the
ongoing management of modern slavery risk is in development.
Stakeholders are consulted on human rights issues to identify
and manage risks and provide an easily accessible complaints
mechanism to resolve grievances in accordance with Iluka’s
Grievance Management Procedure. Employees gain awareness
of human rights implications for the business by completing
Iluka’s mandatory Human Rights and Modern Slavery training
module. Personnel are engaged by Iluka to provide security
services in line with the Voluntary Principles on Security and
Human Rights.
Iluka actively participates in the Australia-based Human Rights
Resource and Energy Collaborative to develop industry-specific
human rights remediation protocols and audit programmes. This
group provides a forum for the resources and energy sectors
to network and share knowledge on respect for human rights,
including implementation of the Australian Modern Slavery Act
2018.
Progress on managing modern slavery risks is published in Iluka’s
annual Modern Slavery Statement available online at
www.iluka.com/about-iluka/governance.
2021 HIGHLIGHTS
• Developed an Iluka-specific human rights and modern
slavery training video to support ongoing awareness and
education of Iluka suppliers.
• Completed an internal assessment of modern slavery risks
associated with the Sierra Rutile operations.
• Completed a pilot with 150 new high risk Iluka suppliers
using Iluka’s Modern Slavery Supplier Self-Assessment
Questionnaire.
Iluka Resources Limited, Annual Report 2021
45
WATER STEWARDSHIP
Water is a valuable and essential resource for Iluka’s mining
and processing activities. The company’s practices balance
environmental and social requirements within Iluka’s
operations catchments.
APPROACH
Water is used in all parts of Iluka’s business, including exploration
drilling, mining, processing, dust suppression, rehabilitation and
for drinking and domestic use in accommodation camps.
All Iluka operations maintain site-specific water management
plans to guide responsible water use throughout the mine
lifecycle and in the context of the local catchments. The
company’s water-related activities are regulated by relevant
legislation in each jurisdiction and are subject to set quality and
quantity thresholds.
Understanding the physical risks of climate change on water
availability in the regions in which Iluka operates, the company
has put in place adequate management and mitigation measures
to ensure both its sustainable use and project longevity.
The water used in Iluka’s operations can impact both the
surrounding water table and groundwater quality. Water is
predominately sourced from nearby groundwater aquifers
and, in some instances, long-term use can potentially result in
groundwater drawdown. Additionally, due to the reliance of nearby
groundwater for processing, water quality can also be altered. To
minimise the effects of groundwater use, Iluka seeks to maximise
the volume of water recycled within processing operations.
Recognising that water connects an operation to the surrounding
landscape and communities, water management at Sierra Rutile
is of particular importance. Due to high seasonal rainfall in the
region, Sierra Rutile is able to use rainfall and natural inflows in
historic ponded areas as its water resource.
2021 HIGHLIGHTS
•
•
New Group-wide water metrics were established to measure
water consumption per tonne of product.
A real-time water balance was successfully implemented at
the Jacinth-Ambrosia operation, the first to be implemented
across all of Iluka’s Australian operations.
Carnaby Cockatoos
SUSTAINABILITY REPORT
RESPONSIBLE FOR OUR
ENVIRONMENT
20%
reduction in Level 3 or greater
environmental incidents compared
to 2020
742ha
land rehabilitated
BIODIVERSITY
Iluka seeks to protect biodiversity and ecosystem value;
and prevent or limit adverse impacts through exploration,
development, operational and rehabilitation phases.
APPROACH
Iluka owns, leases, manages and accesses a number of
operational, rehabilitation and future project sites that contain
areas of high biodiversity value in Australia and Sierra Leone. The
company’s approach is to avoid or minimise any adverse impacts,
with a view to limiting any impact on biodiversity.
Guided by the Iluka Environmental Management Standard, the
company’s biodiversity management considers regional and
local biodiversity needs and regulatory requirements. Iluka works
to protect the biodiversity value of sensitive environments and
contribute to regional biodiversity research and conservation
efforts.
All Iluka sites have biodiversity management plans in place
that are incorporated in Iluka’s environmental, rehabilitation
and closure management plans. In particular, the Sierra
Rutile Biodiversity Action Plan for the active mining Area 1,
was developed in compliance with the International Finance
Corporation (IFC) Performance Standard 6.
Iluka applies the mitigation hierarchy of avoid, minimise,
rehabilitate and offset across all projects and operations, in
addition to a hierarchy of controls to address specific potential
impacts identified during pre-mining biodiversity assessments
and baseline studies.
2021 HIGHLIGHTS
•
•
Iluka entered into a three year partnership with Murdoch
University’s Harry Butler Institute to conduct research
on the movement ecology of Carnaby’s Cockatoos
(Calyptorhynchus latirostris) in the Cataby region. The
research aims to determine flock movement and habitat use
across the region and surrounding areas.
Progress was made on Sierra Rutile’s Biodiversity Action
Plan, including detailed chimpanzee presence surveys and
a remote camera study to document the health status of
individual chimpanzees, as well as record elusive and/or low
density species of conservation concern to gain a better
understanding of where they occur in the mining lease.
46
Iluka Resources Limited, Annual Report 2021
TAILINGS MANAGEMENT
Iluka manages tailings storage facilities in a safe and
responsible manner in line with best practice.
APPROACH
Iluka utilises engineered tailings storage facilities (TSFs) sited
within mine voids or external to the pits to manage processing
waste. This waste comprises clay-, silt- and sand-sized tailings.
All of Iluka’s current TSFs are constructed using downstream
methods to final height embankments.
Iluka takes a risk-based approach to tailings management
to mitigate potential risks TSFs present to employees, local
communities and the environment. Guided by Iluka’s Group
Tailings Procedure, TSFs are designed in accordance with the
industry-recognised Australian National Committee on Large
Dams (ANCOLD) guidelines; their management is supported
by internal and external risk management protocols. Iluka
continues to look at how the Global Industry Standard on Tailings
Management may inform our future practices. Iluka uses external,
independent geotechnical specialists to support the assessment
of the company’s compliance with TSF guidelines and inform
improvements in their management.
Iluka places importance on ongoing consultation with
landholders adjacent to the company’s mining operations and
transparently discloses TSF information via the Global Tailings
Portal. This portal is a free, searchable database that contains
detailed information on more than 1,900 mine tailings dams
worldwide.
2021 HIGHLIGHTS
•
For future audits, an internal checklist was prepared to
facilitate assessments of compliance with ANCOLD tailings
management guidelines.
Read more on Iluka’s tailings management approach and register
of TSFs in the 2021 Sustainability Data Book.
CLOSURE AND LEGACY MANAGEMENT
Iluka plans, executes and rehabilitates the closure of assets
in a manner aligned with leading practice to leave positive
rehabilitation and closure outcomes.
APPROACH
How Iluka rehabilitates and closes its mines and facilities is just
as important as how the company builds and operates them.
Iluka has an integrated approach to planning rehabilitation and
closure that commences at the feasibility phase and continues
throughout the life of the asset.
Achieving safe and beneficial closure outcomes aligns with Iluka’s
business, social and environmental objectives.
Guided by the Iluka Closure Standard and Social Performance
Standard, Iluka’s approach requires every site to have a closure
plan detailing the closure objectives and potential rehabilitation
research or engineering opportunities. Each plan is appropriate
to the project or operational phase and current understanding
of site conditions. The plans are updated to reflect changing
circumstances, such as transitioning between project phases
and changes in operational activities and mining methods.
Iluka focuses on progressive rehabilitation during the operational
phase of a mine where areas are no longer required for mining
or other activities. Rehabilitation management plans assist
with understanding and evaluating closure risks; identifying
opportunities to establish research and development
programmes; and refining closure provision estimates.
Iluka is proud of the company’s strong track record in
rehabilitation spanning several decades, leading to successful
relinquishment. Continual improvements in the company’s
processes and techniques, and the application of leading
practices and innovation, ensure high rehabilitation success
rates.
In addition to the ongoing environmental management of
Iluka’s operating mines and processing sites, historical land
contamination issues are addressed prior to or during closure.
Given Iluka’s 70 year history, contamination may exist by virtue
of the standards of the day, as opposed to any regulatory non-
compliance. Any potential risk of harm to communities and the
environment is addressed through a programme of identification,
assessment and remediation of contaminated land.
2021 HIGHLIGHTS
•
•
•
•
742 hectares was rehabilitated across Iluka sites, while
significant earthworks continued at Jacinth-Ambrosia and
Cataby operations in preparation for future rehabilitation
activities.
At the Tutunup South mine, Iluka restored a wetland to its
original location after being preserved in a nursery during
mining of the area. The wetland contains many individuals of
the Priority 3 sedge species Cyathochaeta teretifolia which
have been successfully maintained in Iluka’s nursery for over
10 years.
Iluka was recognised for technological innovation in
rehabilitation, with the bespoke Flora Restorer tractor-drawn
machine named as a finalist in the Western Australian
Department of Mines, Industry and Regulation’s Golden
Gecko Awards for Environmental Excellence 2021.
Iluka’s South Capel Remediation Project was named
as a finalist in the Australasian Land and Groundwater
Association Industry Excellence Awards 2021 in the
categories of Best Remedial Project (Regional) and Best
Remedial Project (greater than $1 million).
Read more about Iluka’s rehabilitation projects on
www.iluka.com/sustainability.
Iluka Resources Limited, Annual Report 2021
47
SUSTAINABILITY REPORT
OPERATING IN AND PROVIDING
PRODUCTS FOR A LOW
CARBON WORLD
6
1ST
group training sessions conducted in its
first year of the implementation of Iluka’s
continuous improvement programme, CORE
Climate Change Position Statement
developed
GROWTH AND INNOVATION
Iluka’s ability to innovate and apply new technologies is vital in
advancing the company’s strategy and overcoming technical
challenges. This creates growth opportunities and enables
Iluka to deliver long term sustainable value.
APPROACH
To deliver sustainable value, Iluka aims to generate growth
options through exploration, innovation, project development and
external growth opportunities.
Supported by a comprehensive approach to risk management,
growth opportunities are validated as part of a disciplined
process of project selection and evaluation to maximise the
opportunity, achieve the desired outcomes and manage risk.
Iluka pursues innovation and applies new technologies to
advance the company’s business strategy and overcome
technical challenges. Iluka maintains a strong technical capability
in mineral sands development, mining and processing and has
testing facilities to continually improve processing efficiencies
and advance product development. This has driven the
development of non-traditional mineral sands ore bodies and
technology projects potentially transformative for Iluka and the
industry. This includes projects at Balranald, Wimmera, Atacama
and Eneabba; more information on these projects is available on
pages 32-35.
Iluka recognises that a mindset of continuous improvement
enables the company to improve and generate new
opportunities. CORE, Iluka’s continuous improvement
programme, was launched in 2021 and provides a framework
and support for employees to identify, evaluate and implement
improvements.
2021 HIGHLIGHTS
•
•
Launched Iluka’s CORE continuous improvement
programme.
Integrated climate change-related business improvement
opportunities in CORE to enable employees to contribute to
Iluka’s climate change effort.
Read more on Iluka’s innovation and 2021 highlights on page 38.
48
Iluka Resources Limited, Annual Report 2021
PRODUCT STEWARDSHIP
Sustainable delivery of Iluka’s products and minerals, which
are essential to a wide variety of applications that are part
of everyday life, requires responsible business practices
throughout Iluka’s value chain.
APPROACH
Iluka’s approach to product stewardship is integrated throughout
business decisions and materials management. Guided by Iluka’s
Code of Conduct, HSEC Policy, Procurement Policy and Human
Rights Policy, Iluka seeks to build a thorough understanding
of the health, safety, environmental and human rights impacts
and benefits of the company’s products, and to promote their
responsible use.
Iluka is committed to continuously improving the company’s
approach and response to modern slavery risks in its supply
chain. Details on progress on Iluka’s Group-wide human rights
work programme is in Iluka’s annual Modern Slavery Statement
available online at www.iluka.com/about-iluka/governance.
The focus on responsible production and supply is an
opportunity for Iluka to innovate, improve performance and set
new standards. Iluka is progressing the development of internally
developed technology that aims to remove contaminants
contained within zircon minerals at the company’s Wimmera
project. Removing the contaminants will ensure products
continue to meet increasing regulatory requirements of end
markets and during transport.
As part of Iluka’s mineral sands processing activities, the
minerals monazite and xenotime are routinely produced as co-
products. Monazite and xenotime contain rare earths – notably
the high value elements that are essential for the production of
permanent magnets used in electrification technologies, such
as the motors that power electric vehicles and wind turbines,
and some defence applications. Since the early 1990s, Iluka has
stockpiled these by-products at a former mining void at Eneabba.
The Eneabba stockpile now comprises approximately 1 million
tonnes of material that is rich in rare earths and continues to be
replenished on an ongoing basis as part of Iluka’s mineral sands
processing operations. Iluka plans to upgrade the contained
minerals (Eneabba Phase 2) to produce a rare earths feedstock
suitable as a direct feed for a rare earths cracking and leaching
plant (Eneabba Phase 3), providing a substantial supply of critical
minerals to the global market. Read more on Iluka’s Eneabba
development on page 32.
In collaboration with customers, Iluka promotes the responsible
use of products. This includes identifying market opportunities
for co-products produced as a necessary part of mineral sands
mining and upgrading, as well as product reuse and recycling
initiatives. Once viewed as waste products, Iluka has a growing
list of co-products that are generating revenue and limiting waste
production, handling and storage.
These products include:
CLIMATE CHANGE RESPONSE
Activated carbon, a coal based product resulting from the
synthetic rutile upgrade process.
Zircon-in-concentrate (ZIC), a mixed mineral concentrate,
previously considered a tailing from minerals sands dry
separation processing, contains small but nonetheless
valuable quantities of heavy minerals.
Iluka recognises that the physical and transitional impacts
of climate change may affect its assets, productivity, supply
chains and markets. This drives opportunity to reduce the
company’s carbon footprint and optimise the value of the
critical minerals Iluka produces, as the world transitions to a
low carbon future.
Iron concentrate, iron ore fines produced from the
synthetic rutile process.
APPROACH
•
•
•
•
•
Staurolite, an aluminosilicate separated at our mineral
separation plant for sales to the abrasives industry.
Iron man gypsum, a nutrient retention product produced
from the synthetic rutile process.
Iluka actively supports students in industry-related fields,
providing scholarships, work experience opportunities and
apprenticeships through a series of education partnerships and
programmes. The company also actively supports research and
participation in industry stewardship initiatives, such as the Zircon
Industry Association, to share technical knowledge and deliver
research-led outcomes.
2021 HIGHLIGHTS
•
•
•
Construction for Phase 2 of Iluka’s Eneabba development
commenced and completion remains on-track for H1 2022.
The feasibility study for Phase 3 of the Eneabba
development, a fully integrated rare earths refinery,
progressed and is on track for finalisation in Q1 2022.
Production of ZIC increased 47% from 2020. The final
tailings produced through ZIC processing are classified
as barren tailings, or clean fill, that is suitable for capping
material used in rehabilitation.
Read more about Iluka’s project developments on pages 32-35.
Product quality testing in end-use applications at Iluka’s
Metallurgical Testing Facility
Iluka accepts the Intergovernmental Panel on Climate Change
(IPCC) assessment of climate change science and that climate
change impacts are widely recognised. Supportive of the Paris
Agreement, Iluka is aligning the company’s approach to the
Taskforce on Climate-related Financial Disclosures (TCFD)
recommendations and seeks to make a positive contribution to
the global goal of net zero carbon emissions by 2050.
Iluka’s approach is centred on three priorities:
Contributing to a low carbon economy through our products
Iluka’s primary contribution is underpinned by the company’s
product suite – producing critical minerals that are among the
building blocks of a low carbon economy. The high grade and
high quality products produced by Iluka have wide ranging
environmental benefits; from lower environmental impacts in
production compared to alternatives, to the enhancement of
various end-use applications and their sustainability.
Iluka’s diversification into rare earths will contribute to the delivery
of the key inputs for the electrification of the world and the
production of renewable energy technologies, including high
strength permanent magnets used in the motors and generators
that power electric vehicles and wind turbines. Rare earths are
also used in automotive catalytic converters for gasoline and
diesel powered vehicles, converting pollutants in the exhaust
stream into less harmful emissions.
Titanium dioxide’s resistance to heat, light and weathering
assists in maintaining the quality of products for longer. Pigments
containing titanium dioxide are used in approximately 95% of
paints and are the main end-use of Iluka’s rutile and synthetic
rutile products. Titanium dioxide in pigments and plastics
enhances the durability of products, reducing the need to replace
materials, renovate buildings, and extend plastic product lifetime,
helping to reduce waste. The quality of Iluka’s products enables
the company’s pigment customers to operate their plants more
efficiently, using less chlorine and with a lower impact on the
environment.
Zircon’s opacity, thermal stability, resistance to corrosion
and non-reactive properties are beneficial in a wide range
of applications. Over 50% of Iluka’s zircon is supplied to the
ceramics industry where it has approximately a 16% lower Global
Warming Potential than calcined alumina, the main alternative
product, when used as a ceramic whitener and opacifier1.
(1)
Zircon Industry Association www.zircon-association.org
Iluka Resources Limited, Annual Report 2021
49
SUSTAINABILITY REPORT
Building resilience to climate-related risk
Iluka acknowledges the importance of increasing resilience to
a variable and changing climate. The company takes steps to
understand, assess and manage the risks and opportunities to
the business and stakeholders, incorporating these to business
strategy and investment decisions.
Managing our emissions footprint
While Iluka seeks to contribute towards global decarbonisation
goals through its products, Iluka’s own carbon emissions arise
largely from the use of fossil fuels in the production of synthetic
rutile and in the use of earthmoving and other mining equipment
in Iluka’s operations. Synthetic rutile production requires the
use of coal as a reductant. Iluka has explored, and continues
to explore, alternatives and, while efficiency opportunities have
been realised, there is not yet a commercially viable method of
producing synthetic rutile without coal.
Guided by the Iluka Carbon and Energy Standard, all Iluka
operations monitor their energy use and greenhouse gas (GHG)
emissions, and look for ways to reduce emissions and improve
efficiency.
Year on year Iluka seeks to improve the company’s alignment with
the TCFD recommendations and continue to progress efforts on:
Taking steps to understand, assess and manage the risks
and opportunities to the business and stakeholders;
and incorporate these in Iluka’s business strategy and
investment decisions;
2021 HIGHLIGHTS
• Developed Iluka’s inaugural Climate Change Position
Statement.
• Appointment of the Head of Climate Change Response
accountable for leading Iluka’s climate change response.
•
•
•
•
•
•
•
Established an internal climate change working group.
Work progressed on determining an internal shadow carbon
price to be applied in 2022 in the evaluation of the feasibility
of future Iluka projects.
Evaluated options for a solar installation at the Cataby
operation including the installation of a 9 megawatt solar
farm.
Introduced a hybrid electricity facility at the Jacinth-
Ambrosia operation, reducing the site’s Scope 1 emissions
by approximately 10% or 5,500 tonnes of carbon dioxide
equivalent.
Commenced a review of potential technical solutions for
reductant use in synthetic rutile production.
Completed assessments for carbon sequestration.
Integrated climate change-related business improvement
opportunities in Iluka’s CORE continuous improvement
programme to provide all employees the opportunity to
contribute to Iluka’s climate change effort.
Read more about Iluka’s:
Assessing Scope 3 emissions to complete the
understanding of Iluka’s carbon footprint;
Climate Change Position Statement online at
www.iluka.com/sustainability/transparency-hub
Investigating alternative technologies to improve the
carbon footprint of the synthetic rutile production process;
TCFD response in the 2021 Sustainability Data Book
A process for setting and implementing agreed metrics
and targets relating to climate change;
Hybrid power solution at the Jacinth-Ambrosia operation online
at www.iluka.com/sustainability/case-studies-and-insights.
Establishing partnerships aimed at improving performance
across the industry, especially around the deployment of
more energy efficient and lower carbon mining fleets; and
Keeping stakeholders informed on the company’s climate
change-related activities.
•
•
•
•
•
•
Jacinth-Ambrosia’s 3.5MW Solar Farm
50
Iluka Resources Limited, Annual Report 2021
Iluka’s innovative rehabilitation equipment, Flora Restorer
Eneabba, Western Australia
Iluka Resources Limited, Annual Report 2021
51
BUSINESS RISK AND MITIGATION
The delivery of Iluka’s strategy and purpose of delivering
sustainable value requires comprehensive risk management
practices. This enables Iluka’s Board and management to make
strategic choices on where to take risks to realise opportunities
while enhancing and preserving enterprise value.
Iluka’s Risk Management Policy is operationalised through
its Risk Management Framework which is aligned to the
International Standard for risk management, ISO 31000.
The Framework provides a whole of business approach to
the management of risks; and sets out the process for the
identification, evaluation, monitoring, review and reporting of
risk to facilitate the achievement of the company’s plans and
objectives. Risks are managed in context of the Board approved
Risk Appetite Statement, providing high level risk tolerance
guidance across a range of core business and strategic priority
areas. Management reports to the Board those risks which could
have a material impact on the business and / or could result in a
breach of approved risk tolerance thresholds. The Audit and Risk
Committee assists the Board with oversight of the company’s risk
management practices and undertakes an annual review of its
Risk Management Framework considering business priorities and
industry practices.
Iluka has a dedicated Business Risk function that supports
the Audit and Risk Committee and management in facilitating
consistent risk management practices, and centralised reporting
of risks to management and the Board.
Support for Health and Safety and Sustainability risks is provided
by the corporate health and safety and sustainability team,
subject to oversight of Iluka’s Sustainability Committee, which
commenced in 2021.
Set out below are the key risk areas that could have a material
impact on Iluka. These risks are not the only risks that the
company faces and whilst reasonable effort is made to identify
and manage material risks, additional risks not currently known
or detailed below may adversely affect future performance.
Emerging risk is a standing Board agenda item.
All these risks are considered against a backdrop of a myriad
of changes in the external environment in which Iluka operates,
due to COVID-19, evolving global climate change policy and
geopolitical landscape. These present both opportunities
and challenges. 2021 saw continued focus on Iluka’s risk
management practices to enable the company to effectively
navigate through this landscape to achieve its purpose of
delivering sustainable value.
High risk level
Medium risk level
Increased risk trend
Unchanged risk trend
Decreased risk trend
S I N
U
B
E S S A N D O PERATIONAL RIS
K
S
COVID-19
Business
interruption
Sustaining
operations
Financial
Project
development
Cyber
Growth
Anti-bribery
and corruption
Health and
safety
Attracting and
retaining key
people
G
L
O
B
A
L
R
I
S
K
S
Regulatory and
compliance
52
Iluka Resources Limited, Annual Report 2021
Community
/ Social
S
K
S
I
Y R
T
BILI
A
S U STAIN
Climate
change
Sustainability
Environmental
HEALTH AND SAFETY RISKS
ATTRACTING AND RETAINING TALENT
Iluka places significant emphasis on ensuring strong systems,
processes and culture to protect the health and safety of its
workforce.
COVID-19
Iluka continues to consider the implications of the COVID-19
pandemic on its business. Throughout 2021, Iluka has continued
to manage the risk that COVID-19 poses to the health and safety
of its workforce across all jurisdictions that it operates in.
COVID-19 also poses implications to other risks highlighted
including financial; operational; supply-chain; and employee
management, including attracting and retaining talent, to name
but a few.
Attracting and retaining key personnel continues to be a high
priority and has been increasingly challenged in 2021 as a result
of the volatile external environment exacerbated by COVID-19.
Despite the challenging external environment, Iluka has continued
to successfully attract talent.
CYBER RISKS
Iluka takes a risk-based approach to manage cyber security with
a focus on ensuring good practice across standard processes.
Iluka leverages leading frameworks such as NIST and guidance
from Australian Government’s Cyber Security Centre.
Iluka has a heightened focus on managing its cyber risks noting
the increasing risk trend in the external environment.
ENVIRONMENTAL RISKS
FINANCIAL RISKS
Iluka is committed to leading practice in environmental
management as outlined in the Iluka Health, Safety, Environment
and Community Policy. Leading practice is based upon current
community expectations, applicable legislation and regulatory
standards, all of which change over time.
COMMUNITY/SOCIAL RISKS
Iluka operates in different jurisdictions with varying community,
heritage and social laws and cultural practices. Community
expectations are continually evolving and are managed
through the development of robust strategies, maintaining
strong relationships with communities and delivering on its
commitments.
CLIMATE CHANGE RISK
Iluka is committed to managing its climate change risks and
optimising associated business opportunities through the supply
of critical minerals to contribute to a low carbon economy. The
company is committed to the Paris Agreement objectives and
accepts the Intergovernmental Panel on Climate Change (IPCC)
assessment of climate change science. Iluka continues to take
steps to align the company’s approach to the Taskforce on
Climate-related Financial Disclosures (TCFD) recommendations.
Further information is contained on page 49 of this Report.
SUSTAINING OPERATIONS RISKS
Maintaining a pipeline of Ore Reserves and projects is a key
focus for Iluka. Tailings dam management across all Iluka mines
is an ongoing Executive and Board focus. Iluka has dedicated
geotechnical resources team that draws on external tailings and
dam management experts to continue to improve designs and
monitoring activities to reflect best practice. Extensive annual
reviews are conducted of the company’s resources and reserves,
asset integrity, short and long term planning, geotechnical and
hydrogeological modelling.
Iluka faces risks relating to the cost and access to funds,
movement in interest rates and foreign exchange rates (refer Note
20 in the financial statements). Iluka recognises the importance
of maintaining a strong balance sheet that enables flexibility to
pursue strategic objectives. Iluka maintains policies which define
appropriate financial controls and governance which seek to
ensure financial risks are recognized, managed and recorded in a
manner consistent with generally accepted industry practice and
governance standards.
GROWTH RISKS
Iluka regularly assesses its ability to enhance its production
profile or extend the economic life of deposits through the
development of new projects within its portfolio. Iluka seeks to
generate growth options through exploration, innovation, project
development and appropriate external growth opportunities.
Evaluating growth opportunities requires prudent risk taking as
part of a disciplined process of project selection and evaluation
to maximise the opportunity, achieve the desired outcomes, and
manage the associated risks to the company.
Risks to major development projects include the ability to
acquire and/or obtain appropriate access to property, regulatory
approvals, supply chain risks, construction and commissioning
risks.
REGULATORY AND COMPLIANCE RISK
New or evolving regulations and international standards are
outside the company’s control and are often complex and
difficult to predict. The potential development of international
opportunities can be jeopardised by changes to fiscal or
regulatory regimes, adverse changes to tax laws, difficulties in
interpreting or complying with local laws, material differences in
sustainability standards and practices, or changes to existing
political, judicial or administrative policies and changing
community expectations.
Iluka Resources Limited, Annual Report 2021
53
BUSINESS RISK AND MITIGATION
ANTI-BRIBERY AND CORRUPTION RISK
Iluka’s business activities and operations are located in
jurisdictions with varying degrees of political and judicial stability,
including some countries with a relatively high inherent risk with
regards to bribery and corruption. This exposes Iluka to the
risk of unauthorised payments or offers of payments to or by
employees, agents or distributors that could be in violation of
applicable anti-corruption laws.
Iluka has a clear Anti-bribery and Corruption Policy, and internal
controls and procedures to protect against such risks, including
training and compliance programmes for its employees, agents
and distributors. However, there is no assurance that such
controls, policies, procedures or programmes will protect Iluka
from potentially improper or criminal acts.
BUSINESS INTERRUPTION RISK
Circumstances may arise which preclude sites from operating
including natural disaster, material disruption to Iluka’s logistics
chain, critical plant failure or industrial action.
The company undertakes regular reviews for mitigation of
property and business continuity risks. Iluka utilised the
company’s Crisis and Emergency Management Processes to
manage the risks associated with COVID-19 to minimise the
health, safety and business impacts. A Crisis and Emergency
Management expert conducts training and exercises at Iluka’s
sites on an annual cycle.
Iluka maintains a global insurance programme that may offset a
portion of the financial impact of a major business interruption
event.
54
Iluka Resources Limited, Annual Report 2021
FINANCIAL REPORT AND
REMUNERATION REPORT
Results for announcement to the market ................................................ 56
Directors’ report ............................................................................................... 57
Remuneration report ............................................................................ 67
Auditor’s independence declaration ......................................................... 86
Financial statements ....................................................................................... 87
Directors’ declaration ...................................................................................141
Independent auditor’s report.....................................................................142
Iluka Resources Limited, Annual Report 2021
55
RESULTS FOR ANNOUNCEMENT TO THE MARKET
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
For the year ended 31 December 2021
RESULTS FOR ANNOUNCEMENT TO THE MARKET
Provided below are the results for announcement to the market in accordance with Australian Securities
Exchange (ASX) Listing Rule 4.2A and Appendix 4E for the consolidated entity Iluka Resources Limited and its
controlled entities for the year ended 31 December 2021 (the 'financial year') compared with the year ended 31
December 2020 (the 'comparative year').
All currencies shown in this report are Australian dollars unless otherwise indicated.
Revenue from ordinary activities - continuing operations
Net profit after tax for the period from ordinary activities - continuing operations
Net profit after tax for the period attributable to equity holders of the parent
Up 57.4% to $1,559.4m
Up 183.6% to $365.9m
Down 84.9% to $364.9m
Dividends
2021 final: 12 cents per ordinary share (100% franked), to be paid in April 2022
2021 interim: 12 cents per ordinary share (100% franked), paid in October 2021
2020 final: 2 cents per ordinary share (100% franked), paid in April 2021
Demerger dividend of $1,808.1 million, distributed in November 2020
Key ratios
Basic profit per share (cents) - continuing operations
Diluted profit per share (cents) - continuing operations
Free cash flow per share (cents)¹
Return on Equity²
Net tangible assets per share ($)
2021
86.7
86.0
71.0
25.9
2.60
2020
24.5
24.4
5.2
283.7
3.03
¹Free cash flow is determined as cash flow before refinance costs, proceeds/repayment of borrowings and dividends paid in
the year.
²Calculated as Net Profit/(Loss) after Tax (NPAT) for the year as a percentage of average monthly shareholder's equity over the
year.
Commentary on the consolidated results and outlook are set out in the Operating and Financial Review section of
the Directors' Report.
Dividend Reinvestment Plan (DRP)
The current Dividend Reinvestment Plan (DRP) was approved by the Board of Directors, effective for all dividends
from the 2017 final dividend onwards. Under the plan, eligible shareholders can reinvest either all or part of their
dividend payments into additional fully paid Iluka shares. The DRP remains active for the 2021 final dividend.
The Directors have determined that no discount will apply for the DRP in respect of the 2021 final dividend.
Shares allocated to shareholders under the DRP for the 2021 final dividend will be allocated at an amount equal
to the average of the daily volume weighted average market price of ordinary shares of the Company traded on
the ASX over the period of 10 trading days commencing on 14 March 2022. The last date for receipt of election
notices for the DRP is 10 March 2022.
Independent auditor's report
The Consolidated Financial Statements upon which this Appendix 4E is based have been audited.
56
56
Iluka Resources Limited, Annual Report 2021
DIRECTORS’ REPORT
For the year ended 31 December 2021
DIRECTORS' REPORT
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
The directors present their report on the Group consisting of Iluka Resources Limited (the 'Company') and the entities it
controlled at the end of, or during, the year ended 31 December 2021.
The overview of Iluka's operations, including key aspects of operating and financial performance are contained on pages
16 to 54 which forms part of the Directors' Report for the financial year ended 31 December 2021 and is to be read in
conjunction with the following information:
DIRECTORS
The following individuals were directors of Iluka Resources Limited during the whole of the financial year and up to the
date of the report, unless otherwise stated:
G Martin (Chairman)
T O'Leary (Managing Director and CEO)
M Bastos
R Cole
L Saint
S Corlett
A Sutton (appointed 11 March 2021)
J Ranck (retired 29 April 2021)
DIRECTORS' PROFILES
Greg Martin
Name:
Qualifications: BEc, LLB, FAIM, MAICD
Age:
Appointed:
Role:
Independent:
62
1 January 2013
Non-executive Director, Chairman
Yes
Committee membership:
Board (Chairman)
Nominations & Governance Committee (Chair)
People & Performance Committee
Sustainability Committee (Chair)
•
•
•
•
Relevant skills and experience:
Greg contributes to Iluka 40 years’ experience in the utilities, financial services, energy and energy-related infrastructure
sectors in Australia, New Zealand and internationally.
Greg held the position of Managing Director and Chief Executive Officer of The Australian Gas Light Company (AGL) for
five years. After AGL, Greg joined Challenger Financial Services Group as Chief Executive, Infrastructure, principally
engaged in the management of predominantly European and North and South American infrastructure investments, and
subsequently, Managing Director of Murchison Metals Limited.
Greg is a former Non-Executive Director of Energy Developments Limited, Santos Limited and the Australian Energy
Market Operator Limited; Chairman of the Royal Botanic Gardens & Domain Trust of New South Wales; and Deputy
Chairman of the Australian Gas Association. Greg also previously served as inaugural Chairman of the Energy Supply
Association of Australia. He is also a past member of the Business Council of Australia and Committee for the Economic
Development of Australia.
57
Iluka Resources Limited, Annual Report 2021
57
DIRECTORS’ REPORT
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Other Directorships and Offices (current and recent):
Sydney Desalination Plant Pty Ltd - Non-executive Chairman (retired July 2019)
•
• Coronado Global Resources Inc. - Non-executive Chairman (retired February 2019)
• Western Power Corporation - Non-executive Deputy Board Chair (appointed April 2015)
•
• Mawson Infrastructure Group Limited (previously Cosmos Capital Limited) - Non-executive Chairman
Spark Infrastructure - Non-executive Director (retired December 2021)
(appointed July 2020)
• Hunter Water Corporation - Non-executive Chair (appointed January 2021)
Name:
Qualifications:
Age:
Appointed:
Role:
Independent:
Tom O’Leary
LLB, BJuris
58
13 October 2016
Managing Director
No
Committee membership:
•
Sustainability Committee
Relevant skills and experience:
Tom contributes to Iluka more than 30 years’ commercial, investment banking, business development and executive
management experience in a range of sectors including energy, chemicals and mining.
Tom was previously Managing Director of Wesfarmers Chemicals, Energy & Fertilisers, having been appointed to the
role in 2010. Tom joined Wesfarmers in 2000 in a business development role and was then appointed Managing
Director, Wesfarmers Energy, in 2009. Prior to joining Wesfarmers, Tom worked in London for 10 years in finance law,
investment banking and private equity. Tom holds a law degree from The University of Western Australia and has
completed the Advanced Management Program at Harvard Business School.
Other Directorships and Offices (current and recent):
• Clontarf Foundation - Non-executive Director (appointed June 2006)
Marcelo Bastos
Name:
Qualifications: BEng Mechanical (Hons, UFMG), MBA (FDC-MG), MAICD
Age:
Appointed:
Role:
Independent:
58
20 February 2014
Non-executive Director
Yes
Committee membership:
• Audit & Risk Committee
• Nominations & Governance Committee
•
Sustainability Committee
Relevant skills and experience:
Marcelo contributes to Iluka more than 35 years’ of operational and project experience in the mining industry across
numerous commodities and geographies, particularly in Australia, Africa and South America.
58
58
Iluka Resources Limited, Annual Report 2021
DIRECTORS’ REPORT
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Marcelo has extensive experience in major projects development and operation, and company management in the
metals and mining industry. Marcelo was formerly the Chief Operating Officer of the global resources company, MMG
Limited, with responsibility for its global operations.
Prior to MMG, Marcelo held senior executive positions with BHP and Vale, including CEO BHP Billiton Mitsubishi Alliance
(BMA), President of BHP’s Nickel West, President of Cerro Matoso and Nickel Americas, and Vale Director of Copper
Operations. Marcelo is a former Non-executive Director of Golder Associates and Oz Minerals Ltd, a former Member of
the Western Australia Chamber of Mines and Energy and served as Vice President of the Queensland Resources Council.
Other Directorships and Offices (current and recent):
• OZ Minerals Limited - Non-executive Director (retired April 2019)
• Golder Associates - Non-executive Director (retired in April 2021)
• Aurizon Holdings Limited - Non-executive Director (appointed November 2017)
• Anglo American PLC - Non-executive Director (appointed April 2019)
Name:
Qualifications:
Age:
Appointed:
Role:
Independent:
Rob Cole
LLB (Hons), BSc
59
1 March 2018
Non-executive Director
Yes
Committee membership:
• Nominations & Governance Committee
• People & Performance Committee (Chair)
•
Sustainability Committee
Relevant skills and experience
Rob contributes to Iluka more than 35 years’ of commercial, business strategy and planning experience in the energy
and resources sectors.
Rob was previously Managing Director of oil and gas production and exploration company, Beach Energy. Rob also
spent over eight years at Woodside Petroleum Limited across a number of senior positions in commercial, corporate
and legal areas, including Executive Director, Executive Vice President (Corporate and Commercial) and General
Counsel. Prior to his time at Woodside, Rob was a Partner at the law firm King & Wood Mallesons. Rob is currently a
Non-executive Director of various public, government-owned and not for profit companies and an external member of
the Regulation & Market Operations subcommittee of the Power and Water Corporation of the Northern Territory.
Other Directorships and Offices (current and recent):
Southern Ports Authority - Non-executive Chair (resigned February 2020)
•
• GLX Group - Non-executive Chair (resigned April 2020)
•
•
• Perenti Global Limited - Non-executive Chair (appointed July 2018)
• Power & Water Corporation (Northern Territory) – external member of the Regulation & Market Operations
St Bartholomew's House Inc. - Non-executive Director (appointed November 2016)
Synergy - Non-executive Chair (appointed November 2017)
subcommittee (appointed June 2020)
Landgate - Non-executive Chair (appointed August 2020)
•
59
Iluka Resources Limited, Annual Report 2021
59
DIRECTORS’ REPORT
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Lynne Saint
Name:
Qualifications: BCom, GradDip Ed Studies, FCPA, FAICD, Cert Business Administration
Age:
Appointed:
Role:
Independent:
59
24 October 2019
Non-executive Director
Yes
Committee membership:
• Audit & Risk Committee (Chair)
• Nominations & Governance Committee
•
Sustainability Committee
Relevant skills and experience:
Lynne contributes to Iluka over 30 years’ financial, auditing, corporate governance, enterprise risk, supply chain
management, project management, and commercial experience both within Australia and internationally.
Lynne’s career spans more than 19 years in executive leadership at Bechtel Group, having served as Chief Audit
Executive and Chief Financial Officer of Bechtel’s Mining and Metals Global Business Unit. In Lynne’s early career, she
held consulting and auditing roles with KMPG and PwC, financial and commercial roles in financial services and
assurance, mining, and the engineering and construction industry in Australia and Papua New Guinea. In 2003, Lynne
was recognised as the Telstra Queensland Business Woman of the Year.
Other Directorships and Offices (current and recent):
NuFarm Ltd – Non-executive Director (appointed December 2020)
Ventia Services Group Limited – Non-executive Director (appointed October 2021)
Susie Corlett
Name:
Qualifications: BSc (Geo, Hons), FAusIMM, GAICD
Age:
Appointed:
Role:
Independent:
51
1 June 2019
Non-executive Director
Yes
Committee membership:
• Audit & Risk Committee
• Nominations & Governance Committee
•
Sustainability Committee
Relevant skills and experience:
Susie contributes to Iluka more than 25 years’ experience in exploration, mining operations, mining finance and
investment.
Susie is a professional non-executive director following an executive career spanning mine operations, investment
banking and private equity. A geologist, Susie's background is in mining operations and exploration for RGC Ltd and
Goldfields Ltd. Susie was most recently an Investment Director for Pacific Road Capital Ltd (a global mining private
equity fund), following a career in mining project finance and credit risk management for Standard Bank Limited,
Deutsche Bank and Macquarie Bank.
60
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Iluka Resources Limited, Annual Report 2021
DIRECTORS’ REPORT
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Other Directorships and Offices (current and recent):
• Australian Institute of Mining & Metallurgy (AusIMM) Education Endowment Fund - Trustee (appointed June
2018)
Foundation for National Parks and Wildlife - Non-executive Director (appointed June 2018)
•
• Aurelia Metals Ltd - Non-executive Director (appointed October 2018)
The David Burgess Foundation - Non-executive Director (retired June 2019)
•
• Mineral Resources Limited - Non-executive Director (appointed January 2021)
Andrea Sutton
Name:
Qualifications: BEng Chemical (Hons), GradDipEcon, GAICD
Age:
Appointed:
Role:
Independent:
50
11 March 2021
Non-executive Director
Yes
Committee membership:
• People & Performance Committee
• Nominations & Governance Committee
•
Sustainability Committee
Relevant skills and experience
Andrea contributes to the Iluka Board over 25 years’ of expertise across a range of operational and corporate functions,
having held a number of executive roles in health, safety, and environment; human resources; and infrastructure
management, within the resources sector.
Andrea’s 25 year career with Rio Tinto included: a secondment as CEO and Managing Director of Energy Resources of
Australia (ERA) from 2013 to 2017; Head of Health, Safety, Environment and Security; Managing Director Support
Strategy Review - Human Resources; General Manager of Operations at the Bengalla Mine; and General Manager of
Infrastructure, Iron Ore.
Andrea is a member of Engineers Australia, Australasian Institute of Mining and Metallurgy, Chief Executive Women and
the Australian Institute of Company Directors.
Other Directorships and Offices (current and recent):
Energy Resources Australia Limited - Non-executive Director of (retired May 2020)
Infrastructure WA - Board member (appointed July 2019)
•
•
• Australian Nuclear Science and Technology Organisation (ANSTO) - Board member (appointed April 2020)
• National Association of Women in Operations (NAWO) - Board member (appointed August 2020)
• Red 5 Limited - Non-executive Director (appointed November 2020)
• DDH1 Limited - Non-executive Director (appointed February 2021)
61
Iluka Resources Limited, Annual Report 2021
61
DIRECTORS’ REPORT
For the year ended 31 December 2021
MEETINGS OF DIRECTORS
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
In 2021 the Board formally met on 12 occasions, of which 8 meetings were scheduled. In addition to these meetings,
the Board spent a day primarily focused on strategic planning. The chairman chaired all the meetings. The non-executive
directors periodically met independent of management to discuss relevant issues. directors' attendance at Board and
committee meetings during 2021 is detailed below.
Director
Board
Committee
Audit and Risk
Nominations and
Governance
Commttee
People and Performance
Committee
Sustainability
(3)
Committee
(1) (2)
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Total meetings
12
Executive
T O'Leary
Non-executive
G Martin
M Bastos
R Cole
S Corlett
J Ranck (4)
L Saint
A Sutton (5)
12
12
12
12
12
4
12
8
12
12
12
12
12
4
12
8
4
4
4
4
5
5
5
5
5
1
5
4
4
4
4
4
4
1
4
3
3
3
3
1
2
5
5
5
5
5
1
5
4
Chairman
Member
Prior Member
Prior Chairman
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
3
3
3
3
3
1
3
2
(1)
“Held” indicates the number of meetings held during the period of each director’s tenure. Where a director is not a member but
attended meetings during the period, only the number of meetings attended is shown.
“Attended” indicates the number of meetings attended by each director.
(2)
(3) The Sustainability Committee was established on 30 June 2021.
(4) Mr Ranck retired from the Board on 29 April 2021.
(5) Ms Sutton was appointed to the Board and the People and Performance Committee on 11 March 2021.
DIRECTORS SHAREHOLDING
Directors’ shareholding is set out in the Remuneration Report, section 6.
EXECUTIVE TEAM PROFILES
Matthew Blackwell, BEng (Mech), Grad Dip (Tech Mgt), MBA, MAICD, MIEAust
Head of Projects and Sales & Marketing
Mr Blackwell joined Iluka in 2004 as President of US Operations. He had responsibilities for Land Management and as
General Manager, USA, before being appointed Head of Marketing, Mineral Sands in February 2014. In 2019, Mr
Blackwell was made Head of Major Projects, Engineering & Innovation. In late 2020, Mr Blackwell reassumed
responsibility for Sales and Marketing. Prior to joining Iluka he was Executive Vice President of TSX listed Asia Pacific
Resources, based in Thailand. Mr Blackwell’s background in the mining industry includes varied roles spanning multiple
commodities.
62
62
Iluka Resources Limited, Annual Report 2021
DIRECTORS’ REPORT
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Rob Hattingh, MSc (Geochem), GAICD
Head of Climate Change Response
Mr Hattingh took over responsibility for Climate Change in 2021 after completing his assignment as CEO of Sierra Rutile.
Prior to his posting in Africa he held the position of General Manager Innovation, Sustainability and Technology in Iluka
Resources. Mr Hattingh has more than 30 years’ experience in the mineral sands industry in a number of roles. He was
Principal Environmental Scientist at Richards Bay Minerals in South Africa and worked in senior roles at Exxaro
Resources’ mineral sands business (now part of Tronox) where he was responsible for technical disciplines for a
number of years. In 2008, Mr Hattingh joined Iluka Resources in Perth where he held management roles in the fields of
hydrogeology, metallurgy, sustainability and business development.
Sarah Hodgson, LLB, GAICD
General Manager, People and Sustainability
Ms Hodgson joined the People team at Iluka in 2013 and was appointed to her current role in March 2018. Ms Hodgson
has 20 years’ HR experience specialising in remuneration and international mobility and started her career at
PricewaterhouseCoopers in London before relocating to Australia with KPMG in 2002. Prior to joining Iluka Ms Hodgson
held senior remuneration roles both as a consultant and in-house at Mercer, Westpac and KPMG.
Daniel McGrath, B.Sc (Math)
Chief Technology Officer and Head of Rare Earths
Mr McGrath joined Iluka in 1993 and has held technical and operations management roles throughout Iluka for many
years. Mr McGrath is now focused on developing Iluka's rare earths business as well as serving as chief technology
officer. His most recent appointment was as General Manager - Cataby and Southwest Operations where he oversaw
mining and synthetic rutile operations along with the technical development and metallurgy functions. Prior to this Mr
McGrath has held senior operational positions at Iluka’s Western Australian, Eastern Australian, and USA operations
while also having held metallurgy and process engineering roles in Australia, Indonesia and Sierra Leone.
Adele Stratton, BA (Hons), FCA, GAICD
Chief Financial Officer and Head of Development
Ms Stratton joined Iluka in 2011, was appointed Chief Financial Officer in August 2018 and assumed accountabilities
for Head of Development in October 2020. She is a qualified chartered accountant with 20 years’ experience working in
both professional practice and public listed companies. Ms Stratton commenced her career with KPMG, spending 7
years in the assurance practice both in the UK, where she qualified as a chartered accountant, and Australia. Prior to
joining Iluka, she worked in a number of finance roles at Rio Tinto Iron Ore in Perth.
Shane Tilka, BCom
General Manager, Australian Operations
Mr Tilka joined Iluka in November 2004 and has held operations management roles throughout Iluka. His most recent
appointment was General Manager - Jacinth Ambrosia and Midwest. Prior to this Mr Tilka was the Chief Operating
Officer for Sierra Rutile Ltd, General Manager for Iluka’s US Operations and has held other senior roles at Iluka’s Western
Australian and South Australian operations.
COMPANY SECRETARY
Mr Ben Martin BMSc LLB MAICD is the Company Secretary of the Company. Mr Martin was appointed to the position
of General Counsel and Company Secretary in September 2021 and prior to that, he held positions in Iluka’s in-house
legal and land management teams. Before joining Iluka in 2014, Mr Martin was a solicitor at global law firm King & Wood
Mallesons where he advised resources companies on a range of project development, approvals, land access and
regulatory compliance matters.
Mr Nigel Tinley BBus FCPA FGIA FCG (CS, CGP) GAICD also acts as Company Secretary for the Company. Mr Tinley was
appointed to the position of Joint Company Secretary in 2013 and prior to that, he held senior positions in Finance and
Sales and Marketing. Before joining Iluka in 2006, Mr Tinley held a range of accounting, financial and commercial roles
over his 18 years with BHP Limited both in Australia and internationally.
63
Iluka Resources Limited, Annual Report 2021
63
DIRECTORS’ REPORT
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
DIRECTORS AND OTHER OFFICERS’ REMUNERATION
Discussion of the Board’s policy for determining the nature and amount of remuneration for directors and senior
executives and the relationship between such policy and company performance are contained in the remuneration
report on pages 67 to 85 of this Annual Report.
PRINCIPAL ACTIVITIES
The principal activities and operations of the Group during the financial year were the exploration, project development,
mining operations, processing and marketing of mineral sands, and rehabilitation. Iluka has an emerging position in rare
earths elements, which are contained in the mineral sands monazite and xenotime. Iluka holds a 20% stake in Deterra
Royalties Limited (Deterra), the largest ASX-listed resources focused royalty company.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company indemnifies all directors of the Company named in this report and current and former executive officers
of the Company and its controlled entities against all liabilities to persons (other than the Company or the related body
corporate) which arise out of the performance of their normal duties as director or executive officer unless the liability
relates to conduct involving bad faith. The Company also has a policy to indemnify the directors and executive officers
against all costs and expenses incurred in defending an action that falls within the scope of the indemnity and any
resulting payments.
During the year the Company has paid a premium in respect of directors' and executive officers' insurance. The contract
contains a prohibition on disclosure of the amount of the premium and the nature of the liabilities under the policy.
INDEMNIFICATION OF AUDITORS
The Company's auditor is PricewaterhouseCoopers. The terms of engagement of Iluka's external auditor includes an
indemnity in favour of the external auditor. This indemnity is in accordance with PricewaterhouseCoopers' standard
Terms of Business and is conditional upon PricewaterhouseCoopers acting as external auditor. Iluka has not otherwise
indemnified or agreed to indemnify the external auditors of Iluka at any time during the financial year.
NON-AUDIT SERVICES
The Group has, from time to time, employed the external auditor, PricewaterhouseCoopers, on assignments additional
to their statutory audit duties where the auditor's expertise and experience with the Group are important.
Fees that were paid or payable during the year for non-audit services provided by the auditor of the parent entity, its
network firms and non-related audit firms is set out in note of the financial report.
The Board of directors has considered the position and, in accordance with advice received from the Audit and Risk
Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001 for the following reasons:
• all non-audit services were provided in accordance with Iluka’s Non-Audit Services Policy and External Auditor
Guidelines; and
• all non-audit services were subject to the corporate governance processes adopted by the company and have
been reviewed by the Audit & Risk Committee to ensure that they do not affect the integrity or objectivity of the
auditor.
A copy of the auditors' independence declaration as required under section 307C of the Corporations Act 2011 is set
out on page 86.
64
64
Iluka Resources Limited, Annual Report 2021
DIRECTORS’ REPORT
For the year ended 31 December 2021
ENVIRONMENTAL REGULATIONS
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
So far as the directors are aware, there have been no material breaches of the Group's licences and all mining and
exploration activities have been undertaken in compliance with the relevant environmental regulations.
OTHER MATTERS
Sierra Leone environmental class action
On 22 January 2019, SRL was served with a writ and statement of claim in respect of an action filed in the High Court
of Sierra Leone Commercial And Admiralty Division against both SRL and The Environmental Protection
Agency.
The proceedings have been brought by a group of landowner representatives (Representatives) who allege that they
suffered loss as a result of SRL’s mining operations. The claims primarily relate to environmental matters that arose
prior to the Group acquiring its interest in SRL. The Representatives allege, in part, that SRL engaged in improper mining
practices resulting in environmental degradation and contamination, did not meet certain rehabilitation obligations and
violated local mining laws. SRL denies liability in respect of the allegations and intends to defend the claims. SRL filed
its defence in March 2019 and also applied to the Court for an order requiring the Representatives to provide further
detail on their claims.
As at 31 December 2021, the status of the proceedings has still not reached a stage where SRL is able to reliably
estimate the quantum of liability, if any, that SRL may incur in respect of the class action.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
On 14 January 2022, Sierra Rutile withdrew its notice to suspend operations following the ratification by the
Parliament of Sierra Leone of adjustments to the applicable fiscal regime for Area 1 in December.
On 7 February 2022, the Federal Court of Australia handed down its decision in relation to the shareholder class action,
dismissing all of the applicant’s and group members’ claims against Iluka.
On 19 February 2022, a fire in a warehouse compound at SRL damaged sheds containing stored equipment parts and
spares. The fire damage did not extend to operational property, plant, and equipment or product inventory. The group
is still assessing the potential impact and therefore no estimates of its financial effect can be made as at the date of
this report.
Other than the above matters, as further detailed in note 25 of the financial statements, the directors are not aware of
any matter or circumstance not otherwise dealt with in the Directors' Report that has or may significantly affect
the operations of the entity, the results of its operations or the state of affairs of the entity in subsequent financial
years.
DIVIDEND
The directors have declared a fully franked final dividend of 12 cents per ordinary share payable on 7 April 2022.
65
Iluka Resources Limited, Annual Report 2021
65
DIRECTORS’ REPORT
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
In the opinion of the directors, likely developments in and expected results of the operations of the Group have been
disclosed in the Financial and Operational review on pages 20 to 39. Disclosure of any further material relating to those
matters could result in unreasonable prejudice to the interests of the Group.
CORPORATE GOVERNANCE STATEMENT
The Company’s Corporate Governance Statement for the year ended 31 December 2021 may be accessed from the
Company’s website at http://www.iluka.com/about-iluka/governance.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in "ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument
2016/191", issued by the Australian Securities and Investments Commission, relating to the 'rounding off' of amounts
in the Directors' Report and accompanying Financial Report. Amounts in the Directors' Report have been rounded off in
accordance with that Rounding Instrument to the nearest hundred thousand dollars, or in certain cases, to the nearest
dollar.
This report is made in accordance with a resolution of the directors.
G Martin
Chairman
T O'Leary
Managing Director
24 February 2022
66
66
Iluka Resources Limited, Annual Report 2021
DIRECTORS’ REPORT
For the year ended 31 December 2021
REMUNERATION REPORT
MESSAGE FROM THE CHAIRMAN OF THE PEOPLE & PERFORMANCE COMMITTEE
Dear Shareholders
On behalf of the Board, I am pleased to present Iluka’s Remuneration Report for the financial year to 31 December 2021 (2021).
2021 PERFORMANCE HIGHLIGHTS
As outlined by our Chairman and Managing Director, 2021 has seen the markets rebound. Our resilience and operational flexibility
has ensured that we were able to meet lower demand in 2020 and respond quickly to return to maximum operational settings in
2021. Throughout this period we have been able to maintain sustainable pricing outcomes across our portfolio of products. These
efforts, along with our disciplined production performance have seen the delivery of one of the Company’s strongest financial
performances in its history. Significant progress has also been delivered in our efforts to diversify our portfolio, as is evidenced in
the summary of achievements in the Managing Director’s strategic objectives set out in Section 4. Most pleasingly, this has all
been accomplished in an environment of improving sustainability performance.
The below provides a brief summary of key business highlights:
■
■
■
■
Financial: achieved strong NPAT and ROC results above the stretch targets;
Operations: saw robust Australian operational performance and improved performance at Sierra Rutile resulting above
stretch target production over the year;
Growth opportunities: successful delivery of key targets in relation to growth projects and studies including the rare earths
initiative and material advancement of technical studies; and
Sustainability:: strong improvement in the total recordable injury frequency rate, the management of environmental risks
across the operations and progression of the company’s climate change work programme.
Further details are set out in the Annual Report.
2021 REMUNERATION OUTCOMES
Iluka’s approach to executive remuneration is designed to operate through changing circumstances and environments.
Executives are rewarded through fixed remuneration and the Executive Incentive Plan (EIP) (a combined incentive plan).
In determining 2021 remuneration outcomes, the Board has carefully considered factors encompassing company performance,
individual achievements and alignment with stakeholder expectations. The following summarises the outcomes by component:
■
■
■
■
Fixed remuneration increase: no fixed remuneration increases were awarded to Executive KMP in 2021.
Executive Incentive Plan (EIP): the Board has determined an EIP outcome of 92% of maximum (138% target) for the
Managing Director, based on a total of 138% achievement against target of the annual group scorecard and 140% achieved
against individual strategic objectives. The Managing Director’s award will be delivered in equity, with no cash incentive paid.
Executive Key Management Personnel outcomes were between 90-92% of maximum (depending on individual executive).
2018 EIP Performance Rights Award: 2018 Vesting: for Performance Rights (Rights) granted under the 2018 EIP, the Board
determined a vesting of 100% of the Rights based on the Total Shareholder Return (TSR) achievement of 99.8 percent
measured against Iluka’s peer group over the performance period (See Section 4 for further details).
Board fee movement: No changes to the Non-executive Director fees were made during 2021.
The Board believes these outcomes fairly recognise the strong performance of the business and the disciplined performance of
management. Further detail relating to these awards can be found in Section 4.
2022 REMUNERATION APPROACH
Executives will continue to be rewarded through fixed remuneration and the EIP, with no significant change to remuneration
structure. Effective for the 2022 year, there will be some adjustments to scorecard performance measures. The sustainability
performance measures will incorporate a broader range of measures with a focus on the company’s climate change work
programme and energy efficiency in our operations and continuous improvement in the diversity and inclusiveness of our
workplaces.
On behalf of the Board, I invite you to review our Remuneration Report. We look forward to your ongoing feedback and continuing
discussions with our shareholders and their proxy advisers on our remuneration approach. Thank you for your ongoing support.
Yours sincerely
Rob Cole
People and Performance Committee Chair
Iluka Resources Limited, Annual Report 2021
67
DIRECTORS’ REPORT
For the year ended 31 December 2021
2021 AT A GLANCE
2021 Key Achievements:
1Relates to the Iluka’s TSR over the 4 year performance period for the 2018 EIP from 1 January 2018 to 31 December 2021.
How executive remuneration outcomes are aligned with company performance:
1Reported TSR for each year relates to the TSR calculated for to corresponding EIP performance period.
How this year’s performance compares to previous years:
The following table outlines historic business performance outcomes:
KPI
Net profit/(loss) after tax ($m) - Reported
Net profit/(loss) after tax ($m) – Underlying2,3
Underlying EBITDA (Group) ($m)2
EBITDA margin (%)
Free cash flow ($ million)
Earnings per share (cents)
Return on equity (%)
Closing share price ($)4
Dividends paid (cents)5
Franking credit level (%)
Average AUD: USD spot exchange rate (cents)
2021
347.4
314.8
621.4
41.8
299.1
82.3
24.6
10.10
12
100
75.1
20201
2,410
151.2
423.1
41.2
36.3
570.4
283.7
6.49
2
100
69.1
20191
(299.7)
278.7
616.0
51.6
139.7
(71.0)
(26.6)
4.73
13
100
69.5
2018
303.9
300.7
600.1
48.2
304.4
72.2
31.8
3.87
29
100
74.8
20171
(171.6)
95.6
360.5
35.4
321.9
(41.0)
(20.1)
5.17
31
100
76.7
Revenue per tonne Z/R/SR sold ($/t)
1,593
1,625
1,654
1,426
1,079
1Reported earnings in 2017, 2019 and 2020 were impacted by significant impairments and write-downs; profit on demerger of Deterra Royalties
and/or changes to rehabilitation provisions for closed sites.
2Underlying Net profit/(loss) after tax and Group EBITDA excludes adjustments relating to impairments and write-downs; profit on demerger; and
changes to rehabilitation provisions for closed sites.
3The reconciliation for the 2021 Underlying Net profit/(loss) after tax can be found on page 21 of the Financial Results.
42017, 2018 and 2019 represent the historical closing share price adjusted for the demerger of Deterra Royalties, sourced from FactSet via Nasdaq
Excel Add-in. Starting price on 1 January was $3.76.
5 Dividends declared in relation to the year.
68
Iluka Resources Limited, Annual Report 2021
2
DIRECTORS’ REPORT
For the year ended 31 December 2021
TABLE OF CONTENTS
This Remuneration Report (Report) contains the following sections.
SECTION 1
Who is covered by
this Report?
SECTION 2
Remuneration
Governance &
Philosophy
SECTION 3
Executive
Remuneration
Framework and
Arrangements
SECTION 4
2021 Executive
KMP
Remuneration
Outcomes
SECTION 5
Non-executive
Director
Remuneration
SECTION 6
Additional
Remuneration
Disclosures
Section 1 defines the Key Management Personnel at Iluka covered in this Remuneration
Report.
Page 70
Section 2 provides an overview of key elements of the company’s remuneration
governance and philosophy.
Page 71
Section 3 describes the 2021 remuneration structure for the Executive Key
Management Personnel including the design of the Executive Incentive Plan (EIP).
Page 72
Section 4 details 2021 remuneration outcomes for the Executive Key Management
Personnel including fixed remuneration, EIP outcomes and long term performance rights
vesting outcomes where relevant.
Page 75
Section 5 details policy fee and benefits for the company’s Non-executive Directors
including relevant statutory remuneration disclosure.
Page 80
Section 6 provides an update for all relevant statutory remuneration disclosures as
required by the Corporations Act 2001 (if not disclosed elsewhere in the Report).
Page 81
3
Iluka Resources Limited, Annual Report 2021
69
DIRECTORS’ REPORT
For the year ended 31 December 2021
1. WHO IS COVERED BY THIS REPORT?
This Remuneration Report (Report) details the remuneration arrangements for Iluka’s Key Management Personnel (KMP). KMP
are those persons who, directly or indirectly, have authority and responsibility for planning, directing, and controlling activities of
the company. The KMP members over the 2021 year comprised the following executives (Executive KMP) and Non-executive
Directors.
Name
Position
Term as KMP
Executive KMP
Current Members
T O’Leary
Managing Director and Chief Executive Officer
Full year
M Blackwell
Head of Projects and Sales & Marketing
Full year
A Stratton
Chief Financial Officer and Head of Development
Full year
S Tilka
General Manager, Australian Operations
Full year
Non-executive Directors
Current Members
G Martin
M Bastos
R Cole
S Corlett
L Saint
A Sutton
Former Members
Chairman, Independent Non-executive Director
Full year
Independent Non-executive Director
Independent Non-executive Director1
Independent Non-executive Director
Independent Non-executive Director
Full year
Full year
Full year
Full year
Independent Non-executive Director2
Appointed 11 March 2021
J Ranck
Independent Non-executive Director
Ceased 9 April 2021
1R Cole was appointed Chair of the People and Performance Committee on 29 April 2021.
2A Sutton was appointed to the Board and People and Performance Committee on 11 March 2021.
4
70
Iluka Resources Limited, Annual Report 2021
DIRECTORS’ REPORT
For the year ended 31 December 2021
2. REMUNERATION GOVERNANCE AND PHILOSOPHY
KMP remuneration decision making is governed by the Iluka remuneration governance framework. The Iluka People and
Performance Committee Charter can be found at wwwwww..iilluukkaa..ccoomm//aabboouutt--iilluukkaa//ggoovveerrnnaannccee.
2.1 REMUNERATION GOVERNANCE FRAMEWORK
2.2 REMUNERATION PRINCIPLES
Iluka’s Remuneration Principles provide the foundations for how remuneration is structured and awarded to achieve the
following:
2.3 ENGAGEMENT OF EXTERNAL REMUNERATION CONSULTANTS
External remuneration consultants were engaged by the PPC in 2021 to provide advice and market insights in relation to
executive remuneration arrangements. The remuneration consultants did not provide a ‘Remuneration Recommendation’ as
defined in the Corporations Act 2011 during the 2021 financial year.
Iluka Resources Limited, Annual Report 2021
71
5
DIRECTORS’ REPORT
For the year ended 31 December 2021
2.4 MINIMUM SHAREHOLDING REQUIREMENT
KMP are required to acquire and hold a personally significant shareholding in Iluka to align to the interests of shareholders over
a reasonable time frame taking into account vesting and taxation obligations.
Executive KMP
The minimum shareholding requirements (MSR) for Executive KMP is as below:
MMSSRR rreeqquuiirreemmeenntt
Managing Director
Other Executives
%% ooff FFiixxeedd RReemmuunneerraattiioonn ((yyeeaarr--eenndd))
200%
100%
As of 31 December 2021, the Managing Director and two other members of Executive KMP meet the
requirement. As a result of vesting outcomes related to the 2021 EIP, all members of the Executive KMP will
meet the requirement in 2022.
Non-executive
Directors
The Board is committed to Non-executive Directors acquiring and holding a shareholding within three years
of appointment. In January 2022, the Board approved a change to the Policy, requiring the Chairman and
other Non-executive Directors to hold such a number that the aggregate value is at least equal to 100% of
their annual Board fee1. As at 31 December 2021, four Non-executive Directors meet this minimum
shareholding requirement.
See Section 6 for details of current KMP shareholdings.
1Excludes committee fees and superannuation
2.5 SECURITIES TRADING POLICY
Security Trading
Policy
Directors and employees (including Executive KMP) are prohibited from trading in financial products issued
or created over the company’s securities created by third parties, and from trading in associated products
and entering into transactions which operate to limit the economic risk of their security holdings in the
company.
The Security Trading Policy is available on the company’s website at wwwwww..iilluukkaa..ccoomm.
3. EXECUTIVE REMUNERATION FRAMEWORK AND ARRANGEMENTS
3.1 EXECUTIVE FRAMEWORK AND COMPONENTS
Executive KMP remuneration at Iluka is comprised of a mix of fixed and at-risk components to attract, retain and motivate
executives. The diagram below provides an overview of the different remuneration components within the Iluka framework.
Purpose
2021
Approach
Fixed Remuneration (FR)
Provide remuneration that is
reflective of the knowledge, skills,
and experience of executives.
Executive Incentive Plan (EIP)
Ensure remuneration received by Executive KMP is closely linked to the
company’s performance, aligning it with the returns generated for our
shareholders over the long term.
Includes base salary and
superannuation and is set after
considering:
■
Trajectory of the company’s
growth and key strategic
objectives
Relevant market, comparators
and scarcity of talent
Executive KMP’s experience
and performance
Executive KMP’s role
responsibilities
■
■
■
Reflects the variable remuneration awarded to Executive KMP
based on the performance against an annual scorecard of financial
and strategic measures. The Board assesses scorecard
performance at the end of the year with the resulting award
normally split into three components:
■
■
■
CCaasshh -- comprises a relatively small portion of the “at risk”
component for all Executive KMP other than the Managing Director1.
RReessttrriicctteedd RRiigghhttss - vest in equally weighted tranches on the first,
second, third and fourth anniversary of the grant.
PPeerrffoorrmmaannccee RRiigghhttss are subject to performance testing at two
stages. The initial scorecard performance determines the amount of
the grant. A further performance test relating to Iluka’s relative TSR
is undertaken at the end of five years. Performance Rights will only
vest if the TSR of Iluka is at, or greater than, the 50th percentile of
the selected peer group over the period. Vesting will be on a sliding
scale, with 50% of the Performance Rights to vest for median
performance, increasing to 100% of the Performance Rights to vest
where the Company is at or above the 75th percentile2.
1 As noted in last year’s report, from 2020 the Managing Director’s EIP award is delivered entirely in deferred equity. In addition, a discretionary
change was made for 2020 only, where the cash component for other Executive KMP was awarded as Restricted Rights. From 2021 the cash
component has been reinstated for Executive KMP, other than the Managing Director, consistent with the EIP design.
2The vesting schedule for the Performance Rights component changed in 2020. For the 2018 and 2019 EIP, 100% of Performance Rights vest
when the rTSR is at or greater than the 50th percentile of the peer group.
72
Iluka Resources Limited, Annual Report 2021
6
DIRECTORS’ REPORT
For the year ended 31 December 2021
3.2 EXECUTIVE REMUNERATION MIX
The following diagram sets out the mix for fixed and “at risk” remuneration for Executive KMP during 2021.
3.3 EXECUTIVE INCENTIVE PLAN (EIP)
The following diagram outlines the structure of EIP. Further details on the design of the EIP is outlined in the table below.
120% of the EIP award for other Executive KMP is paid in cash. The Managing Director does not receive cash.
Iluka Resources Limited, Annual Report 2021
73
7
DIRECTORS’ REPORT
For the year ended 31 December 2021
3.4 EIP – KEY QUESTIONS AND ANSWERS
Why does the
Board consider
the EIP is
appropriate for
Iluka?
The EIP design recognises that Iluka operates in a cyclical and volatile industry with results materially
impacted influenced by price, volume and foreign exchange. The EIP award is delivered with a large
proportion of “at risk” remuneration in equity, deferred over several years. This, coupled with requiring
our Executive KMP to maintain a personally significant shareholding in Iluka, aligns Executive KMP with
shareholder interest and ensures they are exposed to the same financial consequences as
shareholders.
How is it paid?
For the Managing Director, EIP awards are delivered in 100% in deferred equity consisting of 60%
Restricted Rights and 40% Performance Rights. For the Executive KMP, EIP awards are paid 20% cash,
40% Restricted Rights and 40% Performance Rights.
How much can
participants
earn under
EIP?
What
performance
measures will
inform the EIP
awards?
How EIP
awards are
determined?
Who assesses
the EIP
performance?
How is the
number of
rights to be
granted to
participants
determined?
The EIP opportunity is expressed as a percentage of fixed remuneration (FR).
Managing Director
Other Executive KMP
TTaarrggeett ((%% ooff FFRR))
MMaaxxiimmuumm ((%% ooff FFRR))
140%
110%
210%
165%
The Board sets an annual scorecard to focus our Executive KMP on financial and strategic imperatives
they can influence and are critical to Iluka’s long-term sustainability. In 2021, objectives for Executive
KMP covered:
■
■
■
■
Financial performance (50%)
Production (10%)
Sustainability focusing on protecting our people, our environment and our communities (15%); and
Individual strategic measures (25%).
In setting objectives, the Board aims to ensure that targets are quantifiable and drive the right commercial
and strategic outcomes for Iluka. Financial targets exclude profit derived from Iluka’s investment in
Deterra Royalties. Section 4 provides a detailed explanation of the specific targets set in 2021, how they
were measured and our assessment of performance.
EIP scorecard outcomes are calculated based on the following schedule, with a sliding scale operating
between threshold and target, and between target and stretch:
PPeerrffoorrmmaannccee LLeevveell
Threshold
Target
Stretch (maximum)
EEIIPP OOuuttccoommee ((%% TTaarrggeett))
50%
100%
150%
EIP outcomes are determined by the Board following an assessment of performance measures at the
end of the 2021 performance period.
The number of Restricted Rights and Performance Rights awarded to each participant is based on a
face value methodology. This is determined by dividing the dollar value of the deferred equity
component by the Volume Weighted Average Price (VWAP) of Iluka shares traded on the ASX over the
five trading days following the release of the company’s full year results.
74
Iluka Resources Limited, Annual Report 2021
8
DIRECTORS’ REPORT
For the year ended 31 December 2021
What vesting
or
performance
condition apply
to the equity
awards?
Granted EIP equity is subject to vesting conditions including continued service and/or performance:
RReessttrriicctteedd RRiigghhttss
PPeerrffoorrmmaannccee RRiigghhttss
Restricted Rights will be
granted following the end
of the relevant
performance period and
vest in 4 equally weighted
tranches on the first,
second, third and fourth
anniversary of the grant,
subject to continued
service.
Performance Rights will be subject to an additional performance test
prior to vesting.
Iluka TSR performance will be measured over a five-year period
commencing on 1 January 2021 against the S&P / ASX 200
Resources Index constituents (excluding companies primarily
engaged in the oil and gas sector and non-mining activities). Vesting is
subject to the sliding scale below:
PPeerrffoorrmmaannccee lleevveell ttoo bbee
aacchhiieevveedd
Below 50th percentile
50th percentile
Between 50th and 75th percentile
75th percentile
PPeerrcceennttaaggee vveessttiinngg
0%
50%
Sliding scale vesting
100%
Are
participants
entitled to
voting rights
and dividends?
No dividends are paid on Restricted Rights or Performance Rights prior to vesting. For any Restricted
Rights or Performance Rights that ultimately vest, a cash payment equivalent to dividends paid by Iluka
during the period between grant of the awards and vesting will be made. No cash payment will be made
in respect of dividends on awards which do not vest. The grant date fair value incorporates any expected
dividends payable at vesting.
What happens
if participants
leave before
the vesting
date?
Unless the Board determines otherwise, in the event of an Executive KMP ceasing employment for
cause: all restricted shares and unvested equity awards will be forfeited or lapse (as applicable).
Any other circumstances (including death, total and permanent disability, retirement or redundancy):
unvested restricted shares and equity awards will remain on foot and be subject to the original terms of
the award.
What happens
on a change of
control?
The Board has discretion to determine that vesting of some or all of the equity awards be accelerated
and that dealing restrictions on restricted shares be released, in the event of a takeover or other
transaction that in the Board’s opinion should be treated as a change of control event.
The Board may clawback incentives that have vested and that have been paid or awarded to participants
in certain circumstances. For example, restricted shares, restricted rights and performance rights may
be lapsed or forfeited (as appropriate) if a participant acts fraudulently or dishonestly or if there is a
material misstatement or omission in the accounts of a Group company.
Where the Board exercises its discretion under the EIP, the Board will consider all relevant factors at the
time, which may include the participant’s performance against the KPI targets and the proportion of the
performance or deferral period that has elapsed.
Do any
clawback or
malus
provisions
apply?
What does the
Board take into
account when
considering
whether to
exercise
discretion?
4. 2021 EXECUTIVE KMP REMUNERATION OUTCOMES
4.1 2021 FIXED REMUNERATION OUTCOMES
The Board regularly reviews executive remuneration levels against the market comparators based on a number of factors
including revenue, industry and operational factors including international scope and complexity. Competition for talent within the
resources industry remains extremely tight, particularly in Western Australia.
There has been no fixed remuneration increase for the Managing Director and Executive KMP over the 2021 year.
The Board will continue to monitor remuneration levels based on the factors set out in the Executive Remuneration Framework
(see Section 3.1 for more detail).
Executive KMP
T O’Leary
M Blackwell
A Stratton
S Tilka
2021 Fixed Remuneration
$1,400,000
$655,000
$630,000
$550,000
2020 Fixed Remuneration
$1,400,000
$655,000
$630,000
$550,000
Iluka Resources Limited, Annual Report 2021
75
9
DIRECTORS’ REPORT
For the year ended 31 December 2021
4.2 2021 EIP SCORECARD AND OUTCOMES ACHIEVED
The EIP Scorecard is approved by the Board at the commencement of the financial year and focuses executives on business
priorities that support the delivery of Iluka’s Corporate five-year plan. Outlined below are the targets that were set for 2021, and
the level of performance achieved. Further detail on the performance conditions can found in Section 3.4.
Iluka 2021 performance
Scorecard measure
and target
Weight
Performance and outcome
Threshold – Target – Stretch
FINANCIALS
50%
Outcome – 136% of target; 91% of maximum
achieved
Group ROC (%)1
Target 2021 budget
20%
Group NPAT1
15%
Stretch
Return on capital of 68% was adjusted to exclude the impact of the profit on Iluka’s
Deterra investment. The adjusted return on capital of 64% was above stretch.
Adjusted returns were higher due to higher sales volumes and prices following
resolution of the Chemours dispute and earlier than expected recovery of the zircon
market.
Stretch
Adjusted NPAT was also above stretch. 2021 saw market demand for zircon returning
to pre-pandemic levels, pushing up prices, as well as a resolution of the Chemours
dispute. This increase in volumes and prices had a significant and direct impact
delivering higher NPAT than expected; this had the largest impact on financial
performance. Additional factors contributing to higher NPAT were decreases in
rehabilitation provisions due to lower rehabilitation costs in the US and improved
accuracy of expected rehabilitation costs based on expenses incurred on actual
rehabilitation activities carried out, and planned rehabilitation activities, combined with
favourable exchange rate movements due to strengthening of the US dollar since the
start of the year.
All in Unit Cash Costs of
Production $/t
Target $1,112 / t
Above target
15%
Higher production volumes to meet increased demand were matched by a
corresponding increase in production costs, resulting in the final unit cost being 1%
above target.
1Disclosure of financial targets. No specific targets are disclosed in relation to the financial earnings measures due to commercial sensitivity. Iluka’s approach to the
marketing and pricing of its products is key to achievement of the company’s objective to deliver sustainable value. We believe maintaining confidentiality on financial
earnings targets, even on a retrospective basis, is critical to our competitive advantage and is in the best interests of shareholders. The targets and outcomes are
adjusted to exclude the income derived from Iluka’s investment in Deterra Royalties.
PRODUCTION
10%
Outcome –150% of target; 100% of maximum
achieved
Stretch
Group Z/R/SR
10%
Overall production of 720kt was above stretch performance. Zircon production was
37kt above expectation due to an increase in total HMC feed at Narngulu, achieved by
compressing planned outage from 5 weeks to 2 weeks, and increasing Cataby HMC
feed volume. Synthetic Rutile production was 23kt favourable due to an earlier restart
after the planned major maintenance outage in the first quarter.
76
Iluka Resources Limited, Annual Report 2021
10
DIRECTORS’ REPORT
For the year ended 31 December 2021
Scorecard measure
and target
Weight
Performance and outcome
Threshold – Target – Stretch
SUSTAINABILITY
15%
Outcome –135% of target; 90% of maximum achieved
Group Total Recordable
Injury Frequency Rate
Reduction to 2.6
Group Closure Index
(%)
Reduction of
rehabilitation liability
through closure index
target of 103%
Group environmental
level 3 and above
incidents
Target of 15 or less
5%
5%
Stretch
The targeted reduction was met. The TRIFR decreased from 2.8 at the end of 2020 to
2.1 at the end of 2021. There were 20 Total Recordable Injuries in 2021, which was 7
less than the previous year.
Stretch
Stretch performance was achieved as a result of the rehabilitation of 739 hectares
during 2021.
Stretch
2.5%
Level 3 and above environmental incidents reported were down from 15 in 2020 to 12
in 2021. Seven were associated with non-toxic, sediment-laden water releases or
fugitive dust emissions. 4 reported incidents represented recurrent lower level
incidents (Level 1 or 2).
Threshold
Closed actions by due
date
95% of actions
(excluding SRL) closed
out by initial set due
date
GROUP SCORECARD2 Outcome – 138% of target; 92% of maximum achieved
2.5%
91% of actions (identified through incident investigations, planned workplace
inspections and safety visits) were closed out by initial due date on a rolling 12 month
basis.
2 Financials, Production, Sustainability
Iluka Resources Limited, Annual Report 2021
77
11
DIRECTORS’ REPORT
For the year ended 31 December 2021
4.3 MANAGING DIRECTOR INDIVIDUAL OBJECTIVES
Individual strategic objectives were set based on individual KMP accountabilities. Outlined below is assessment of the Managing
Director’s performance against the Individual Strategy scorecard measure and corresponding EIP outcome:
Scorecard
measure
(weight)
INDIVIDUAL
STRATEGY (25%)
Advance staged
diversification of
portfolio into rare
earths in a prudent
manner
Pursue value
accretive
opportunities in
mineral sands to
deliver sustainable
value over the long
term with a view to
extending reserve
life
Optimise
sustainable value
from investment in
Sierra Rutile and the
Sembehun
opportunity
Optimise price and
volume settings
Performance
Threshold – Target - Stretch
Outcome – 140% of target; 92% of maximum
•
•
•
•
•
•
•
•
•
•
•
•
•
Eneabba Phase 2 (EP2) progressed and, while capital costs were higher than planned as a
consequence of activity levels in Western Australia, project is on track for commissioning
in H1 2022.
Feasibility study for the development of a rare earths refinery at Eneabba (EP3)
substantively completed in 2021.
Various approvals have advanced considerably. In particular environmental approvals have
been progressed ahead of schedule.
Given rare earths separation technology is new to Iluka and the level of concentration in
end markets, Iluka has engaged with the Australian Government in relation to a risk sharing
arrangement to facilitate the development of EP3. Over the course of the year that
engagement was advanced significantly.
Substantial progress made on the Balranald development (progressed from PFS to DFS).
DFS is progressing in accordance with the study execution plan, including with respect to
positive engagement with various potential technology partners interested in working with
Iluka to commercialise the underground mining technology.
Material advancement of zircon purification technology. Following process validation
through successful results from small scale test environment, a pilot plant was installed
and commissioned in H2 2021. Ongoing pleasing results contributed to techno-economic
appraisal which supported the declaration of resource in respect of the Wimmera zircon
and rare earths deposit (in PFS).
Several other deposits (in Western Australia, South Australia and New South Wales) are the
subject of feasibility studies and were progressed over the course of the year.
The hydraulic mining trial was completed; it provides a technically viable alternate mining
methodology which could complement mining activities in both Mining Area 1 and
Sembehun.
SRL’s operational performance in H1 was below expectations, resulting in a notice of
intention to suspend operations from end of 2021 issued in May 2021. Following improving
operational performance, as well as Sierra Leonean parliamentary ratification of the
amendment to the fiscal regime applicable to Sierra Rutile, the company no longer intends
to suspend operations.
A process to identify third parties willing to invest in the next phase of Sierra Rutile’s growth
were pursued with several potential counterparties; to date none have provided compelling
outcomes.
In addition to working with third parties, substantial progress was made on examining the
feasibility of demerging Sierra Rutile from Iluka.
Robust demand and constrained industry supply has provided Iluka opportunities to
achieve positive product pricing while maintaining focus on sustainable pricing outcomes
across the product portfolio.
Iluka and Chemours settled the previously disclosed contractual dispute, with the terms of
settlement being commercial in confidence but include Chemours taking all of the
synthetic rutile not taken in 2020.
4.4 OVERALL EIP SCORECARD OUTCOME FOR THE MD
Scorecard measure
Weight
Outcome
Weighted
Outcome
Threshold – Target – Stretch
Group Scorecard
Individual Strategy MD
Outcome
75%
25%
138%
103%
140%
35%
OVERALL MD RESULT
138%
The Individual strategy scorecard area outcomes for other Executive KMP ranged from 126 – 139% of target.
12
78
Iluka Resources Limited, Annual Report 2021
DIRECTORS’ REPORT
For the year ended 31 December 2021
4.5 EIP AWARDS FROM 2021 SCORECARD OUTCOMES
The following table presents the outcomes of the EIP award attributed to the 2021 performance year. The face value of restricted
rights and performance rights has been presented, as the fair value will not be determined until the grant is made in March 2022.
Executive
KMP
Maximum
EIP
opportunity
T O’Leary
A Stratton
M Blackwell
S Tilka
$2,940,000
$1,039,500
$1,080,750
$907,500
% of
target
EIP
earned
138
136
135
138
% of
maximum
EIP earned
92
91
90
92
% of
maximum
EIP
forfeited
8
9
10
8
EIP
Cash
EIP
Restricted
Rights
EIP
Performance
Rights
Total
N/A
$188,982
$194,319
$167,101
$1,626,996
$377,962
$388,638
$334,202
$1,084,664
$377,962
$388,638
$334,202
$2,711,660
$944,906
$971,595
$835,505
4.6 VESTING OF 2018 EIP PERFORMANCE RIGHTS
Following the assessment of 2018 annual performance scorecard, 33% of total EIP awards were granted to the Executive KMP
as Performance Rights. These Performance Rights were tested and assessed again by the Board based on the Iluka Total
Shareholder Return (TSR) performance in relation to the S&P / ASX 200 Resources Index (excluding companies primarily engaged
in the oil and gas sector and non-mining activities) over the 4 years to 31 December 2021. Under the terms of the 2018 EIP all
Performance Rights granted will vest if the TSR of Iluka is at, or greater than the 50th percentile of the peer group. From 2020,
vesting of Performance Rights under the EIP has changed to a sliding scale. (See Section 3.4 for more detail).
The 2018 EIP Performance Rights were assessed as follows:
Relative TSR
Weighting:
Actual score:
Calculation:
100%
TSR of (99.08 %) 68th percentile of comparator group.
100% vesting as Iluka Relative TSR is above the 50th percentile of peer group (as per
the terms of the 2018 EIP Performance Rights).
The Board determined a vesting of 100% of the performance rights based on the relative TSR achievement of the 68th
percentile against Iluka’s peer group over the performance period.
4.7 SUMMARY OF REALISED REMUNERATION PAID TO EXECUTIVE KMP IN 2021
This section uses non-IFRS information to show the “realised remuneration” received by Executive KMP for 2021. This is a
voluntary disclosure intended to demonstrate the link between the remuneration received by Executive KMP and the
performance of Iluka over 2021. Refer to following Section 4.8 for statutory remuneration disclosure.
Executive
KMP
Fixed
Remuneration
Other1
Cash2
Restricted Rights2
EIP
T O’Leary
A Stratton
M Blackwell
S Tilka
$1,400,000
$630,000
$655,000
$550,000
$23,929
$16,105
$16,166
$7,580
N/A
$188,982
$194,319
$167,101
$1,626,996
$377,962
$388,638
$334,202
1Represents car parking for T O’Leary, A Stratton and M Blackwell, FBT value of car benefit for S Tilka and dividend equivalent payments in relation to vesting of 2019 EIP
Tranche 2 and 2020 EIP Tranche 1 payable in March 2022.
2Relates to outcome from 2021 EIP. Restricted rights vest in 4 tranches in March 2023, 2024, 2025 and 2026. This represents the market value of the grant being made.
3The estimated value of the 2018 EIP Performance Rights vesting in March 2022 was calculated using the closing share price of $10.10 at 31 December 2021. The actual
value will be calculated using the closing price at the date of vesting (1 March 2022). Value also includes a dividend equivalent payment payable in March 2022, with
respect to vested rights under the plan.
2018 EIP
Performance
Rights
vesting3
$1,464,482
$450,300
$521,844
$209,595
Total
$4,515,407
$1,663,349
$1,775,967
$1,268,478
Iluka Resources Limited, Annual Report 2021
13
79
DIRECTORS’ REPORT
For the year ended 31 December 2021
4.8 EXECUTIVE KMP STATUTORY REMUNERATION DISCLOSURES
Details of the remuneration of the KMP, prepared in accordance with the requirements of the Corporations Act 2001 (Cth) and
the relevant Australian Accounting Standards, are set out in the following tables.
Name
Year
Base Salary
EIP Cash
1
Non-
Monetary
2
Benefits
Superann-
uation
Benefits
Termination
3
Benefits
T O’Leary
A Stratton
M Blackwell
S Tilka6
2021
2020
2021
2020
2021
2020
2021
2020
Former Executives
C Barbier7
2021
J Andrews8
TToottaall99
2020
2021
2020
2021
2020
$1,377,369
$1,378,652
$607,369
$608,652
N/A
N/A
$188,982
$0
$632,369
$194,319
$633,652
$0
$12,426
$12,463
$12,426
$12,463
$12,426
$12,463
$527,369
$167,101
$5,897
$96,056
$0
N/A
$461,434
N/A
N/A
$0
N/A
$465,601
$3,144,476
$123,730
$550,402
$3,644,047
123730
$0
N/A
$21,877
$17,733
N/A
$10,362
$43,175
$69,628
N/A
$20,118
$90,524
$105,839
$22,631
$21,348
$22,631
$21,348
$22,631
$21,348
$22,631
$3,944
N/A
$0
$0
$0
$0
$0
$0
$0
$0
N/A
$0
N/A
Accrued
Annual and
Long
Service
4
Leave
$41,078
($74,612)
$40,552
$17,626
$74,636
$40,543
$93,922
$29,812
N/A
$35,922
N/A
Share
Based
5
Payments
Statutory
Total
$1,428,147
$2,881,651
($73,871)
$1,263,980
$388,293
$249,891
$1,260,253
$909,980
$410,327
$1,346,708
$180,114
$888,120
$311,026
$1,127,946
$180,871
$310,683
N/A
N/A
$131,041
$671,007
N/A
N/A
$49,086
$0
$49,086
($1,927)
$250,188
($78,418)
$2,537,793
$588,552
$6,616,558
$49,291
$589,628
$4,629,322
1EIP cash payments and restricted share awards for 2021 will be made in March 2022. No cash payments made to current Executive KMP in relation to 2020, except for J
Andrews (See footnote 8).
2Represents car parking for Executive KMP based in Perth, FBT value of car benefit for S Tilka and Immigration Support for C Barbier.
3Includes cessation entitlements relating to payment in lieu of notice and accrued leave entitlements.
4Represents the movement in the annual and long-service leave provisions during the year. Any reduction in accrued annual leave reflects more leave taken that which
accrued in the period.
5Amounts relate to the fair value of awards made under various incentive plans attributable to the year measured in accordance with AASB 2 Share Based Payments.
6S Tilka became a KMP on 27 October 2020. Remuneration disclosures for 2020 reflect the period he was a KMP.
7C Barbier ceased to be KMP on 30 October 2020. Remuneration disclosures for 2020 reflect the period he was KMP.
8J Andrews ceased to be a KMP on 30 October 2020. Remuneration disclosures for 2020 reflect the period he was a KMP. 2018 Performance Rights were cancelled and
2019 EIP Restricted and Performance Rights grants were not granted to him. SBP amounts previously recognised have been reversed in 2020, reducing the expense.
9The total for 2020 disclosed in this report is different to the total disclosed in 2020 Annual Report. The difference is due the reporting of Accrued Annual and Long
Service leave.
5. NON-EXECUTIVE DIRECTOR REMUNERATION
Non-executive Director fees are paid from an aggregate fee pool of $1.8 million as approved by shareholders at Iluka’s AGM in
May 2015. The total amount paid to Non-executive Directors in 2021 (including superannuation) was $1,202,460.
Non-executive Directors are not entitled to retirement benefits other than statutory superannuation or other statutory required
benefits. Non-executive Directors do not participate in share or bonus schemes designed for Executive KMP or employees.
After considering the relevant market data for Non-executive Directors, the Board determined that there were no change to the
Non-executive Director fees in 2021.
5.1 2021 NON-EXECUTIVE DIRECTOR FEE POLICY
Board and Committee Fees
BBooaarrdd
AAuuddiitt aanndd RRiisskk CCoommmmiitttteeee
PPeeooppllee aanndd PPeerrffoorrmmaannccee CCoommmmiitttteeee
NNoommiinnaattiioonn CCoommmmiitttteeee
SSuussttaaiinnaabbiilliittyy CCoommmmiitttteeee
Chair
Member
2020
$321,400
$ 36,100
$ 30,600
Nil
Nil
2021
$321,400
$36,100
$30,600
Nil
Nil
2020
$128,800
$ 18,100
$ 15,350
Nil
Nil
2021
$128,800
$18,100
$15,350
Nil
Nil
The minimum required employer superannuation contribution up to the statutory maximum is paid into each Non-executive
Director’s nominated eligible fund and is in addition to the above fees. The statutory value for superannuation increased in 2021.
80
Iluka Resources Limited, Annual Report 2021
14
DIRECTORS’ REPORT
For the year ended 31 December 2021
5.2 2021 NON-EXECUTIVE DIRECTOR STATUTORY REMUNERATION DISCLOSURES
Outlined below are the fees paid to Non-executive Directors in 2021, prepared in accordance with the requirements of the
Corporations Act 2001 (Cth) and the relevant Australian Accounting Standards.
Name
Year
Current Non-executive Directors
Board and
Committee Fees
Non-
Monetary
Benefits
Superannuation
Statutory Total
G Martin
M Bastos
R Cole
S Corlett
L Saint
A Sutton
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
$321,400
$321,400
$146,900
$146,900
$154,432
$144,150
$146,900
$146,900
$164,900
$159,923
$115,947
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$22,631
$21,348
$14,323
$13,956
$15,070
$13,694
$14,323
$13,956
$16,078
$15,193
$11,375
$344,031
$342,748
$161,223
$160,856
$169,502
$157,844
$161,223
$160,856
$180,978
$175,116
$127,322
TToottaall ffeeeess
Former Non-executive Directors
2021
J Ranck
2020
2021
2020
1A Sutton was appointed on 11 March 2021.
2The totals for 2020 disclosed in this report is different to the total disclosed in 2020 Annual Report. The difference is due to J Seabrook’s remuneration figures being
excluded in this report as she is no longer a director of Iluka.
$53,133
$159,400
$1,103,612
$1,078,673
$58,181
$174,543
$1,202,460
$1,171,963
$5,048
$15,143
$98,848
$93,290
$0
$0
$0
$0
.
6. ADDITIONAL REMUNERATION DISCLOSURES
6.1 EXECUTIVE EMPLOYMENT AGREEMENTS
Iluka’s Executive KMP are employed on terms set out in individual employment agreements which do not contain a fixed term.
Key terms of the agreements are as follows:
Executive KMP
Position
Termination Notice
Period by Iluka or
Employee
T O'Leary
Managing Director
A Stratton
Chief Financial Officer and Head of Development
M Blackwell
Head of Projects and Sales & Marketing
S Tilka
General Manager, Australian Operations
6 months
6 months
3 months
3 months
Termination
Benefit
6 months
6 months
6 months
6 months
If the executive’s employment is terminated by Iluka (other than for gross misconduct or on other grounds for summary dismissal),
the executive may be eligible to receive a termination payment to a maximum of 6 months TFR (inclusive of any payment made in
lieu of notice).
Iluka may terminate Executive KMP’s employment agreements without notice and without providing payment in lieu of notice
where there is gross misconduct or other grounds for summary dismissal.
Iluka Resources Limited, Annual Report 2021
15
81
DIRECTORS’ REPORT
For the year ended 31 December 2021
6.2 EXECUTIVE KMP SHARE–BASED REMUNERATION
RESTRICTED RIGHTS/SHARES (RRS)
The table below shows the number of restricted rights/shares (RRs) that were granted, vested and forfeited during the 2021
year. The terms and conditions of previous years’ incentive awards are outlined in the relevant year’s Remuneration Report,
available at wwwwww..IIlluukkaa..ccoomm.
Number of restricted rights
Value of restricted rights
Award
Grant date
Balance at
1 January
2021 KMP
start date
Granted
during
20211
Vested / exercised
into shares in 2021
Lapsed during 2021
Balance at
31 Decem
ber 2021
Granted
in 20212
#
%
#
%
#
T O’Leary
2018 EIP RRs
(shares)
2019 EIP RRs4
2020 EIP RRs
A Stratton
2018 EIP RRs
(shares)
2019 EIP RRs4
2020 EIP RRs
M Blackwell
2018 EIP RRs
(shares)
2019 EIP RRs4
2020 EIP RRs
S Tilka
2018 EIP RRs
(shares)
2018 SRL
Restricted
Share5
2019 SRL
Restricted
Share5
2019 EIP RRs4
2020 EIP RRs
1 March
2019
1 March
2020 and
Dec 2020
1 March
2021
1 March
2019
1 March
2020 and
Dec 2020
1 March
2021
1 March
2019
1 March
2020 and
Dec 2020
1 March
2021
1 March
2019
1 March
2018
1 March
2019
1 March
2020 and
Dec 2020
1 March
2021
79,994
123,047
-
-
(39,997)
33%
(41,016)
33%
-
70,827
-
-
22,232
38,279
-
-
(11,116)
33%
(12,760)
33%
-
24,904
-
-
25,764
39,120
-
-
(12,882)
33%
(13,040)
33%
-
24,879
-
-
8,366
10,893
12,718
15,359
-
-
-
-
(4,183)
33%
(10,893)
100%
-
-
(5,120)
33%
-
15,900
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Value vested
/ exercised
into shares
in 20213
$
$297,704
$305,281
$
-
-
39,997
82,031
70,827
$529,200
-
11,116
25,519
-
-
$82,738
$94,967
24,904
$186,076
-
12,882
26,080
-
-
$95,883
$97,059
24,879
$185,889
-
4,183
0
12,718
10,239
-
-
-
-
$31,135
$81,708
-
$38,101
15,900
$118,801
-
1Share rights granted in respect of the 2020 EIP, which form part of the share based payments for 2020 to 2024 inclusive.
2Value at point of grant. 5 day VWAP for allocation was $7.47
3Value at point of vest. Share price at 1 March 2021 was $7.44
4The initial grant date reflects the original date Restricted Right were allocated in relation to the 2019 EIP award. “Top up” rights were granted in Dec 2020 as a result of the
Deterra Royalties demerger, in order to keep participants “whole”. Further detail can be found in the 2020 Remuneration Report.
5S Tilka became a KMP on 27 October 2020. The opening balance reflects the balance on the date he became a KMP and includes 10,893 restricted shares granted to Mr
Tilka in March 2018 as his 2018 Restricted Share Plan award (which was released to him in March 2021) and 12,718 restricted shares granted to Mr Tilka in March 2019 as
his 2019 Restricted Share Plan award (which will be released to him in March 2022).
PERFORMANCE RIGHTS
The table below shows the number of performance rights (PRs) that were granted, vested and forfeited during the 2021 year:
Number of performance rights
Value of performance
rights
Award
Grant
date
Balance at
1 January
2021 KMP
start date
Granted
during
20211
Vested / exercised into
shares in 2021
Lapsed during 2021
Balance at
31 December
20212
Granted in
20213
$
#
%
#
%
#
Value
vested /
exercised
into
shares in
20214
$
T O’Leary
2016 LTIP5
2017 LTIP5
October
2016 and
Dec
2020
March
2017 and
Dec 2020
461,449
(164,807)
35.72%
(296,642)
64.28%
-
$1,226,683
448,918
(195,592)
43.57%
(253,326)
56.43%
$1,352,502
82
Iluka Resources Limited, Annual Report 2021
16
DIRECTORS’ REPORT
For the year ended 31 December 2021
Number of performance rights
Value of performance
rights
Award
Grant
date
Balance at
1 January
2021 KMP
start date
Granted
during
20211
Vested / exercised into
shares in 2021
Lapsed during 2021
Balance at
31 December
20212
Granted in
20213
#
-
138,682
78,088
-
-
-
-
47,218
-
%
-
-
-
#
-
-
%
#
138,682
78,088
-
-
-
47,218
$300,306
$
-
-
Value
vested /
exercised
into
shares in
20214
$
-
-
-
2018 EIP PRs5
2019 EIP PRs5
2020 EIP PRs
A Stratton
2017 LTIP5
2018 EIP PRs5
2019 EIP PRs5
2020 EIP PRs
M Blackwell
2017 LTIP5
2018 EIP PRs5
2019 EIP PRs5
2020 EIP PRs5
S Tilka
2017 LTIP5
2018 EIP PRs5
2019 EIP PRs5
2020 EIP PRs
1 March
2019 and
Dec
2020
1 March
2020 and
Dec
2020
1 March
2021
March
2017 and
Dec
2020
1 March
2019 and
Dec
2020
1 March
2020 and
Dec
2020
1 March
2021
March
2017 and
Dec
2020
1 March
2019 and
Dec
2020
1 March
2020 and
Dec
2020
1 March
2021
March
2017 and
Dec
2020
1 March
2019 and
Dec
2020
1 March
2020 and
Dec
2020
1 March
2021
18,173
(7,919)
43.57%
(10,254)
56.43%
-
$58,942
42,642
26,878
-
-
-
16,603
-
-
-
-
-
-
-
-
-
-
-
-
42,642
26,878
-
-
16,603
$102,108
-
-
-
105,015
(45,756)
43.57%
(59,259)
56.43%
-
$340,569
49,417
27,470
-
16,586
-
-
-
-
-
-
-
-
-
-
-
49,417
27,470
16,586
$102,004
-
-
-
27,257
(11,877)
43.57%
(15,380)
56.43%
-
$88,402
19,848
12,860
-
-
-
9,947
-
-
-
-
-
-
-
-
-
-
-
-
19,848
$0
12,860
$0
9,947
$61,174
-
-
-
1Share rights granted in respect of the 2020 EIP, which form part of the share based payments for 2020 to 2024 inclusive.
2Totals include vested, and vested and exercisable as at 31 December 2021.
3Fair Value of $6.15 at point of grant. FV for MD’s grant is $6.36
4Value at point of vest. Share price at 1 March 2021 was $7.44
5The initial grant date reflects the original date Performance Right were allocated in relation to the 2018 and 2019 EIP awards. “Top up” rights were granted in Dec 2020 as
a result of the Deterra Royalties demerger, in order to keep participants “whole”. Further detail can be found in the 2020 Remuneration Report.
Iluka Resources Limited, Annual Report 2021
17
83
DIRECTORS’ REPORT
For the year ended 31 December 2021
6.3 FAIR VALUE OF EQUITY GRANTS
The fair value of each restricted right or performance right and the vesting year for each incentive plan is set out below. The
maximum value of restricted rights and/or performance rights yet to vest is not able to be determined as it is dependent on
satisfaction of service and performance conditions and Iluka’s future share price. The minimum value of unvested restricted
rights and/or performance rights is nil.
Incentive
Plan
Grant Date
Grant Type
Fair Value
per Right at
Grant Date
$1
Vesting Year
Expiry year2
2016 LTIP
(MD grant)
October
2016
2017
LTIP3
March 2017
2018 EIP4 March 2019
2019 EIP5 March 2020
2020 EIP6 March 2021
2021 EIP7 March 2022
Performance Rights
– ROE Tranche
Performance Rights
– TSR Tranche
Performance Rights
– ROE Tranche
Performance Rights
– TSR Tranche
Restricted Rights
Performance Rights
Restricted Rights
Performance Rights
Restricted Rights
5.42
3.71
7.44
5.66
9.35
5.67
9.19
6.83
7.47
2021
2026
2021
2027
2020, 2021, 2022
2020,2021,2022
2022
2022
2021, 2022, 2023
2021,2022,2023
2023
2023
2022, 2023, 2024, 2025
2022, 2023, 2024, 2025
Performance Rights
6.15/6.36
2025
2025
Restricted Rights
2023,2024,2025,2026
2023, 2024, 2025, 2026
Performance Rights
2026
2026
10.10
1The fair value is calculated in accordance with the measurement criteria of Accounting Standard AASB 2 Share Based Payments.
2Rights granted under the LTIP are not automatically exercised and must be exercised by the Executive KMP before the expiry date. Rights that are not exercised by the
expiry date are automatically exercised by this date. No amounts are payable on exercise of the rights.
3 Represents the fair value of ROE and TSR tranches of 2017 LTIP.
4 Represents the 5 day WAP to the date of grant of restricted shares, and fair value of performance rights awarded under the 2018 EIP for which the performance period
concluded on 31 December 2018.
5Represents the 5 day WAP to the date of grant of restricted shares, and fair value of performance rights to be awarded under the 2019 EIP for which the performance period
concluded on 31 December 2019 .
6Represents the 5 day VWAP to the date of grant of restricted shares, and fair value of $6.15 for performance rights awarded to Executive KMP, other than the MD and fair
value of $6.36 for the Managing Director’s award under the 2020 EIP for which the performance period concluded on 31 December 2020. Shareholder approval for the
grant of Share Rights and Performance Rights to the Managing Director was obtained under ASX Listing Rule 10.14 at the 2020 Annual General Meeting.
7Represents the estimated fair value of restricted rights and performance rights to be awarded under the 2021 EIP for which the performance period concluded on 31
December 2021, calculated using the closing share price of $10.10 at 31 December 2021. The actual value will be calculated as the VWAP of ordinary shares over the five
trading days following the release of the company’s 2021 annual results.
6.4 SHAREHOLDINGS OF EXECUTIVE KMP AND THEIR RELATED PARTIES
Number of shares
Name
T O’Leary
A Stratton
M Blackwell
S Tilka
Balance held
at
1 January
20211
469,085
81,539
86,243
75,146
Vesting/
exercise of
share rights
pursuant to
LTIP
360,399
7,919
45,756
11,877
Awarded as
Restricted
Shares
pursuant to
EIP
70,827
24,904
24,879
15,900
Other
changes2
-
(8,142)
(67,113)
(59,882)
Balance held
at 31
December
20211
900,311
106,220
89,765
43,041
Minimum
shareholding
met? 3
Yes
Yes
Yes
No
1 Includes shares held directly or through a nominee or agent (e.g. family trust).
2 Other changes may include changes due to personal trades and forfeited shares.
3 As at 31 December with share price of $10.10.
84
Iluka Resources Limited, Annual Report 2021
18
DIRECTORS’ REPORT
For the year ended 31 December 2021
6.5 SHAREHOLDINGS OF NON-EXECUTIVE DIRECTORS AND THEIR RELATED PARTIES
Name
Balance held
at
1 January
2021
30,000
14,544
12,000
9,993
3,500
N/A
12,909
G Martin3
M Bastos3
R Cole3
S Corlett
L Saint
A Sutton4
Former Non-executive Directors
J Ranck
Number of shares1
Net movement
Balance held at
31 December 2021
Minimum
shareholding met? 2
0
8,278
10,000
0
14,500
22,000
-12,909
30,000
22,822
22,000
9,993
18,000
22,000
0
No
Yes
Yes
No
Yes
Yes
N/A
1Non-Executive directors do not receive share based remuneration and movements in their shareholdings reflect on-market trades.
2Minimum shareholding requirements changed in January 2022 and this assessment reflects these changes.
3 Includes shares held indirectly through a nominee or agent (e.g. family trust).
4 A Sutton was appointed on 11 March 2021.
On-market share purchases
The total number of Iluka shares acquired on-market to satisfy employee incentive schemes in 2021 was 1,548,404 at an average
price of $8.21 per share.
Transactions with key management personnel
During the financial year there were no product or services purchases by Executive KMP from the Group (2020: nil) and there are
no amounts payable at 31 December 2021 (2020: nil).
Loans with KMPs
There have been no loans to Executive KMP during the financial year (2020: nil).
19
Iluka Resources Limited, Annual Report 2021
85
AUDITOR’S INDEPENDENCE DECLARATION
For the year ended 31 December 2021
Auditor’s Independence Declaration
As lead auditor for the audit of Iluka Resources Limited for the year ended 31 December 2021, I
declare that to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit, and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
Auditor’s Independence Declaration
This declaration is in respect of Iluka Resources Limited and the entities it controlled during the period.
As lead auditor for the audit of Iluka Resources Limited for the year ended 31 December 2021, I
declare that to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit, and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
Perth
Helen Bathurst
This declaration is in respect of Iluka Resources Limited and the entities it controlled during the period.
24 February 2022
Partner
PricewaterhouseCoopers
Helen Bathurst
Partner
PricewaterhouseCoopers
Perth
24 February 2022
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
86
Iluka Resources Limited, Annual Report 2021
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
ILUKA RESOURCES LIMITED ABN 34 008 675 018
ILUKA RESOURCES LIMITED FINANCIAL REPORT ABN 34 008 675 018
FINANCIAL REPORT - 31 DECEMBER 2021
31 December 2021
Financial statements
Consolidated statement of profit or loss
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members
88
89
90
91
92
93
141
142
ABOUT THIS REPORT
These financial statements are the consolidated financial statements of the Group consisting of Iluka Resources
Limited and its subsidiaries (the Group). The financial statements are presented in Australian dollars.
Iluka Resources Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
Iluka Resources Limited
Level 17
240 St Georges Terrace
Perth WA 6000
A description of the nature of the Group's operations and its principal activities is included in the operating and
financial review section of the Directors' Report, which is not part of these financial statements.
The financial statements were authorised for issue by the directors on 24 February 2022. The directors have the
power to amend and reissue the financial statements.
Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All ASX
releases, financial reports and other relevant information are available at www.iluka.com.
87
Iluka Resources Limited, Annual Report 2021
87
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
ILUKA RESOURCES LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the year ended 31 December 2021
FOR THE YEAR ENDED 31 DECEMBER 2021
Notes
2021
$m
2020
$m
CONTINUING OPERATIONS
Revenue
Other income
Expenses
Equity accounted share of profit - Deterra
Interest and finance charges
Rehabilitation and mine closure provision discount unwind
Total finance costs
Profit before income tax
Income tax expense
Profit after income tax from continuing operations
DISCONTINUED OPERATIONS
Profit after tax from discontinued operations
Profit for the period, attributable to:
Equity holders of Iluka Resources Limited
Non-controlling interest
5
6
23
15
11
23
-
-
-
Earnings per share from continuing operations attributable to the ordinary equity
holders of the parent
Basic earnings per share
Diluted earnings per share
Earnings per share attributable to ordinary equity holders of the parent
Basic earnings per share
Diluted earnings per share
1,559.4
990.6
-
9.8
(1,067.5)
18.4
(6.2)
(8.9)
(15.1)
21.2
(799.3)
0.1
(7.7)
(26.6)
(34.3)
505.0
178.3
(139.1)
-
365.9
(74.8)
103.5
-
-
365.9
364.9
1.0
-
-
-
Cents
86.7
86.0
86.7
86.0
2,306.5
-
2,410.0
2,411.9
(1.9)
-
-
Cents
24.5
24.4
570.4
568.0
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes.
88
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Iluka Resources Limited, Annual Report 2021
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
ILUKA RESOURCES LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2021
FOR THE YEAR ENDED 31 DECEMBER 2021
Notes
2021
$m
2020
$m
Profit for the period
365.9
2,410.0
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss
Currency translation of foreign operations
Movements in foreign exchange cash flow hedges, net of tax
Items that will not be reclassified to profit or loss
Remeasurements of post-employment benefit obligations
Total other comprehensive (loss)/income for the year, net of tax
Total comprehensive income for the year, attributable to:
Equity holders of Iluka Resources Limited
Non-controlling interest
[]
Total comprehensive income for the year attributable to the equity
holders of the parent arises from:
Continuing operations
Discontinued operations
-
-
-
17
17
17
22
(9.2)
(1.9)
3.8
(7.3)
-
358.6
357.6
1.0
-
6.2
5.7
(4.2)
7.7
-
2,417.7
2,419.6
(1.9)
357.6
-
113.1
2,306.5
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
89
Iluka Resources Limited, Annual Report 2021
89
CONSOLIDATED BALANCE SHEET
ILUKA RESOURCES LIMITED
CONSOLIDATED BALANCE SHEET
As at 31 December 2021
AS AT 31 DECEMBER 2021
ASSETS
Current assets
Cash and cash equivalents
Receivables
Inventories
Derivative financial instruments
FY20 -0.1 CR
FY20 +0.1 DR
Total current assets
Non-current assets
Investments accounted for using the equity method
Derivative financial instruments
Property, plant and equipment
Deferred tax assets
Inventories
Right of use assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Payables
Derivative financial instruments
Current tax payable
Provisions
Lease liabilities
Total current liabilities
Non-current liabilities
Interest-bearing liabilities
Provisions
Financial liabilities at fair value through profit or loss
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained earnings
Non-controlling interests
Total equity
Notes
2021
$m
2020
$m
15
13
14
21
23
21
9
12
14
10
21
8
10
15
8
22
10
16
17
17
22
294.8
253.7
489.7
-
-
-
1,038.2
455.7
-
1,009.5
39.1
65.0
28.7
1,598.0
87.1
95.5
504.1
1.9
688.6
(0.1)
0.1
452.1
0.6
1,066.8
28.4
112.0
15.4
1,675.3
2,636.2
2,363.9
174.8
0.5
28.5
100.1
8.7
312.6
-
690.8
11.0
27.2
729.0
129.4
-
29.3
95.0
7.5
261.2
36.9
750.5
7.2
15.8
810.4
1,041.6
1,071.6
1,594.6
1,292.3
1,148.3
31.0
413.9
1.4
1,594.6
1,150.5
37.1
104.3
0.4
1,292.3
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
90
90
Iluka Resources Limited, Annual Report 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
ILUKA RESOURCES LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2021
FOR THE YEAR ENDED 31 DECEMBER 2021
Notes
17
17
18
Balance at 1 January 2020
Profit for the year
Other comprehensive income (loss)
Total comprehensive income
Transfer of asset revaluation reserve
Transactions with owners in their capacity
as owners:
Transfer of shares to employees, net of tax
Share-based payments, net of tax
Dividends paid
Transactions with non-controlling interests
Return of capital
space
Balance at 31 December 2020
Balance at 1 January 2021
Profit for the year
Other comprehensive income (loss)
Total comprehensive income
Notes
17
17
Transfer of asset revaluation reserve
space
Transactions with owners in their capacity as owners:
Transfer of shares to employees, net of tax
Share-based payments, net of tax
Purchase of treasury shares, net of tax
Dividends paid
18
Attributable to owners of
Iluka Resources Limited
Share
capital
$m
Other
reserves
$m
Retained
earnings
$m
Total
$m
NCI¹
$m
Total
equity
$m
1,157.6
-
-
-
-
24.0
-
11.9
11.9
(472.0)
709.6
2.0
711.6
2,411.9
(4.2)
2,411.9
7.7
2,407.7 2,419.6
(1.9) 2,410.0
7.7
(1.9) 2,417.7
-
(0.5)
0.5
-
-
-
1.7
-
1.2
-
(10.0)
(7.1)
-
-
(1.7)
3.7
-
(0.3)
-
-
3.7
(1,831.9) (1,830.7)
(0.3)
(10.0)
1.7 (1,831.9) (1,837.3)
-
-
-
-
-
3.7
- (1,830.7)
-
(10.0)
0.3 (1,837.0)
0.3
-
1,150.5
37.1
104.3
1,291.9
0.4 1,292.3
Attributable to owners of
Iluka Resources Limited
Share
capital
$m
Other
reserves
$m
Retained
earnings
$m
Total
$m
NCI¹
$m
Total
equity
$m
1,150.5
37.1
104.3 1,291.9
0.4 1,292.3
-
-
-
-
-
(11.1)
(11.1)
(0.1)
364.9
3.8
368.7
0.1
364.9
(7.3)
357.6
-
3.0
-
(9.0)
3.8
(2.2)
(3.0)
8.1
-
-
5.1
-
-
-
(59.2)
(59.2)
-
8.1
(9.0)
(55.4)
(56.3)
1.0
-
1.0
-
-
-
-
-
-
365.9
(7.3)
358.6
-
-
8.1
(9.0)
(55.4)
(56.3)
space
Balance at 31 December 2021
¹Non-controlling interest - refer to note 22(b).
1,148.3
31.0
413.9 1,593.2
1.4 1,594.6
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
91
Iluka Resources Limited, Annual Report 2021
91
CONSOLIDATED STATEMENT OF CASH FLOWS
ILUKA RESOURCES LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2021
FOR THE YEAR ENDED 31 DECEMBER 2021
Cash flows from operating activities
Receipts from customers
Receipts/(repayments) of government assistance - JobKeeper
Payments to suppliers and employees
Operating cash flow
.
Interest received
Interest paid
Income taxes paid
Exploration expenditure
Mining Area C royalty receipts
Net cash inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Sale of property, plant and equipment
Payments for options contracts
Dividends received - Deterra
Net cash outflow from investing activities
Cash flows from financing activities
Repayment of borrowings
Proceeds from borrowings
Purchase of treasury shares
Dividends paid
Principal element of lease payments
Net cash outflow from financing activities
Net increase/(decrease) in cash and cash equivalents
.
Cash and cash equivalents at 1 January
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of period
Notes
2021
$m
2020
$m
2
30
15
1,386.1
(13.9)
(858.3)
513.9
0.6
(1.7)
(149.9)
(8.0)
-
354.9
(53.6)
2.0
(0.1)
14.8
(36.9)
(117.2)
78.2
(11.9)
(55.4)
(6.6)
(112.9)
205.1
87.1
2.6
294.8
1,043.0
13.9
(860.2)
196.7
0.7
(3.2)
(164.7)
(10.0)
92.2
111.7
(71.2)
5.1
-
-
(66.1)
(304.5)
295.1
-
(32.6)
(9.3)
(51.3)
(5.7)
97.3
(4.5)
87.1
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
92
92
Iluka Resources Limited, Annual Report 2021
CONTENT OF THE NOTES TO THE FINANCIAL STATEMENTS
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
For the year ended 31 December 2021
CONTENTS OF THE NOTES TO THE FINANCIAL STATEMENTS
Basis of preparation
1.
2.
3.
Reporting entity
Basis of preparation
Critical accounting estimates and judgements
Key numbers
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Capital
15.
16.
17.
18.
19.
Risk
20.
21.
Segment information
Revenue
Expenses
Impairment of assets
Provisions
Property, plant and equipment
Leases
Income tax
Deferred tax
Receivables
Inventories
Net cash and finance costs
Contributed equity
Reserves and retained earnings
Dividends
Earnings per share
Financial risk management
Hedging
Group structure
22.
23.
Controlled entities and deed of cross guarantee
Equity accounted associate - Deterra Royalties Limited (Deterra)
Other notes
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
Contingent liabilities
Events occurring after the reporting period
Commitments
Remuneration of auditors
Share-based payments
Post-employment benefit obligations
Reconciliation of profit after income tax to net cash inflow from operating activities
Key Management Personnel
Parent entity financial information
Related party transactions
New and amended standards
Page
94
94
94
96
97
97
100
101
103
103
106
108
110
112
113
114
115
115
117
118
119
120
121
121
124
126
126
130
132
132
132
133
133
134
136
137
138
139
140
140
93
Iluka Resources Limited, Annual Report 2021
93
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Iluka Resources Limited and its subsidiaries together are referred to in this financial report as the Group.
The notes include information which is required to understand the financial statements and is material and
relevant to the operations and the financial position and performance of the Iluka Group.
Information is
considered relevant and material if:
• The amount is significant due to its size or nature;
• The amount is important in understanding the results of the Group;
• It helps to explain the impact of significant changes in the Group's business; or
• It relates to an aspect of the Group's operations that is important to its future performance.
BASIS OF PREPARATION
This section of the financial report sets out the Group’s accounting policies that relate to the financial statements
as a whole. This section also sets out information related to critical accounting estimates and judgements
applied to these financial statements.
1 REPORTING ENTITY
Iluka Resources Limited (Company or parent entity) is domiciled in Australia. The financial statements are for the
Group consisting of Iluka Resources Limited and its subsidiaries.
2 BASIS OF PREPARATION
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations
Act 2001. Iluka Resources Limited is a for-profit entity and is primarily involved in mineral sands exploration,
project development, mining operations, processing and marketing.
The consolidated financial statements of Iluka Resources Limited also comply with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
These financial statements have been prepared under the historical cost convention except for financial assets
and liabilities which are required to be measured at fair value.
New and amended standards adopted by the Group, and their related impacts on the financial statements (if
any), are detailed in note 34.
(a) Principles of consolidation
(i) Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Iluka Resources
Limited as at 31 December 2021 and the results of all subsidiaries for the year then ended. A list of controlled
entities (subsidiaries) at year-end is contained in note 22(a).
The financial statements of subsidiaries are included in the consolidated financial statements from the date on
which control commences until the date on which control ceases. Accounting policies of subsidiaries are
changed where necessary to ensure consistency with the policies adopted by the Group.
Intercompany transactions, balances, and unrealised gains on transactions between Group companies, are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of
the asset transferred.
The Group accounts for business combinations using the acquisition method when control is transferred to the
Group. Cost is measured as the fair value of the assets given, shares issued, or liabilities incurred or assumed at
the date of exchange. Transaction costs are expensed as incurred, except if related to the issue of debt or equity
securities.
94
94
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
(ii) Associates
Associates are all entities over which the Group has significant influence but not control or joint control. This is
generally the case where the Group holds between 20% and 50% of the voting rights. Investments in associates
are accounted for using the equity method of accounting from the date on which the investee becomes an
associate. Deterra Royalties Limited is accounted for as an associate.
The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy
described in note 7.
(iii) Employee Share Trust
The Group's Employee Share Schemes are administered through the Iluka Resources Limited Employee Share
Plan Trust (the trust). This trust is consolidated, as the substance of the relationship is that the trust is controlled
by the Group. Shares in the Company held by the trust are disclosed as treasury shares in the consolidated
financial statements and deducted from contributed equity, net of tax.
(b) Foreign currency translation
The consolidated financial statements are presented in Australian dollars, which is the Company's functional and
presentation currency.
Where Group companies based in Australia transact in foreign currencies, these transactions are translated into
Australian dollars using the exchange rate on that day. Foreign currency monetary assets and liabilities are
translated to Australian dollars at each reporting date exchange rate. Non-monetary assets and liabilities that are
measured at fair value in a foreign currency are translated to Australian dollars at the exchange rate when the fair
value was determined. Foreign currency differences are generally recognised in profit or loss. Non-monetary
items that are measured based on historical cost in a foreign currency are not re-translated.
The financial position of foreign operations is translated into Australian dollars at the exchange rates at the
reporting date. The income and expenses of foreign operations are translated into Australian dollars at average
exchange rates each month. Foreign currency differences are recognised in other comprehensive income and
accumulated in the foreign currency translation reserve.
(c) Government grants
The Group received $13.9 million under the Australian Government's Jobkeeper Payment scheme in the prior
reporting period ended 31 December 2020. The scheme was a response by the Australian Government to assist
businesses impacted by the economic effects of the COVID-19 pandemic. It subsidised employee costs of
eligible nominated employees, provided the employer met certain eligibility criteria and elected to participate in
the scheme.
Iluka was eligible following a significant decline in zircon demand and associated revenue in Q1 2020 and it
accordingly elected to participate in the scheme. Subsequently, Iluka voluntarily decided to return amounts
received in light of financial performance for the remainder of 2020. No amount was included in the income
statement for the year ended 31 December 2020, and a payable of $13.9 million was reflected in the balance
sheet as at that date. The full amount was repaid in the current reporting period.
(d) Rounding of amounts
The Company is of a kind referred to in Rounding Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to the rounding of amounts in the financial statements. In accordance with
that Rounding Instrument, amounts in the financial statements have been rounded to the nearest hundred
thousand dollars, or in certain cases, the nearest thousand dollars or nearest dollar.
95
Iluka Resources Limited, Annual Report 2021
95
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Group makes estimates and assumptions concerning the future in applying its accounting policies. The
resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are found in the following notes:
-
-
Rehabilitation and mine closure provisions
Net realisable value and classification of product inventory
Note
8
14
Estimates and underlying assumptions are reviewed on an ongoing basis, with revisions recognised in the period
in which the estimates are revised and future periods affected.
The Group recognises the physical and transitional impacts of climate change may affect its assets, productivity,
the markets in which it sells its products, and the jurisdictions in which it operates. The Group continues to
develop its assessment of the potential impacts of climate change and the transition to a low carbon economy
and, where possible, the potential financial impacts have been considered in the preparation of these financial
statements.
The Group’s physical and transition risk assessment process is ongoing. Changes in the Group’s climate strategy
or global decarbonisation initiatives may impact the Group’s significant judgements and key estimates and
materially impact financial results and the carrying values of certain assets and liabilities in future reporting
periods.
96
96
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
KEY NUMBERS
4 SEGMENT INFORMATION
(a) Description of segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
executive management team (the chief operating decision-makers) in assessing performance and in determining
the allocation of resources. The operating segments of the Group are:
Jacinth-Ambrosia/Mid West (JA/MW) comprises the mining operations at Jacinth-Ambrosia located in South
Australia, and associated processing operations at the Narngulu mineral separation plant in mid-west Western
Australia.
Cataby/South West (C/SW) comprises mining activities at Cataby and processing of ilmenite at Synthetic Rutile
Kiln 2, both located in Western Australia.
Sierra Rutile (SRL) comprises the integrated mineral sands mining and processing operations in Sierra Leone.
United States/Murray Basin (US/MB) comprises rehabilitation obligations in the United States (Florida and
Virginia), where mining and processing activities were substantially completed in December 2015 and certain idle
assets located in Australia (Murray Basin).
The Mining Area C (MAC) segment comprised a deferred consideration iron ore royalty interest over certain
mining tenements in Australia operated by BHP Group, which was demerged from the Group in the prior reporting
period. The results of the previous MAC operating segment are reflected in the comparative reporting period as
discontinued operations.
Cash, debt and tax balances are managed at a group level, together with exploration and other corporate
activities, and are not allocated to segments.
Where finished product capable of sale to a third party is transferred between operating segments, the transfers
are made at arm’s length prices. Any transfers of intermediate products between operating segments are made
at cost. No such transfers took place between segments during the year ended 31 December 2021 (2020: $nil).
(b) Segment information
2021
JA/MW
$m
C/SW
$m
SRL
$m
US/MB
$m
Total
$m
Total segment sales of mineral sands
Total segment freight revenue
Depreciation and amortisation expense
Changes in rehabilitation recognised in profit or loss¹
Total segment result²
Segment assets
Segment liabilities
Segment capital expenditure
Additions to non-current segment assets
599.6
39.5
(43.8)
(9.7)
331.6
685.5
323.5
36.7
36.7
639.1
19.5
(81.0)
(1.0)
237.3
852.2
315.2
17.5
66.6
232.7
10.2
(43.2)
40.4
16.1
113.3
121.9
-
-
14.4
3.9
(0.2)
31.1
32.0
149.1
177.5
7.5
7.5
1,485.8
73.1
(168.2)
60.8
617.0
1,800.1
938.1
61.7
110.8
97
Iluka Resources Limited, Annual Report 2021
97
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
2020
JA/MW
$m
C/SW
$m
SRL
$m
US/MB
$m
Total
$m
Total segment sales of mineral sands
Total segment freight revenue
Depreciation and amortisation expense
Changes in rehabilitation recognised in profit or loss¹
Total segment result²
Segment assets
Segment liabilities
Segment capital expenditure
Additions to non-current segment assets
389.0
20.6
(36.2)
1.7
242.0
609.6
270.2
7.7
44.6
300.4
8.5
(72.3)
0.2
116.8
860.2
284.8
28.4
80.0
223.1
7.8
(72.2)
4.0
(51.2)
138.7
139.2
20.9
20.9
34.5
6.1
(0.4)
2.2
(0.2)
135.7
255.0
0.8
0.8
947.0
43.0
(181.1)
8.1
307.4
1,744.2
949.2
57.8
146.3
¹Changes in rehabilitation provisions charged or credited to profit or loss include those related to closed sites, and SRL. SRL is
an open site, but is treated as closed as the carrying amount of SRL's mine development assets is fully impaired.
²Total segment result includes impairment charges, depreciation and amortisation expenses, and rehabilitation and holding
costs for closed sites that are also separately reported above.
Mineral sands revenue is derived from sales to external customers domiciled in various geographical regions.
Details of segment revenue by location of customers are as follows:
China
Asia excluding China
Europe
Americas
Other countries
Sale of goods
2021
$m
502.6
247.6
407.9
265.9
61.8
1,485.8
2020
$m
316.7
211.4
341.6
76.7
0.6
947.0
Revenue of $265.3 million and $183.9 million was derived from two external customers of the mineral sands
segments, which individually account for greater than 10% of the total segment revenue (2020: revenues of
$144.1 million and $90.7 million from two external customers).
98
98
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Segment result is reconciled to profit before income tax as follows:
Segment result
Interest income
Asset sales and other income
Marketing and selling
Corporate and other costs
Major Projects, Engineering and Innovation
Depreciation
Interest and finance charges
Net foreign exchange gains
Equity accounted profit - Deterra
Gain on remeasurement of put option
Impairment - exploration assets
Profit before income tax from continuing operations
2021
$m
617.0
0.5
(0.2)
(10.8)
(64.3)
(45.2)
(3.0)
(5.3)
7.6
18.4
(3.4)
(6.3)
505.0
Total segment assets and total segment liabilities are reconciled to the balance sheet as follows:
Segment assets
Corporate assets
Cash and cash equivalents
Deferred tax assets
Investment in Deterra Resources Limited
Total assets as per the balance sheet
Segment liabilities
Corporate liabilities
Current tax payable
Interest-bearing liabilities
Total liabilities as per the balance sheet
1,800.1
46.6
294.8
39.0
455.7
2,636.2
938.1
75.0
28.5
-
1,041.6
2020
$m
307.4
0.6
(0.2)
(11.5)
(54.6)
(62.3)
(3.4)
(6.0)
1.2
0.1
19.4
(12.4)
178.3
1,744.2
50.1
86.9
28.4
452.1
2,361.7
949.2
54.0
29.3
36.9
1,069.4
99
Iluka Resources Limited, Annual Report 2021
99
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
5 REVENUE
Continuing operations
Sales revenue
Sale of goods
Freight revenue
Other revenue
Interest
(a) Sale of mineral sands
Notes
2021
$m
2020
$m
5(a)
5(b)
5(c)
1,485.8
73.1
0.5
1,559.4
947.0
43.0
0.6
990.6
The Group earns revenue by mining, processing, and subsequently selling mineral sands (including zircon, rutile,
synthetic rutile and ilmenite) and monazite by export to customers based in the Americas, Europe, China, the rest
of Asia, and other countries under a range of commercial terms.
Revenue from the sale of product is recognised when control has been transferred to the customer, generally
being when the product has been dispatched and is no longer under the physical control of the Group. In cases
where control of product is transferred to the customer before dispatch takes place, revenue is recognised when
the customer has formally acknowledged their legal ownership of the product, which includes all inherent risks
associated with control of the product. In these cases, product is clearly identified and immediately available to
the customer.
Sales to customers are generally denominated in US Dollars, which are translated into the functional currency of
the Group using the spot exchange rate applicable on the transaction date. The effect of variable consideration
arising from rebates, discounts and other similar arrangements with customers is included in revenue to the
extent that it is highly probable that there will be no significant reversal of the cumulative amount of revenue
recognised when any pricing uncertainty is resolved. Revenue is recognised net of duties and other taxes.
The Group does not expect to have any contracts where the period between the transfer of the promised goods
or services to the customer and payment by the customer exceeds one year. Accordingly, the group does not
adjust transaction prices for the time value of money.
(b) Freight revenue
The Group also earns revenue from freighting its products to customers in accordance with the Incoterms in
each particular sales contract. Freight revenue is recognised to the extent that the freight service has been
delivered, specifically with reference to the proportion of completed freight distance to total freight distance,
which is determined by the Group at each reporting date.
Freight revenue is allocated from the overall contract price at its standalone selling price (where observable) or
otherwise at its estimated cost plus margin.
Freight revenue includes $0.7 million relating to contracts in place at the end of the prior year (2020: $1.5 million).
Freight revenue of $3.8 million has been deferred at the end of the current year in relation to unfulfilled shipping
obligations.
(c) Interest income
Interest income is recognised in profit or loss as it accrues, using the effective interest method.
100
100
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
6 EXPENSES
Expenses
Cash costs of production
Depreciation/amortisation
Inventory movement - cash costs of production
Inventory movement - non-cash production costs
Cost of goods sold
Ilmenite concentrate and by-product costs
Depreciation (idle, corporate and other)
Restructure and idle capacity charges
Rehabilitation costs for closed sites
Government royalties
Marketing and selling costs
Corporate and other costs
Major projects, exploration and innovation
Put option remeasurement loss¹
Net loss on disposal of property, plant and equipment
Impairment - exploration asset
Notes
2021
$m
2020
$m
6(a)
6(b)
6(c)
6(d)
6(e)
6(f)
6(g)
7(b)
559.1
156.0
67.0
12.6
794.7
20.1
15.2
33.4
(60.8)
38.0
107.5
64.3
45.2
3.4
0.2
6.3
1,067.5
537.1
178.9
(142.3)
(39.9)
533.8
21.6
5.9
20.9
(7.2)
22.3
70.7
54.6
62.3
-
2.0
12.4
799.3
(a) Cash costs of production
Cash costs of production include costs for mining and concentrating, transport of heavy mineral concentrate,
mineral separation, synthetic rutile production, externally purchased ilmenite, and production overheads; but
exclude Australian state and Sierra Leone government royalties which are reported separately.
(1,067.5)
(799.3)
(b) Cost of goods sold
Cost of goods sold is the inventory value of each tonne of finished product sold. All production is added to
inventory at cost, which includes direct costs and an appropriate portion of fixed and variable overhead
expenditure, including depreciation and amortisation, allocated on the basis of relative sales value. The inventory
value recognised as cost of goods sold for each tonne of finished product sold is the weighted average value per
tonne for the stockpile from which the product is sold.
Inventory movement represents the movement in balance sheet inventory of work in progress and finished
goods, including the non-cash depreciation and amortisation components and movement in the net realisable
value adjustments.
(c) Ilmenite concentrate and by-product costs
Ilmenite and by-product costs include by-product costs such as for iron concentrate processing, activated
carbon, monazite treatment, and wet high intensity magnetic separation (WHIMS) ilmenite transport costs.
(d) Restructure and idle capacity charges
Idle capacity charges reflect ongoing costs incurred during periods of no or restricted production. The costs
incurred in 2021 increased due to the SR2 kiln being idled in February and March to reduce inventory levels.
101
Iluka Resources Limited, Annual Report 2021
101
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
(e) Rehabilitation costs for closed sites
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
These costs relate to adjustments to the rehabilitation provision for closed sites arising from the annual review
of rehabilitation programmes and estimate, and are recognised in profit or loss. Details regarding the annual
review for the current reporting period, together with the applicable accounting policy details, are outlined in note
8.
(f) Corporate and other costs
Corporate and other costs reflect expenses required to operate, govern, and grow the business and operations,
including employee expenses, office costs, and other overheads for finance, legal, human resources, and senior
management. Also included are $24.3 million (2020: $20.5 million) of centralised support costs to serve the
operations,
information
including resource development and mine planning, procurement and logistics,
technology, human resources support, and insurance premiums.
(g) Major projects, exploration and innovation
These costs relate to activities associated with developing our resources,
planning.
including exploration and mine
(h) Other required disclosures
Expenses also include the following:
Employee benefits (excluding share-based payments)
Share-based payments
Exploration expenditure
Operating leases
Inventory NRV write-downs - finished goods and WIP
2021
$m
2020
$m
210.5
10.6
9.3
4.5
11.4
202.6
4.1
12.8
3.0
13.0
(246.3)
(235.5)
¹A put option remeasurement gain of $19.4 million is included in other income in the comparative period.
102
102
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
7 IMPAIRMENT OF ASSETS
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Assets are assessed for the presence of impairment indicators whenever events or changes in circumstances
suggest that their carrying amounts may not be recoverable. For the purposes of impairment indicator
assessments (and, if required, impairment testing) operating assets are grouped at the lowest levels for which
there are separately identifiable cash flows (Cash Generating Units - CGUs).
If an impairment indicator is found to be present for a CGU, then the Group estimates its recoverable amount and
compares it to its carrying amount. The recoverable amount of each CGU is determined as the higher of
value-in-use and fair value less costs of disposal (FVLCD) estimated based on the discounted present value of
future cash flows (a level 3 fair value estimation method) and other adjustments. Assets that are not currently in
use and not scheduled to be brought back into use (idle assets) are considered on a standalone basis. If
necessary, an impairment charge is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount.
(a) Impairment indicator assessments
The Group assessed CGUs and assets for the presence of impairment indicators, including those which may
have arisen due to the continuing global economic impact of the ongoing COVID-19 pandemic.
No impairment indicators were found to be present in respect of any CGU at 31 December 2021, however, an
impairment indicator was present in respect of an exploration asset following a decision by the Group to cease
related exploration activities, and expiration of applicable exploration licences. Refer to (b), below.
The Group did not note any conditions that suggest previously recognised impairments can be reversed.
(b) Impairment testing - exploration asset
The Group performed an impairment test on the exploration asset and estimated the recoverable to be $nil.
Accordingly the Group wrote the carrying amount of $6.3 million down, resulting in an impairment loss of $6.3
million, included in expenses in note 6.
8 PROVISIONS
Current
Rehabilitation and mine closure
Employee benefits - long service leave
Workers compensation and other provisions
FY20 -0.1 CR
Non-current
Rehabilitation and mine closure
Employee benefits - long service leave
Retirement benefit obligations
FY20 +0.1 DR
Notes
8(a)
8(b)
8(a)
8(b)
29
2021
$m
81.2
12.0
6.9
100.1
660.5
3.7
26.6
690.8
-
-
2020
$m
77.3
13.0
4.7
95.0
0.1
720.7
3.0
26.8
750.5
(0.1)
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that resources will be expended to settle the obligation and a reliable estimate can be made
of the amount of the obligation.
103
Iluka Resources Limited, Annual Report 2021
103
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
(a) Rehabilitation and mine closure
The movements in the rehabilitation and mine closure provision are set out below:
Movements in rehabilitation and mine closure provisions
Balance at 1 January
Change in provisions - reassessment of provision for closed sites
Change in provisions - additions to property, plant and equipment
Rehabilitation and mine closure provision discount unwind
Foreign exchange rate movements
Amounts spent during the year
Balance at 31 December
Notes
$m
15(d)
798.0
(60.8)
49.3
8.9
14.1
(67.8)
741.7
The Group has obligations to dismantle and remove certain items of property, plant and equipment and to restore
and rehabilitate the land on which they sit.
A provision is raised for the estimated cost of performing the rehabilitation and restoration obligations existing at
balance date, discounted to present value using an appropriate pre-tax discount rate.
Where the obligation is related to an item of property, plant and equipment, its cost includes the present value of
the estimated costs of dismantling and removing the asset, and restoring and rehabilitating the site on which it is
located. Costs that relate to obligations arising from waste created by the production process are recognised as
production costs in the period in which they arise.
The increase in the provision associated with unwinding of the discount rate is recognised as a finance cost -
refer to note 15(d).
Reductions in the expected rehabilitation liability that relate to closed sites are credited to profit or loss. SRL is an
open site, however reductions in its expected rehabilitation liability are also credited to profit or loss since the
related rehabilitation assets are fully impaired. Credits to profit or loss are reported within the expense item
rehabilitation costs for closed sites in note 6.
The total rehabilitation and mine closure provision of $741.7 million (2020: $798.0 million) includes $299.8
million (2020: $375.2 million) for assets no longer in use. A reduction of $60.8 million (2020: reduction of $8.1
million) in the expected rehabilitation liability for closed sites and SRL was recognised in the current reporting
period, which has accordingly been credited to profit or loss. SRL is an open site, but is treated as closed as the
carrying amount of SRL's rehabilitation assets is fully impaired. The provision reduction in the current reporting
period was due to agreements with regulators and landholders in the US being finalised ($39.6 million reduction),
and reduced rehabilitation requirements for SRL ($39.8 million reduction), partly offset by increases in the
rehabilitation for closed Australian sites ($17.9 million increase).
Open site rehabilitation liabilities increased by $49.3 million (2020: increased by $86.6 million). The increase in
the current period is due to higher earthmoving rates and a larger open area (driven by the move to Ambrosia and
subsequent return to Jacinth North) at Jacinth-Ambrosia ($29.7 million), and increased mining footprint at
Cataby ($19.3 million) due to the progression of mining at that operation. Jacinth-Ambrosia and Cataby comprise
$156.6 million and $157.8 million of the rehabilitation provision balance, respectively.
104
104
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Key estimate: Rehabilitation and mine closure provisions
The Group’s assessment of the present value of the rehabilitation and mine closure provisions requires the use
of significant estimates and judgements, including the future cost of performing the work required, timing of the
cash flows, discount rates, final remediation strategy, and future land use requirements. The provision can also
be impacted prospectively by changes to legislation or regulations.
The provisions are reassessed at least annually. A change in any of the assumptions used to determine the
provisions could have a material impact on the carrying value of the provision. In the case of provisions for
assets which remain in use, adjustments to the provision are offset by a change in the carrying value of the
related asset. Where the provisions are for assets no longer in use, such as mines and processing sites that
have been closed, any adjustment is reflected directly in profit or loss.
Key estimate: Discount rate for provisions
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability to the extent they are not
included in the cash flows.
Rehabilitation and mine closure provisions for Australia, the US and Sierra Rutile have been calculated by
discounting risk adjusted cash flows at discount rates representing the risk-free rates of applicable government
bonds for the currencies in which each respective provision is recognised. The discount rates used for
Australia, the US and Sierra Rutile are unchanged from the prior reporting period.
A one percent increase in only the discount rate used to calculate rehabilitation and mine closure provisions
would result in a decrease to their closing balance of $62.7 million. Of this amount, $46.2 million would be
recognised as a decrease in rehabilitation assets for open sites, and $16.6 million would be recognised as a
credit in profit or loss for closed or previously impaired sites.
(b) Employee benefits
The employee benefits provision relates to long service leave entitlements measured as the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date,
discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows. Liabilities for annual leave are included in
payables.
The current provision represents amounts for vested long service leave for which the Group does not have an
unconditional right to defer settlement, regardless of when the actual settlement is expected to occur. However,
based on past experience, the Group does not expect all employees to take the full amount of accrued leave or
require payment within the next 12 months.
105
Iluka Resources Limited, Annual Report 2021
105
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
9 PROPERTY, PLANT AND EQUIPMENT
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
At 1 January 2020
Cost
Accumulated depreciation¹
Opening written down value
Additions
Disposals
Depreciation
Exchange differences²
Impairment of assets
Transfers
Closing written down value
At 31 December 2020
Cost
Accumulated depreciation
Closing written down value
Plant
Year ended 31 December 2021
Additions
Disposals
Depreciation
Exchange differences²
Impairment
Transfers
Closing written down value
Plant
At 31 December 2021
Cost
Accumulated depreciation
Closing written down value
Plant,
machinery &
equipment³
$m
Mine
reserves &
development³
$m
Exploration
&
evaluation
$m
Land &
buildings $m
Total
$m
320.5
(148.9)
171.6
2,536.7
(2,078.1)
458.6
1,265.4
(787.3)
478.1
43.6
(25.8)
17.9
4,166.2
(3,040.1)
1,126.2
1.1
(3.7)
(19.9)
(5.7)
-
1.2
144.6
38.1
(0.2)
(87.4)
(4.9)
-
(4.8)
399.4
106.9
-
(68.9)
(3.1)
(4.4)
3.6
512.2
-
(0.1)
-
0.8
(8.0)
-
10.6
146.1
(4.0)
(176.2)
(12.9)
(12.4)
-
1,066.8
301.1
(156.5)
144.6
2,450.0
(2,050.6)
399.4
1,215.8
(703.6)
512.2
35.0
(24.4)
10.6
4,001.9
(2,935.1)
1,066.8
0.1
-
(10.8)
2.9
-
(0.2)
136.6
51.8
(0.4)
(85.5)
1.1
-
0.2
366.5
58.9
-
(69.1)
(0.1)
(6.3)
-
495.6
-
-
-
0.2
-
-
10.8
110.8
(0.4)
(165.4)
4.0
(6.3)
-
1,009.5
311.8
(175.2)
136.6
2,482.7
(2,116.2)
366.5
1,288.9
(793.3)
495.6
35.5
(24.7)
10.8
4,118.9
(3,109.4)
1,009.5
¹Accumulated depreciation includes cumulative impairment charges.
²Exchange differences arising on translation of the gross cost and accumulated depreciation of items of property, plant and
equipment held by foreign operations are reflected net.
³Iluka reclassified certain items of property, plant and equipment from mine reserves and development to plant, machinery and
equipment. Comparatives have been restated to reflect the reclassification.
106
106
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
(a) Property, plant and equipment
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Property, plant and equipment is stated at cost, less accumulated depreciation and impairment charges. Cost
includes:
•
•
•
•
expenditure that is directly attributable to the acquisition of the items;
direct costs associated with the commissioning of plant and equipment, including pre-commissioning costs
in testing the processing plant;
if the asset is constructed by the Group, the cost of all materials used in construction, direct labour on the
project, project management costs and unavoidable borrowing costs incurred during construction of assets
with a construction period greater than 12 months and an appropriate proportion of variable and fixed
overheads; and
the present value of the estimated costs of dismantling and removing the asset, and restoring and
rehabilitating the site on which it is located.
As set out in note 8, in the case of rehabilitation provisions for assets which remain in use, adjustments to the
carrying value of the provision are offset by a change in the carrying value of the related asset. Total additions in
the year include $49.3 million (2020: $86.6 million) relating to rehabilitation.
(b) Maintenance and repairs
Certain items of plant used in the primary extraction, separation and secondary processing of extracted minerals
are subject to a major overhaul on a cyclical basis. Costs incurred during such overhauls are characterised as
either capital in nature or repairs and maintenance. Work performed may involve:
(i) the replacement of a discrete sub-component asset, in which case an asset addition is recognised and the
book value of the replaced item is written off; and
(ii) demonstrably extending the useful life or functionality of an existing asset, in which case the relevant cost is
added to the capitalised cost of the asset in question.
Costs incurred during a major cyclical overhaul which do not constitute (i) or (ii) above, are written off as repairs
and maintenance as incurred. General repairs and maintenance which are not characterised as part of a major
cyclical overhaul are expensed as incurred.
(c) Depreciation and amortisation
Items of property, plant and equipment are depreciated on a straight-line basis over their useful
lives. The
estimated useful life of buildings is the shorter of applicable mine life or 25 years; plant and equipment is
between 2 and 20 years. Land is not depreciated.
Expenditure on mine reserves and development is amortised over the life of mine, based on the rate of depletion
of the economically recoverable reserves (units of production methodology).
If production has not yet
commenced, or the mine is idle, amortisation is not charged.
(d) Assets not being depreciated
Included in plant, machinery and equipment, mine reserves and development, and land and buildings are amounts
totalling $41.7 million, $10.4 million and $nil, respectively, relating to assets under construction which are
currently not being depreciated as the assets are not ready for use (2020: $26.9 million, $7.9 million and $0.6
million, respectively).
In addition, within property, plant and equipment, excluding exploration and land assets, are amounts totalling
$63.2 million which have not been depreciated in the year as mining of the related area of interest has not yet
commenced (2020: $62.3 million).
107
Iluka Resources Limited, Annual Report 2021
107
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
(e) Exploration, evaluation and development expenditure
Exploration and evaluation expenditure is accumulated separately for each area of interest. Such expenditure
comprises net direct costs and an appropriate portion of related overhead expenditure. Expenditure is carried
forward when incurred in areas for which the Group has rights of tenure and where economic mineralisation is
indicated, but activities have not yet reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable ore reserves, and active and significant operations in relation to the area
are continuing. Each such project is regularly reviewed. If the project is abandoned or if it is considered unlikely
the project will proceed to development, accumulated costs to that point are written off immediately.
Each area of interest is limited to a size related to a known mineral resource capable of supporting a mining
operation. Identifiable exploration assets acquired from another mining company are recognised as assets at
their cost of acquisition.
Projects are advanced to development status when it is expected that accumulated and future expenditure on
development can be recouped through project development or sale. Capitalised exploration is transferred to Mine
Reserves once the related ore body achieves JORC reserve status (reported in accordance with JORC, 2012) and
has been included in the life of mine plan.
All of the above expenditure is carried forward up to commencement of operations at which time it is amortised
in accordance with the reserves and development depreciation policy noted in (c) above.
(f)
Impairment of PPE
Refer to note 7 for details on impairment testing.
10 LEASES
(a) Amounts recognised in the statement of financial position
Right-of-use assets
Buildings
Plant, machinery and equipment
Lease liabilities
Current
Non-current
2021
$m
8.2
20.5
28.7
8.7
27.2
35.9
2020
$m
9.2
6.2
15.4
7.5
15.8
23.3
Additions to the right-of-use assets during the reporting period were $21.1 million (2020: $2.6 million).
Right-of-use assets are reflected net of incentives received. The maturity analysis of lease liabilities is included in
note 20(d).
108
108
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
(b) Amounts recognised in the statement of profit or loss
Amortisation charge of right-of-use assets
Buildings
Plant, machinery and equipment
Borrowing costs
Expense relating to short term leases, low value leases and leases with variable
payments
...
2021
$m
2020
$m
1.0
5.2
6.2
0.9
4.5
1.3
7.5
8.8
1.3
3.0
Payments for the principal element of leases of $6.6 million (2020: $9.3 million) are included in the statement of
cash flows.
The group leases various offices, warehouses, equipment and vehicles. Rental contracts are typically made for
fixed periods of 6 months to 10 years, but may have extension options as described below.
Contracts may contain both lease and non-lease components. The group allocates the consideration in the
contract to the lease and non-lease components based on their relative stand-alone prices.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
The lease agreements do not impose any covenants other than the security interests in the leased assets that are
held by the lessor. Leased assets may not be used as security for borrowing purposes.
Lease liabilities
Liabilities arising from a lease are initially measured on a present value basis by discounting the following lease
payments to their present value:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable
• variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the
commencement date
• amounts expected to be payable by the group under residual value guarantees
• the exercise price of a purchase option if the group is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of
the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases in the Group, the incremental borrowing rate is used, being the
rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar
value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. The
weighted average borrowing rate used for the year was 3.1% (2020: 4.9%).
Subsequent to initial recognition, lease liabilities are carried at amortised cost. Payments are allocated between
repayment of principal and borrowing costs, which are charged to profit or loss over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of the liability for each period.
109
Iluka Resources Limited, Annual Report 2021
109
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
Right-of-use assets
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Right-of-use assets are initially recognised at cost, comprising:
• The amount of the lease liability
• Any lease payments made at or before the commencement date, less any incentives received
• Initial direct costs, and
• Restoration costs.
Subsequently, right-of-use assets are depreciated over the shorter of the asset's useful life and the lease term on
a straight-line basis. Where the Group is reasonably certain to exercise a purchase option, the right-of-use asset
is depreciated over the underlying asset’s useful life.
Short term leases, leases of low value assets and leases containing variable payments
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are
recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term
of 12 months or less.
11 INCOME TAX
Income tax expense comprises current and deferred tax and is recognised in profit or loss, as disclosed in (a)
below, except to the extent that it relates to items recognised directly in equity or other comprehensive income as
disclosed in (c) below.
(a) Income tax expense
Current tax
Deferred tax
(Over)/under provided in prior years
Income tax expense is attributable to:
Profit from continuing operations
Profit from discontinued operation
Aggregate income tax expense
(b) Reconciliation of income tax expense to prima facie tax payable
Profit from continuing operations before income tax expense
Profit from discontinued operations before income tax expense
Tax at the Australian tax rate of 30% (2020: 30%)
Notes
2021
$m
146.6
(5.4)
(2.1)
139.1
139.1
-
139.1
505.0
-
505.0
151.5
2020
$m
98.4
(3.1)
0.2
95.5
74.8
20.7
95.5
178.3
2,327.2
2,505.5
751.7
110
110
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Tax effect of amounts not deductible (taxable) in calculating taxable income:
Equity accounted share of profit - Deterra
Non-assessable income
SRL minimum tax¹
Non-deductible expenses
Other items
Research and development credit
Recognition of historical alternative minimum tax (AMT) credits
Losses not recognised by overseas operations
Demerger gain
Difference in overseas tax rates
(Over)/under provision in prior years
Income tax expense
(5.4)
(23.6)
5.4
3.7
0.5
-
-
10.0
-
142.1
(0.9)
(2.1)
139.1
-
(8.0)
27.0
6.1
4.1
(3.2)
(4.5)
3.0
(680.7)
95.5
(0.2)
0.2
95.5
¹ The SRL minimum tax was 3.5% of revenue until 1 August 2021, when it was reduced to 0.5% of revenue.
(644.1)
(2,601.0)
No tax benefits have been recognised in respect of exploration activities of overseas operations as their recovery
is not currently considered probable.
The idling of the US operations at the end of 2015 means that the recovery of US state tax losses are not
considered probable. Unrecognised US state tax losses for which no deferred tax asset has been recognised are
US$251.0 million (equivalent to $346.3 million) at 31 December 2021 (2020: US$237.1 million, equivalent to
$308.3 million).
Unused capital losses for which no deferred tax asset has been recognised are approximately $80.5 million
(2020: $79.4 million) (tax at the Australian rate of 30%: $24.1 million (2020: $23.8 million)). The benefit of these
unused capital losses will only be obtained if sufficient future capital gains are made and the losses remain
available under tax legislation.
The write-down of Sierra Rutile Limited in 2019 means that the recovery of Sierra Leone tax losses are not
considered probable. Unrecognised Sierra Leone tax losses for which no deferred tax asset has been recognised
are US$509.7 million at 31 December 2021 (31 December 2020: US$502.3 million).
(c) Tax expense relating to items of other comprehensive income
Changes in fair value of foreign exchange cash flow hedges
Actuarial gains (losses) on retirement benefit obligation
2021
$m
0.6
(1.1)
(0.5)
2020
$m
(2.6)
(1.8)
(4.4)
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses. The current tax charge is calculated using the tax
rates and tax laws enacted or substantively enacted at the reporting date in the countries where the Group
operates and generates taxable income.
111
Iluka Resources Limited, Annual Report 2021
111
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
12 DEFERRED TAX
Deferred tax asset:
The balance comprises temporary differences attributable to:
Employee provisions
Provisions
Lease liabilities
Other
Gross deferred tax assets
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
2021
$m
2020
$m
8.2
178.4
10.7
5.7
203.0
8.1
166.3
7.0
10.2
191.6
Amount offset from deferred tax liabilities pursuant to set-off provision
Net deferred tax assets
(163.9)
39.1
(163.2)
28.4
Deferred tax liability:
The balance comprises temporary differences attributable to:
Property, plant and equipment
Inventory
Treasury shares
Right-of-use assets
Receivables
Other
Gross deferred tax liabilities
Amount offset to deferred tax assets pursuant to set-off provision
Net deferred tax liabilities
Movements in net deferred tax balance:
Balance at 1 January
Credited to the income statement
Over provision in prior years
Charged directly to equity
Transfers
Balance at 31 December
Deferred tax policy
(134.5)
(15.3)
(3.1)
(10.3)
(0.3)
(0.4)
(163.9)
163.9
-
28.4
5.4
1.0
4.4
(0.1)
39.1
(138.7)
(17.3)
(0.5)
(6.5)
(0.2)
-
(163.2)
163.2
-
22.1
5.9
7.4
(2.6)
(4.4)
28.4
Deferred income tax is provided on all temporary differences at the balance sheet date between accounting
carrying amounts and the tax bases of assets and liabilities.
Deferred income tax liabilities are recognised for all taxable temporary differences, other than for the exemptions
permitted under accounting standards.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent it is probable that taxable profit will be available to utilise these
deductible temporary differences, other than for the exemptions permitted under accounting standards. The
carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
112
112
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are also recognised in equity and not in the income
statement.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable
entity and the same taxation authority.
Deferred tax recognised
As at 31 December 2021, there were no carried forward tax losses recognised by SRL (2020: $nil million).
13 RECEIVABLES
Trade receivables
Other receivables
Prepayments
FY20 +0.1 DR
2021
$m
213.8
16.5
23.4
253.7
-
2020
$m
55.0
26.6
13.9
95.5
0.1
Trade receivables are recognised initially at the value of the invoice sent to the customer and subsequently at the
amount considered recoverable, translated using the spot exchange rate at balance date with translation
differences accounted for in line with the Group's accounting policy (refer note 2). Recognition occurs at the
earlier of dispatch or formal acknowledgement of legal ownership by a customer, as this is the point in time that
the consideration is unconditional because only the passage of time is required before payment is due. Trade
receivables are generally due within 47 days of the invoice being issued (2020: 43 days).
The Group has applied the simplified approach to measuring expected credit losses (ECL), which uses a lifetime
expected loss allowance for all trade receivables. Based on the payment profiles of sales over the past three
years and historical credit losses experienced within this period, the Group concluded that the lifetime ECL would
be negligible and therefore no loss allowance was required at 31 December 2021 (2020: nil). The amount of any
impairment loss is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income
within other expenses.
Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan
with the group, and a failure to make contractual payments for a period of greater than 120 days past due.
Impairment losses on trade receivables and subsequent recoveries of amounts previously written off are
recognised within other expenses.
There was $3.4 million overdue at balance date (2020: $6.6 million), of which $nil million is less than 28 days
overdue (2020: $0.5 million). Due to the short-term nature of the Group’s receivables, their carrying value is
considered to approximate fair value.
(a) Trade receivables purchase facility
Iluka has a purchase facility for the sale of eligible trade receivables. Trade receivables sold using the facility
were previously covered by an insurance policy, the terms of which (when taken together with the terms
applicable to the facility) resulted in them being derecognised by the Group, since the majority of the significant
risks and rewards of ownership had transferred to the purchaser, including credit risk. Iluka’s balance sheet
included a continuing involvement asset of $12.0 million in other receivables (and a corresponding continuing
involvement liability was reflected in payables for the same amount), comprising the maximum first loss
specified under the facility and deductible amounts under the insurance policy.
113
Iluka Resources Limited, Annual Report 2021
113
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Iluka elected not to renew the insurance policy during the current reporting period, and accordingly does not
derecognise trade receivables sold using the facility as the majority of the risks and rewards of ownership,
including credit risk, are retained by the Group.
Trade receivables include $18.9 million of sold trade receivables at the reporting date. A corresponding liability is
included under payables for the same amount, representing the Group’s risk associated with sold trade
receivables.
(b) Credit risk
At 31 December 2021 the trade receivables balance was $213.8 million, with $30.3 million by letters of credit. As
a result, the Group had $183.5 million of uninsured receivables at the reporting date (2020: $nil). Further details
regarding the Group's approach to managing customer credit risk are outlined in note 20(b).
14 INVENTORIES
Current
Work in progress
Finished goods
Consumable stores
Total current inventories
FY20 -0.1 CR
Non-current
Work in progress
Total non-current inventories
Total inventories
2021
$m
224.6
220.9
44.2
489.7
-
65.0
65.0
2020
$m
156.6
312.6
34.9
504.1
(0.1)
112.0
112.0
554.7
616.1
Inventories are valued at the lower of weighted average cost and estimated net realisable value. The net
realisable value is the estimated selling price in the normal course of business, less any anticipated costs of
completion and the estimated costs to sell, including royalties.
There are separate inventory stockpile values for each product, including Heavy Mineral Concentrate (HMC) and
other intermediate products, at each inventory location.
Weighted average cost includes direct costs and an appropriate portion of fixed and variable overhead
expenditure, including depreciation and amortisation. As a result of mineral sands being co-products from the
same mineral separation process, costs are allocated to inventory on the basis of the relative sales value of the
finished goods produced. No cost is attributed to by-products, except direct costs.
Finished goods inventory of $36.1 million (2020: $34.4 million) is carried at net realisable value, with all other
product inventory carried at cost.
Consumable stores include ilmenite acquired from third parties, flocculant, coal, diesel and warehouse stores. A
regular and ongoing review is undertaken to establish the extent of surplus, obsolete or damaged stores, which
are then valued at estimated net realisable value.
Inventories expected to be sold (or consumed in the case of stores) within 12 months after the balance sheet
date are classified as current assets; all other inventories are classified as non-current assets.
114
114
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Key estimate: Net realisable value and classification of product inventory
The Group’s assessment of the net realisable value and classification of its inventory holdings requires the use
of estimates, including the estimation of the relevant future product price and the likely timing of the sale of the
inventory.
During the year, inventory write-downs of $11.4 million occurred for work in progress or finished goods (2020:
$13.0 million). If finished goods future selling prices were 5% lower than expected, an inventory write-down of
$1.6 million would be required at 31 December 2021 (2020: $1.5 million).
Inventory of $65.0 million (2020: $112.0 million) was classified as non-current as it is not expected to be sold
within 12 months of the balance sheet date.
CAPITAL
15 NET CASH AND FINANCE COSTS
Cash and cash equivalents
Cash at bank and in hand
Deposits at call
Total cash and cash equivalents
Non-current interest-bearing liabilities (unsecured)
Multi Optional Facility Agreement
Deferred borrowing costs
Total interest-bearing liabilities
Net cash
(a) Cash and cash equivalents
2021
$m
92.6
202.2
294.8
-
-
-
2020
$m
87.1
-
87.1
(38.0)
1.1
(36.9)
294.8
50.2
Cash and cash equivalents include cash on hand and deposits held at call with financial institutions with original
maturities of three months or less.
Cash and deposits are at floating interest rates between 0.1% and 3.3% (2020: 0.0% and 3.0%) on Australian and
foreign currency denominated deposits.
(b) Interest-bearing liabilities
Interest-bearing liabilities are initially recognised at fair value less directly attributable transaction costs, with
subsequent measurement at amortised cost using the effective interest rate method. Under the amortised cost
method the difference between the amount initially recognised and the redemption amount is recognised in profit
or loss over the period of the borrowings on an effective interest basis.
Interest-bearing liabilities are classified as current liabilities unless the Group has an unconditional right to defer
settlement for at least 12 months after the balance sheet date.
115
Iluka Resources Limited, Annual Report 2021
115
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
(i) Multi Optional Facility Agreement
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
The Multi Optional Facility Agreement (MOFA) comprises a series of unsecured committed five year bilateral
revolving credit facilities with several domestic and foreign institutions, totalling A$512.0 million (2020: A$500.1
million). The facilities are denominated in both AUD and USD.
The table below details the facility expiries:
A$million
At 31 December 2021
At 31 December 2020
Total
facility
512.0
500.1
2022
-
-
Facility Expiry
2023
-
2024
512.0
-
500.1
2025
-
-
2026
-
-
Undrawn MOFA facilities at 31 December 2021 were A$512.0 million (2020: A$462.1 million).
(c) Interest rate exposure
No amount was drawn down on the facility at 31 December 2021 (2020: $38.0 million was subject to an effective
weighted average floating interest rate of 1.5%). The contractual repricing date of all floating rate interest-bearing
liabilities at the balance date is within one year.
(d) Finance costs
Interest charges on interest-bearing liabilities
Bank fees and similar charges
Amortisation of deferred borrowing costs
Lease borrowing costs
Rehabilitation and mine closure provision discount unwind
Rehabilitation provision discount rate changes
Total finance costs
(i) Amortisation of deferred borrowing costs
2021
$m
0.8
3.8
0.7
0.9
8.9
-
15.1
2020
$m
1.9
3.9
0.6
1.3
14.4
12.2
34.3
Fees paid on establishment of borrowing facilities are recognised as transaction costs and amortised over the
period until the next expected facility extension.
(ii) Rehabilitation and mine closure provision discount unwind
Rehabilitation and mine closure unwind represents the cost associated with the passage of time. Rehabilitation
provisions are recognised as the discounted value of the present obligation to restore, dismantle and rehabilitate
with the increase in the provision due to passage of time being recognised as a finance cost in accordance with
the policy described in note 8(a).
(iii) Rehabilitation provision discount rate changes
Any change in the discount rate for closed sites is recorded as a finance cost. In the prior reporting period, Iluka
re-set the risk free discount rates used in calculating rehabilitation provisions in the US and Sierra Leone due to
the continuing decline in applicable US Treasury Bond Rates. The 5- and 10-year US Treasury Bond Rates are
used as a proxy for risk-free discount rates.
116
116
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
16 CONTRIBUTED EQUITY
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Balance on 1 January, comprising
Ordinary shares - fully paid
Treasury shares - net of tax
Movements in ordinary share capital
2021 Interim Dividend - DRP
2020 Final Dividend - DRP
2019 Final Dividend - DRP
Redemption of capital - Deterra Demerger
-
Movements in treasury shares, net of tax
Employee share issues
Treasury share purchases
-
2021
Shares
2020
Shares
2021
$m
2020
$m
422,769,681
(199,929)
422,569,752
422,584,778
(470,456)
422,114,322
1,151.7
(1.2)
1,150.5
1,160.4
(2.8)
1,157.6
351,254
81,407
-
-
-
-
-
184,903
-
-
572,970
(1,584,193)
-
270,527
-
-
3.3
0.5
-
-
-
3.0
(9.0)
-
-
-
1.2
(10.0)
-
1.7
-
-
Balance on 31 December, comprising
Ordinary shares - fully paid
Treasury shares - net of tax
421,991,190
422,569,752
423,202,342
(1,211,152)
422,769,681
(199,929)
1,148.3
1,155.5
(7.2)
1,150.5
1,151.7
(1.2)
(a) Ordinary share capital
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held. On a show of hands, every holder of ordinary
shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll each share is entitled to
one vote. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
The Group issues ordinary shares to shareholders who elect to receive shares instead of cash dividends as part
of the Dividend Reinvestment Plan (DRP), the terms of which are detailed in the ASX announcement dated 27
February 2018. During the year, the Group issued the following shares under the DRP:
space
2020 final
2021 interim
(b) Treasury shares
Date issued
Price per share
Number of ordinary
shares issued
8 April 2021
6 October 2021
6.77
9.66
81,407
351,254
Treasury shares are shares in Iluka Resources Limited acquired on market and held for the purpose of issuing
shares under the Directors, Executives and Employees Share Acquisition Plan and the Employee Share Plan.
117
Iluka Resources Limited, Annual Report 2021
117
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
17 RESERVES AND RETAINED EARNINGS
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Notes
17(a)
17(b)
17(c)
17(d)
17(e)
Asset revaluation reserve
Balance at 1 January
Transfer to retained earnings on disposal
Balance at 31 December
blank
Hedge reserve
Balance at 1 January
Changes in the fair value of hedging instruments recognised in equity
Reclassified to profit or loss
Deferred tax
Balance 31 December
blank
Share-based payments reserve
Balance at 1 January
Share-based payments, net of tax
Transfer of shares to employees, net of tax
Balance at 31 December
blank
Foreign currency translation
Balance at 1 January
Currency translation of US operation
Currency translation of SRL
Translation differences on other foreign operations
Balance at 31 December
blank
Other reserves
Balance at 1 January
(Loss)/gain on part disposal of investment in subsidiary
Balance at 31 December
blank
Total reserves
blank
Retained earnings
Balance at 1 January
Net profit/(loss) for the period
Dividends paid
Transfer from asset revaluation reserve
Actuarial gains (losses) on retirement benefit obligation, net of tax
Balance at 31 December
2021
$m
10.8
(0.1)
10.7
0.9
(5.0)
2.4
0.7
(1.0)
2.2
8.1
(3.0)
7.3
45.3
(9.2)
(1.8)
1.9
36.2
(22.1)
-
(22.1)
31.1
104.3
364.9
(59.2)
0.1
3.8
413.9
2020
$m
11.3
(0.5)
10.8
(4.8)
0.7
7.8
(2.8)
0.9
0.2
3.7
(1.7)
2.2
39.1
14.9
(0.2)
(8.5)
45.3
(21.8)
(0.3)
(22.1)
37.1
(472.0)
2,411.9
(1,831.9)
0.5
(4.2)
104.3
118
118
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
(a) Asset revaluation reserve
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
The asset revaluation reserve records revaluations of non-current assets prior to the adoption of AIFRS.
Transfers are made to retained earnings on disposal of previously revalued assets.
(b) Hedge reserve
Iluka uses foreign currency collars as part of its foreign currency risk management strategy associated with its
US dollar denominated sales, as described in note 21. The foreign currency collars are designated to cash flow
hedge relationships. To the extent these hedges are effective, the change in fair value of the hedging instrument
is recognised in the cash flow hedge reserve.
(c) Share-based payments reserve
The employee share-based payments reserve is used to recognise the fair value of equity instruments granted
but not yet issued to employees under the Group's various equity-based incentive schemes. Shares issued to
employees are acquired on-market prior to the issue. Shares not yet issued to employees are shown as treasury
shares. When shares are issued to employees the cost of the on-market acquisition, net of tax, is transferred
from treasury shares (refer note 16) to the share-based payment reserve.
(d) Foreign currency translation reserve
Exchange differences arising on translation of the net investment in foreign operations, including US dollar
denominated debt used as a hedge of the net investment, are taken into the foreign currency translation reserve
net of applicable income tax, as described in note 2(b). Both US and Sierra Rutile operations had net liabilities at
31 December 2021 and 31 December 2020 and were not designated as a net investment hedge against USD
dollar denominated debt. The reserve is recognised in profit or loss when the net investment is disposed of.
(e) Other reserves
The impact on equity of transactions related to changes in the structure of the Group are accumulated in other
reserves. No such changes occurred in the current reporting period (2020: the Group reduced its shareholding in
Sierra Rutile from 96.43% to 90%, and recognised a loss on partial disposal of its investment in Sierra Rutile of
$0.3 million).
18 DIVIDENDS
Final dividend
for 2019 of 8 cents per share, fully franked
for 2020 of 2 cents per share, fully franked
-
Interim dividend
for 2021 of 12 cents per share, fully franked
-
Distributions
Demerger dividend
-
Total dividends
2021
$m
-
8.6
-
50.6
-
-
-
59.2
2020
$m
33.8
-
-
-
-
1,798.1
-
1,831.9
119
Iluka Resources Limited, Annual Report 2021
119
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Of the total $50.6 million interim dividend declared for 2021 and the total $8.6 million final dividend declared for
2020, shareholders respectively took up $3.3 million and $0.5 million as ordinary shares as part of the Dividend
Reinvestment Plan. Refer to note 16(a).
Since balance date the directors have determined a final dividend for 2021 of 12 cents per share, fully franked.
The dividend is payable on 7 April 2022 for shareholders on the register as at 10 March 2022. The aggregate
amount of the proposed dividend is $50.6 million, which has not been included in provisions at balance sheet
date as it was not declared on or before the end of the financial year.
Franking credits
The balance of franking credits available as at 31 December 2021 is $406.6 million (2020: $281.0 million). This
balance is based on a tax rate of 30% (2020: 30%).
19 EARNINGS PER SHARE
Basic earnings per share
From continuing operations
From discontinued operations
Total basic earnings per share
Diluted earnings per share
From continuing operations
From discontinued operations
Total diluted earnings per share
2021
Cents
86.7
-
86.7
2020
Cents
24.5
545.9
570.4
86.0
-
86.0
24.4
543.6
568.0
Total earnings per share (EPS) is the amount of post-tax earnings attributable to each share. Total basic and
diluted EPS comprises EPS from continuing operations and discontinued operations. Discontinued operations
represent the earnings associated with the demerger of Deterra in the prior reporting period.
Total basic EPS is calculated on the profit for the period of $365.9 million (2020: profit of $2,410.0 million)
divided by the weighted average number of shares on issue during the year, excluding treasury shares, being
422,267,055 shares (2020: 422,478,404 shares).
Total diluted EPS takes into account the dilutive effect of all outstanding share rights vesting as ordinary shares.
120
120
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
RISK
20 FINANCIAL RISK MANAGEMENT
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
The Group's activities expose it to a variety of financial risks: market risk (including currency risk and interest rate
risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability
of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.
Financial risk management is managed by a central treasury department under policies approved by the Board.
(a) Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect
the Group’s income or value of its holdings of financial instruments.
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising predominantly from the US
dollar, which is the currency the Group’s sales are generally denominated in.
Foreign exchange risk is also managed through entering into forward foreign exchange contracts and collar
contracts detailed in note 21.
The treasury function of the Group manages foreign currency risk centrally. The Group hedges foreign exchange
exposures for firm commitments relating to a portion of sales, where the hedging instrument must be in the
same currency as the hedged item.
The Group's exposure to USD foreign currency risk (by entities which have an Australian dollar functional
currency) at the end of the reporting period, expressed in Australian dollars, was as follows:
Cash and cash equivalents
Receivables
Payables
Interest-bearing liabilities
Derivative financial instruments
2021
$m
6.3
189.3
(51.4)
-
(11.6)
132.6
2020
$m
26.8
33.0
(25.4)
(13.0)
(4.7)
16.7
The Group's balance sheet exposure to other foreign currency risk is not significant.
The objective of Iluka’s policy on foreign exchange hedging is to protect the Group from adverse currency
fluctuations.
121
Iluka Resources Limited, Annual Report 2021
121
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
(ii) Group sensitivity
The average US dollar exchange rate during the year was 0.7515 (2020: 0.6907). The US dollar spot rate at 31
December 2021 was 0.7248 (31 December 2020: 0.7690). Based on the Group's net financial assets at 31
December 2021, the following table demonstrates the estimated sensitivity to a -/+ 10% movement in the US
dollar spot exchange rate, with all other variables held constant, on the Group's post-tax profit for the year and
equity:
-10%
Strengthen
Profit (loss)
$m
10.4
5.2
Equity
$m
4.9
7.7
+10%
Weaken
Profit (loss)
$m
(8.4)
7.0
Equity
$m
(3.3)
(6.5)
31 December 2021
31 December 2020
(iii) Interest rate risk
Interest rate risk arises from the Group’s borrowings and cash deposits. During 2021 and 2020, the Group's
borrowings at variable rates were denominated in Australian dollars and US dollars. At 31 December 2021, if
variable interest rates for the full year were -/+ 1% from the year-end rate with all other variables held constant,
pre-tax profit for the year would have moved as per the table below.
31 December 2021
31 December 2020
-1%
$m
0.3
0.4
+1%
$m
(0.3)
(0.4)
The sensitivity is calculated using the average month end debt position for the year ended 31 December 2021.
The interest charges in note 15(d) of $0.8 million (2020: $1.9 million) reflect interest-bearing liabilities in 2021
that range between $nil and $60.5 million (2020: $1.3 million and $159.7 million).
(b) Credit risk
Credit risk arises from cash and cash equivalents and hedging instruments held with financial institutions, as well
as credit exposure to customers.
The Group's policy is to ensure that cash deposits are held by financial institutions with a minimum A-/A3 credit
rating. Exposure limits are approved by the Board based on credit ratings from external ratings agencies.
Derivative counterparties and cash transactions are limited to high credit quality financial
policies limit the amount of credit exposure to any one financial institution.
institutions and
The Group manages customer credit risk subject to established policies, procedures and controls. Credit limits
are established for all customers. The Group trades primarily with recognised, creditworthy third parties.
including an
Customers who wish to trade on credit terms are subject to credit verification procedures,
assessment of their independent credit rating (if available), financial position, past experience, and industry
reputation.
Credit risk management practices include reviews of trade receivables aging by days past due, the timely
follow-up of past due amounts, and the use of letters of credit.
The expected credit loss on trade receivables is not significant.
122
122
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
(c) Liquidity risk
Liquidity risk is the risk the Group will not be able to meet its financial obligations as they fall due. Liquidity risk
management involves maintaining sufficient cash on hand or undrawn credit facilities to meet the operating
requirements of the business. This is managed through committed undrawn facilities under the MOFA (refer note
15(b)(i)) of $512.0 million at balance date as well as cash and cash equivalents of $294.8 million and prudent
cash flow management.
(d) Maturities of financial liabilities
The tables below analyse the Group's interest-bearing liabilities into maturity groupings based on the remaining
period at the reporting date to the contractual maturity date. For the MOFA, the contractual maturity dates and
contractual cash flows are until the next contractual re-pricing date in 2024. The amounts disclosed in the table
are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the
impact of discounting is not significant. All other non-derivative financial liabilities are due within 12 months.
Derivative cash flows include the net amounts expected to be paid for foreign exchange forward contracts and
net amounts expected to be received for foreign exchange collar contracts.
At 31 December 2021
Non-derivatives
Payables
Lease liabilities
Interest-bearing variable rate
Total non-derivatives
Derivatives
Foreign exchange collar contracts
Put option
Total derivatives
Weighted
average
rate
Less than
1 year
$m
Between
1 and 2
years
$m
Between 2
and 5
years
$m
Total
contractual
cash flows
$m
Carrying
amount
liabilities
$m
Over 5
years
$m
%
3.1
1.5
174.8
8.7
-
183.5
0.5
11.0
11.5
-
8.1
-
8.1
-
-
-
-
14.1
-
14.1
-
-
-
-
5.0
-
5.0
-
-
-
174.8
40.8
-
215.6
174.8
35.9
-
210.7
0.5
11.0
11.5
0.5
11.0
11.5
123
Iluka Resources Limited, Annual Report 2021
123
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Weighted
average
rate
Less than
1 year
Between
1 and 2
years
Between
2 and 5
years
Total
contractual
cash flows
Carrying
amount
liabilities
Over 5
years
$m
$m
$m
$m
$m
At 31 December 2020
Non-derivatives
Payables
Lease liabilities
Interest-bearing variable rate
Total non-derivatives
4.9
1.5
129.4
7.5
-
136.9
-
3.9
-
3.9
-
7.8
38.0
45.8
Derivatives
Foreign exchange collar contracts
Put option
Total derivatives
(1.9)
-
(1.9)
(0.6)
7.7
7.1
-
-
-
-
9.3
-
9.3
-
-
-
129.4
28.5
38.0
195.9
129.4
23.3
38.0
190.7
(2.5)
7.7
5.2
(2.5)
7.2
4.7
Refer to note 21 for detail on derivative instruments.
21 HEDGING
Current (liabilities)/assets
Foreign exchange collar hedges
Non-current assets
Foreign exchange collar hedges
2021
$m
(0.5)
-
2020
$m
1.9
0.6
The Group is exposed to risk from movements in foreign exchange in relation to its forecast US dollar
denominated sales and as part of the risk management strategy has entered into foreign exchange forward
contracts and foreign exchange collar contracts.
(a) Recognition
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently re-measured to their fair value at the end of each reporting period. The accounting for subsequent
changes in fair value depends on whether the derivative is designated as a hedging instrument and, if so, the
nature of the item being hedged and the type of hedge relationship designated.
(b) Fair value of derivatives
Derivative financial instruments are the only assets and liabilities measured and recognised at fair value at 31
December 2021 and 31 December 2020, comprising the above hedging instruments and the put option liability
detailed in note 22(b)(ii). The fair value of hedging instruments is determined using valuation techniques with
inputs that are observable market data (a level 2 measurement). The valuation of the options making up the
collars is determined using forward foreign exchange rates, volatilities and interest rates at the balance date. The
only unobservable input used in the calculations is the credit default rate, movements in which would not have a
material effect on the valuation.
124
124
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
(c) Hedge accounting
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
At the start of a hedge relationship, the Group formally designates and documents the hedge relationship,
including the risk management strategy for undertaking the hedge. This includes identification of the hedging
instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the
hedging instrument’s effectiveness. Hedge accounting is only applied where effective tests are met on a
prospective basis.
Iluka will discontinue hedge accounting prospectively only when the hedging relationship, or part of the hedging
relationship, no longer qualifies for hedge accounting. This includes where there has been a change to the risk
management objective and strategy for undertaking the hedge and instances when the hedging instrument
expires or is sold, terminated or exercised. The replacement or rollover of a hedging instrument into another
hedging instrument is not treated as an expiration or termination if such a replacement or rollover is consistent
with our documented risk management objective.
The foreign exchange collars Iluka holds are classified as cash flow hedges. Hedges are classified as cash flow
hedges when they hedge a particular risk associated with the cash flows of recognised assets and liabilities and
highly probable forecast transactions.
Cash flow hedges
For cash flow hedges, the portion of the gain or loss on the hedging instrument that is effective is recognised
directly in equity, while the ineffective portion is recognised in profit or loss. The ineffective portion was
immaterial in the current and prior periods. The maturity profile of these hedges is shown in note 20(d). The
recognition of the future gain or loss is expected to be consistent with this timing.
Foreign exchange collar contracts in relation to expected USD revenue, predominantly from contracted sales to
31 December 2022, remain open at the reporting date. The foreign exchange collar hedges cover US$102.3
million of expected USD revenue to 31 December 2022 and comprise US$102.3 million worth of purchased AUD
call options with a weighted average strike price of 80.0 cents and US$102.3 million of AUD put options with a
weighted average strike price of 65.9 cents.
The period above corresponds with the long-term sales contracts entered into in 2017 including those in support
of the development of the Cataby project. However, the hedged USD revenues do not represent the full value of
expected sales under these contracts over this period.
US$105.5 million in foreign exchange collar contracts consisting of US$105.5 million of bought AUD call options
with weighted average strike prices of 78.6 cents and US$105.5 million of sold AUD put options with weighted
average strike prices of 70.4 cents matured during the year. Additionally, US$24.6 million of bought AUD call
options with a weighted average strike price of 80.0 cents and US$69.7 million of foreign exchange forward
contracts with a weighted average rate of 77.2 cents matured during the year.
Amounts recognised in equity are transferred to the income statement when the hedged sale occurs or when the
hedging instrument is exercised.
If the forecast transaction is no longer expected to occur, amounts previously recognised in equity are
transferred to the income statement. If the hedging instrument expires or is sold, terminated or exercised without
replacement or roll over, or if its designation as a hedge is revoked, amounts previously recognised in equity
remain in equity until the forecast transaction occurs.
Net investment hedge
To the extent possible, the Group designates US denominated debt as a hedge against the Group's net
investment in Sierra Leone, which has a US dollar functional currency. Sierra Rutile operations had net liabilities
at 31 December 2021 and 2020, and were therefore not designated as a net investment hedge against USD dollar
denominated debt. No amounts in respect of the Group's net investment hedge were recognised in the foreign
currency translation reserve during the current or prior reporting period.
125
Iluka Resources Limited, Annual Report 2021
125
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
GROUP STRUCTURE
22 CONTROLLED ENTITIES AND DEED OF CROSS GUARANTEE
(a) Subsidiaries
The consolidated financial statements incorporate the following subsidiaries:
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Place of business/
country of
incorporation
Note
Ownership interest
held by the group
2021
%
2020
%
*
*
*
*
*
*
*
*
*
*
*
^
*
*
*
*
*
*
*
*
*
*
*
^
^
*
*
*
*
*
*
*
*
*
*
*
*
*
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Brazil
British Virgin Islands
-
96
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
90
-
96
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
90
Iluka Resources Limited (Parent Company)
Ashton Coal Interests Pty Limited
Associated Minerals Consolidated Ltd
Basin Minerals Holdings Pty Ltd
Basin Minerals Limited
Basin Properties Pty Ltd
Glendell Coal Ltd
Gold Fields Asia Ltd
Ilmenite Proprietary Limited
Iluka (Eucla Basin) Pty Ltd
Iluka Consolidated Pty Limited
Iluka Corporation Limited
Iluka Eneabba Pty Ltd
Iluka Exploration Pty Limited
Iluka Finance Limited
Iluka International (Brazil) Pty Ltd
Iluka International (China) Pty Ltd
Iluka International (ERO) Pty Ltd
Iluka International (Lanka) Pty Ltd
Iluka International (Netherlands) Pty Ltd
Iluka International (South Africa) Pty Ltd
Iluka International (West Africa) Pty Ltd
Iluka International Limited
Iluka Midwest Limited
Iluka Rare Earths Pty Ltd
Iluka RE Investments Pty Ltd
Iluka Royalties (Australia) Pty Ltd
Iluka Share Plan Holdings Pty Ltd
Lion Properties Pty Limited
NGG Holdings Ltd
Renison Limited
Southwest Properties Pty Ltd
Swansands Pty Ltd
The Mount Lyell Mining and Railway Company Limited
The Nardell Colliery Pty Ltd
Western Mineral Sands Proprietary Limited
Western Titanium Limited
Westlime (WA) Limited
Yoganup Pty Ltd
A.C.N. 637 824 027 Limited
Iluka Brasil Mineração Ltda
Iluka Investments (BVI) Limited
126
126
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Sierra Rutile Holdings Limited
SRL Acquisition No. 3 Limited
Iluka Exploration (Canada) Limited
Iluka Trading (Shanghai) Co., Ltd
Iluka Exploration (Kazakhstan) LLP
Sierra Rutile Limited
Iluka International (Eurasia) Pte. Ltd
Iluka South Africa (Pty) Limited
Iluka Lanka P.Q. (Private) Limited
Iluka Lanka Resources (Private) Limited
ERO (Tanzania) Limited
Iluka International Coöperatief U.A.
Iluka Investments 1 B.V.
Iluka Trading (Europe) B.V.
Iluka (UK) Ltd
Iluka International (UK) Limited
Iluka Technology (UK) Ltd
Sierra Rutile (UK) Limited
Associated Minerals Consolidated Investments
Iluka (USA) Investments Inc.
Iluka Atlantic LLC
Iluka Resources (NC) LLC
Iluka Resources (TN) LLC
Iluka Resources Inc.
IR RE Holdings LLC
Place of business/
country of
incorporation
Note
Ownership interest
held by the group
2021
%
2020
%
British Virgin Islands
British Virgin Islands
Canada
China
Kazakhstan
Sierra Leone
Singapore
South Africa
Sri Lanka
Sri Lanka
Tanzania
The Netherlands
The Netherlands
The Netherlands
United Kingdom
United Kingdom
United Kingdom
United Kingdom
USA
USA
USA
USA
USA
USA
USA
90
90
100
100
-
90
100
100
100
100
100
100
100
100
100
100
100
90
100
100
100
100
100
100
100
90
90
100
100
100
90
100
100
100
100
100
100
100
100
100
100
100
90
100
100
100
100
100
100
100
* The above companies are parties to a Deed of Cross Guarantee (the Deed) under which each company
guarantees the debts of the others.
By entering into the Deed, the wholly-owned entities represent a closed group and have been relieved from the
requirements to prepare a Financial Report and Directors' Report under ASIC Corporations (Wholly-owned
Companies) Instrument 2016/785. The closed group is also the extended closed group.
^ In October 2021, Iluka incorporated three Australian wholly-owned entities in relation to its rare earths project.
These companies are not parties to the Deed.
(b) Non-controlling interests (NCI)
(i)
International Finance Corporation (IFC) interest in Sierra Rutile Limited (SRL)
The Group entered into a strategic partnership with the IFC, a member of the World Bank Group, in 2019 in
relation to the Sierra Rutile operation. Under the partnership, the IFC acquired an interest in SRL from the Group,
and the Group entered into a put option arrangement with the IFC (refer to (ii), below).
The IFC holds 10% of Iluka Investments (BVI) Limited at 31 December 2021, which was acquired in two tranches.
No changes to the IFC's holding have occurred in the current reporting period.
(ii) Transactions with NCI - put option held by the IFC
The Group also entered into a commercial put option (i.e. at fair market value) with the IFC, exercisable only after
7 years from June 2019 (or 3 years if the Sembehun development was not approved).
127
Iluka Resources Limited, Annual Report 2021
127
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
The put option was revalued to $11.0 million (2020: $7.2 million), being the equivalent of US$8.0 million (2020:
$5.5 million) during the current reporting period. The resultant $3.4 million remeasurement loss is included in
expenses in profit or loss (2020: $19.4 million remeasurement gain included in other income). In addition, an
unrealised foreign exchange gain of $0.4 million has been recognised in profit or loss in relation to the put option
(2020: $1.8 million foreign exchange gain).
(c) Condensed financial statements of the extended closed group
Condensed statement of profit or loss and other comprehensive income
2021
$m
2020
$m
1,313.1
(863.1)
(13.5)
18.1
(134.8)
319.8
-
319.8
1.9
321.7
1,036.7
319.8
(59.2)
1,297.3
2021
$m
243.9
279.3
432.0
-
955.2
756.8
(509.3)
(13.7)
0.1
(68.7)
165.2
2,306.5
2,471.7
9.5
2,481.2
397.0
2,471.7
(1,832.0)
1,036.7
2020
$m
52.2
90.4
452.7
1.9
597.2
CONTINUING OPERATIONS
Revenue from ordinary activities
Expenses from ordinary activities
Finance costs
Equity accounted share of profit - Deterra
Income tax expense
Profit for the period
DISCONTINUED OPERATIONS
Profit after tax from discontinued operations
Net profit after tax for the period
Other comprehensive income
Changes in the fair value of cash flow hedges
Total comprehensive income for the period
Summary of movements in consolidated retained earnings
Retained earnings at the beginning of the financial year
Total comprehensive income for the year
Dividends provided for or paid
Retained earnings at the end of the financial year
Condensed balance sheet
Current assets
Cash and cash equivalents
Receivables
Inventories
Derivative financial instruments
Total current assets
128
128
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
Condensed balance sheet
Non-current assets
Property, plant and equipment
Deferred tax assets
Inventories
Derivative financial instruments
Other financial assets - investments in non-closed group entities
Investments accounted for using the equity method
Right of use assets
Total non-current assets
Total assets
Current liabilities
Payables
Derivative financial instruments
Current tax payable
Provisions
Lease liabilities
Total current liabilities
Non-current liabilities
Interest-bearing liabilities
Provisions
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
2021
$m
2020
$m
947.7
36.5
65.0
-
850.4
455.5
28.6
2,383.7
956.2
28.0
112.0
0.6
902.1
452.1
15.1
2,466.1
3,338.9
3,063.3
220.4
0.5
27.6
50.0
7.5
306.0
-
549.2
28.3
577.5
222.8
-
27.7
53.9
7.5
311.9
36.9
504.2
15.7
556.8
883.5
868.7
2,455.4
2,194.6
1,148.3
9.8
1,297.3
2,455.4
1,150.5
7.5
1,036.6
2,194.6
129
Iluka Resources Limited, Annual Report 2021
129
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
23 EQUITY ACCOUNTED ASSOCIATE - DETERRA ROYALTIES LIMITED (DETERRA)
Deterra Royalties Limited was formed on 2 November 2020 when it was demerged from the Group. Deterra is the
largest resource-focused royalty company listed on the ASX. Since demerger, the Group has held a 20% equity
ownership interest in Deterra. Refer to note 23 to the 2020 Annual Report for further details of demerger
transactions. The Group accounts for its investment in Deterra as an equity accounted associate.
(a) Investment carrying amount
Movements in the carrying value of the Group's investment in Deterra are as follows:
Balance at the beginning of the year
Initial recognition on demerger
Gross equity accounted profit
Depreciation
Dividends received
Balance at the end of the year
2021
$'m
452.1
-
24.6
(6.2)
(14.8)
455.7
2020
$'m
-
452.0
1.4
(1.3)
-
452.1
The Group recognises its share of the profits of Deterra, being 20% of its net profit after tax, as income in each
reporting period. The Group adjusts its share of the profit of Deterra by depreciating the value attributed to the
Mining Area C (MAC) Royalty right (materially all of its initial value) over a period of 50 years on a straight-line
basis, which aligns with the estimated life of mine of the mining operations in the MAC Royalty area.
The Group initially recognised its investment at its cost to the Group in the prior reporting period, which was
equal to the carrying value of the net assets of Deterra immediately prior to demerger. The retained interest was
immediately remeasured to its fair value on the demerger date. This fair value was allocated to the assets
acquired on a notional basis, with the value uplift attributed to MAC Royalty rights held by Deterra.
(b) Summarised financial information of Deterra
The following is a summary of the financial
amended to include adjustments made by the Group in applying the equity method:
information presented in the financial statements of Deterra,
Summarised balance sheet of Deterra Royalties Limited at 31 December
2021
$'000
2020
$'000
29,431
33,229
-
1,445
64,105
8,753
33
261
33
9,080
188
25,092
363
1,114
26,757
10,029
29
332
-
10,390
Current assets
Cash and cash equivalents
Trade and other receivables
Income tax receivable
Prepayments
Total current assets
Non-current assets
Royalty and other intangible assets
Property, plant and equipment
Right of use assets
Prepayments
Total non-current assets
130
130
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
(b) Summarised financial information of Deterra (continued)
Current liabilities
Trade and other payables
Provisions
Lease liability
Income tax payable
Total current liabilities
Non-current liabilities
Lease liability
Borrowings
Deferred tax
Total non-current liabilities
Net assets
The Group's share of Deterra's net assets is reconciled to its carrying value as follows:
Opening net assets
Profit for the period
Movements in other reserves
Dividends
Dividend paid prior to demerger
Closing net assets
Group's share percentage
Group's share percentage
Group's share of net assets
Iluka's gain on demerger, net of accumulated depreciation
Carrying value of investment in Deterra
2021
$'000
2020
$'000
590
69
68
104
831
211
-
9,039
9,250
382
11
65
-
458
279
16,386
6,961
23,626
63,104
13,063
2021
$'000
13,063
122,621
1,251
(73,831)
-
63,104
20%
0.2
12,621
443,106
455,727
2020
$'000
-
33,341
115
-
(20,393)
13,063
20%
0.2
2,613
449,487
452,100
Deterra is a listed ASX royalty company. The market value of Iluka's interest at 31 December 2021 was $455.5
million.
131
Iluka Resources Limited, Annual Report 2021
131
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
OTHER NOTES
24 CONTINGENT LIABILITIES
(a) Bank guarantees
The Group has a number of bank guarantees in favour of various government authorities and service providers to
meet its obligations under exploration and mining tenements. At 31 December 2021, the total value of
performance commitments and guarantees was $153.4 million (2020: $120.5 million).
(b) Native title
There is some risk that native title, as established by the High Court of Australia's decision in the Mabo case,
exists over some of the land over which the Group holds tenements or over land required for access purposes. It
is impossible at this stage to quantify the impact, if any, which these developments may have on the operations
of the Group.
(c) Sierra Leone environmental class action
On 22 January 2019, SRL was served with a writ and statement of claim in respect of an action filed in the High
Court of Sierra Leone Commercial And Admiralty Division against both SRL and The Environmental Protection
Agency.
The proceedings have been brought by a group of landowner representatives (Representatives) who allege that
they suffered loss as a result of SRL’s mining operations. The claims primarily relate to environmental matters
that arose prior to the Group acquiring its interest in SRL. The Representatives allege, in part, that SRL engaged in
improper mining practices resulting in environmental degradation and contamination, did not meet certain
rehabilitation obligations and violated local mining laws. SRL denies liability in respect of the allegations and
intends to defend the claims. SRL filed its defence in March 2019 and also applied to the Court for an order
requiring the Representatives to provide further detail on their claims.
As at 31 December 2021, the status of the proceedings has still not reached a stage where SRL is able to reliably
estimate the quantum of liability, if any, that SRL may incur in respect of the class action.
(d) Other claims
In the course of its normal business, the Group occasionally receives claims arising from its operating or historic
activities. In the opinion of the directors, all such matters are covered by insurance or, if not covered, are without
merit or are of such a kind or involve such amounts that would not have a material adverse effect on the
operating results or financial position of the Group if settled unfavourably.
25 EVENTS OCCURRING AFTER THE REPORTING PERIOD
(a) Shareholder class action - Australia
On 24 March 2014, Iluka became aware that a litigation funder proposed to fund claims that current or former
shareholders may have against Iluka in respect of alleged breaches of Iluka’s continuous disclosure obligations
and misleading or deceptive conduct in 2012.
On 23 April 2018, Iluka was served with an originating application and statement of claim in respect of a
shareholder class action filed in the Federal Court of Australia. The trial of the proceedings concluded on 12 May
2021.
On 7 February 2022, the Federal Court of Australia handed down its decision, dismissing all of the applicant’s and
group members’ claims against Iluka.
(b) Withdrawal of notice to suspend operations - Sierra Rutile
On 14 January 2022, Sierra Rutile withdrew its notice to suspend operations following the ratification by the
Parliament of Sierra Leone of adjustments to the applicable fiscal regime for Area 1 in December.
132
132
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
(c) Warehouse compound fire - Sierra Rutile
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
On 19 February 2022, a fire in a warehouse compound at SRL damaged sheds containing stored equipment parts
and spares. The fire damage did not extend to operational property, plant, and equipment or product inventory.
The group is still assessing the potential impact and therefore no estimates of its financial effect can be made as
at the date of this report.
26 COMMITMENTS
(a) Exploration and mining lease commitments
Commitments in relation to leases contracted for at reporting date but not
recognised as liabilities payable:
Within one year
Later than one year but not later than five years
Later than five years
2021
$m
2020
$m
11.0
25.9
44.9
81.8
14.8
32.3
43.6
90.7
These costs are discretionary. If the expenditure commitments are not met then the associated exploration and
mining leases may be relinquished.
(b) Capital commitments
Capital expenditure contracted for and payable, but not recognised as liabilities is $21.4 million (2020: $35.1
million). All of the commitments relate to the purchase of property, plant and equipment. The total amount is
expected to be paid within one year of the reporting date.
27 REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services provided by PricewaterhouseCoopers
Australia (PwC) as the auditor of the parent entity, Iluka Resources Limited, by PwC’s related network firms and
by non-related audit firms:
(a) Auditors of the Group - PwC and related network firms
Audit and review of financial reports
Group
Controlled entities
Other assurance services
Investigating Accountants report for Deterra Demerger
Other assurance services
2021
$000
2020
$000
587
114
701
-
67
67
624
156
780
266
63
329
133
Iluka Resources Limited, Annual Report 2021
133
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
(a) Auditors of the Group - PwC and related network firms
Other services
Tax compliance and advisory services
Other advisory services
Total services provided by PwC
(b) Other auditors and their related network firms
Audit and review of financial statements
Other compliance and advisory services
2021
$000
2020
$000
10
30
40
34
10
44
808
1,153
377
5
382
101
4
105
28 SHARE-BASED PAYMENTS
Share-based compensation benefits are provided to employees via the Equity Incentive Plan (specifically, the
Executive Incentive Plan, Long Term Incentive Plan and Short Term Incentive Plan). Information relating to this
scheme is set out in the Remuneration Report.
The fair value of shares granted is determined based on market prices at grant date, taking into account the
terms and conditions upon which those shares were granted. The fair value is recognised as an expense through
profit or loss on a straight-line basis over the vesting period for each respective plan.
The fair value of share rights is independently determined using a Monte Carlo simulation that takes into account
the exercise price, the term of the share right, the impact of dilution, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the risk free interest rate of the term of the
share right. The fair value of the Long Term Incentive Plan (LTIP - TSR tranche) and Executive Incentive Plan also
take into account the Company's predicted share prices against the comparator group performance at vesting
date.
A credit to the share-based payments expense arises where unvested entitlements lapse on resignation or the
non-fulfilment of the vesting conditions that do not relate to market performance. Payroll tax payable on the grant
of restricted shares or share rights is recognised as a component of the share-based payments expense when
paid.
134
134
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
The share-based payment expense recognised in profit or loss of $11.1 million (2020: $4.1 million) results from
several schemes summarised below.
Schemes
STIP (i)
2021
2020
2019
2018
2017
LTIP - TSR (ii)
2017
2016 MD Grant
2016
LTIP - ROE (ii)
2017
2016 MD Grant
2016
EIP (iii)
Restricted Share Plan (iv)
Grant date
Vesting date
Fair
value
$
Shares /
rights at
31 Dec 21
Expense
2021
$m
Shares /
rights at
31 Dec 20
Expense
2020
$m
Mar-22
Mar-21
Mar-20
Mar-19
Mar-18
May-17
Oct-16
May-16
May-17
Oct-16
May-16
Mar23/24
Mar-22/23
Mar-21/22/23
Mar-20/21
Mar-19/20
Mar-21
Mar-21
Mar-20
Mar-21
Mar-21
Mar-20
Mar-18/19/20/21/22 Mar-23/24/25/26
10.1
6.62
9.30
7.62
10.55
5.66
3.71
4.27
7.44
5.42
6.01
7.62
-
-
-
-
-
2.0
0.7
0.4
0.1
-
286,546
0.1
74,314
90,493
-
-
-
3,212,070
-
-
-
-
-
5.1
2.7
11.1
-
-
-
-
-
610,323
126,688
104,037
610,312
126,687
104,037
1,528,301
-
-
0.7
1.0
0.6
0.1
0.3
0.1
-
(2.0)
(0.5)
-
3.4
0.5
4.1
(i) Short Term Incentive Plan (STIP)
The fair value of the STIP is determined as the volume weighted average price of ordinary shares over the five
trading days following the release of the Company’s annual results.
(ii) Long Term Incentive Plan (LTIP)
The fair value at grant date for the LTIP took into account the exercise price of $nil, the share price at grant date,
the expected price volatility of the share price (based on historical volatility), the expected dividend yield and the
risk free rate of return. The fair value of the total shareholder return tranche also took into account the
Company’s predicted share prices against the comparator group performance at vesting date.
Prior year expenses related to rights that do not vest for the Return on Equity (ROE) tranche are credited to
share-based payments expense.
(iii) Executive Incentive Plan (EIP)
Equity awarded under the Executive Incentive Plan is granted on 1 March each year. The number of restricted
shares and performance rights to be awarded is determined based on a volume weighted average market price
of Iluka shares for the five days following the release of the full year results.
The fair value at grant date for the Executive Incentive Plan (EIP) with market vesting conditions takes into
account the exercise price of $nil (2020: nil), the share price at grant date of $7.45 for KMP other than T O’Leary
and $7.77 for T O’Leary (2020: $9.34), the expected share price volatility (based on historical volatility) of 38%
(2020: 33%), the expected dividend yield of 0% (2020: 0%) the risk free rate of return of 0.49% for KMP other than
T O’Leary and 0.60% for T O’Leary (2020: 1.7%), and vesting dates for a period of four years commencing one
year after the grant date. The fair value of the TSR tranche also takes into account the Company’s predicted
share prices against the comparator group performance at vesting date. The fair value at grant date for the
Executive Incentive Plan (EIP) with non-market vesting conditions is calculated as volume weighted average
market price of Iluka shares for the five days following the end of performance year.
(iv) Restricted share plan
No restricted shares were issued to eligible employees (2020: no restricted shares issued to eligible employees)
who participated in the plan.
135
Iluka Resources Limited, Annual Report 2021
135
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
29 POST-EMPLOYMENT BENEFIT OBLIGATIONS
(a) Superannuation plans
(i) USA
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
All employees of the United States (US) operations are entitled to benefits from the US operations' pension plans
on retirement, disability or death. The US operations have one defined benefit plan and one defined contribution
plan. The defined benefit plan provides a monthly benefit based on average salary and years of service. The
defined contribution plan receives an employee's elected contribution and an employer's match-up to a fixed
percentage. The entity's legal or constructive obligation is limited to these contributions.
(ii) SRL
SRL does not operate any retirement benefit plan for its employees. For employees of the Sierra Leone based
subsidiary, the Group makes a contribution of 10% of the employees' basic salary to the National Social Security
and Insurance Trust ("NASSIT") for payment of pension to staff on retirement. These employees also contribute
5% of their basic salary to NASSIT.
The Sierra Leone-based subsidiary also provides for end-of-term benefits based on the provisions contained in
the collective bargaining agreements negotiated with trade unions representing employees. The end-of-term
benefits include senior and management employees in addition to all other employees. The post-employment
benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation
in relation to this arrangement.
(b) Financial position
The net financial position of the Group’s defined benefit plans based on information supplied from the plans'
actuarial advisors per the table below.
United States
Sierra Leone
Total
Net plan position
Deficit
Deficit
2021
$m
(13.3)
(13.3)
(26.6)
2020
$m
(17.7)
(9.1)
(26.8)
A net deficit of $26.6 million (2020: deficit $26.8 million) is included in non-current provisions in note 8. The table
below provides a summary of the net financial position at 31 December for the past five years.
Defined benefit plan obligation
Plan assets
Deficit
2021
$m
(57.5)
30.9
(26.6)
2020
$m
(51.8)
25.0
(26.8)
2019
$m
(46.7)
24.3
(22.4)
2018
$m
(39.4)
21.5
(17.9)
2017
$m
(36.0)
21.2
(14.8)
(c) Defined benefits superannuation expense
In 2021, $4.5 million (2020: $2.3 million) was recognised in expenses for the year in respect of the defined benefit
plans.
Other disclosures in respect of retirement benefit obligations required by AASB 119 are not included in the
financial report as the directors do not consider them to be material to an understanding of the financial position
and performance of the Group.
136
136
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
30 RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM
OPERATING ACTIVITIES
Profit for the year
Depreciation and amortisation
Amortisation of right-of-use-assets
Net loss (gain) on disposal of property, plant and equipment
Doubtful debts/(reversed)
Net exchange differences and other
Rehabilitation and mine closure provision discount unwind
Rehabilitation discount rate change
Non-cash share-based payments expense
Amortisation of deferred borrowing costs
Equity accounted share of profit
Impairment - exploration asset
Inventory NRV write-down
Changes in rehabilitation provisions for closed sites
Demerger gain
Put option revaluation gain/(loss)
Change in operating assets and liabilities
(Increase)/decrease in receivables
Decrease/(increase) in inventories
(Decrease) in net current tax liability
(Increase) in net deferred tax
(Decrease) in payables
(Decrease)/increase in provisions
Net cash inflow from operating activities
Notes
9
10
8
8
28
15
23
7
14
8
22
2021
$m
365.9
165.4
6.2
(1.6)
(1.5)
(1.8)
8.9
-
11.1
0.7
(18.4)
6.3
11.4
(60.8)
-
3.9
(153.9)
49.3
(0.8)
(9.9)
(19.7)
(5.8)
354.9
2020
$m
2,410.0
176.2
8.8
(2.0)
(0.1)
5.5
14.4
12.2
4.1
0.6
(0.1)
12.4
13.0
(8.1)
(2,246.8)
(19.4)
93.4
(196.2)
(63.3)
(8.1)
(118.9)
24.1
111.7
137
Iluka Resources Limited, Annual Report 2021
137
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
31 KEY MANAGEMENT PERSONNEL
(a) Key Management Personnel
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
Key Management Personnel of the Group comprise directors of Iluka Resources Limited as well as other specific
employees of the Group who met the following criteria: "personnel who have authority and responsibility for
planning, directing and controlling the activities of the Group, either directly or indirectly."
(i) Key Management Personnel compensation
Detailed information about the remuneration received by each Key Management Person is provided in the
Remuneration Report on pages 67 to 85.
The below provides a summary:
-
Short-term benefits
Post-employment benefits
Termination benefits
Share-based payments
Total
2021
$000
5,092
189
-
2,538
7,819
2020
$000
4,962
199
49
590
5,800
(b) Transactions with Key Management Personnel
There were no transactions between the Group and Key Management Personnel that were outside of the nature
described below:
(i)
(ii)
(iii)
occurrence was within a normal employee, customer or supplier relationship on terms and conditions no
more favourable than those it is reasonable to expect the Group would have adopted if dealing at arms
length with an unrelated individual;
information about these transactions does not have the potential to adversely affect the decisions about
the allocation of scarce resources made by users of the financial report, or the discharge of
accountability by the Key Management Personnel; and
the transactions are trivial or domestic in nature.
138
138
Iluka Resources Limited, Annual Report 2021
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
32 PARENT ENTITY FINANCIAL INFORMATION
(a) Summary financial information for Iluka Resources Limited
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Contributed equity
Other reserves
Profit reserve¹
Accumulated loss
space
Profit/(loss) for the year
Other comprehensive income
Changes in the fair value of cash flow hedges, net of tax
Total comprehensive income
¹Profits have been appropriated to a profits reserve for future dividend payments.
2021
$m
2020
$m
461.4
1,495.0
1,956.4
-
814.0
814.0
197.5
2,078.0
2,275.5
69.6
620.7
690.3
1,142.4
1,585.2
1,155.5
23.4
626.9
(663.4)
1,142.4
1,151.5
15.3
626.9
(208.5)
1,585.2
(469.2)
2,244.9
2.4
(466.8)
(7.8)
2,237.1
(b) Contingent liabilities of the parent entity
The parent had contingent liabilities for performance commitments and guarantees of $12.2 million as at 31
December 2021 (2020: $12.4 million). In addition, the parent has a contingent liability related to the shareholder
class action, as detailed in note 24.
(c) Contractual commitments for the acquisition of property, plant or equipment
As at 31 December 2021, the parent entity had contractual commitments for the acquisition of property, plant or
equipment totalling $3.1 million (2020: $2.3 million).
139
Iluka Resources Limited, Annual Report 2021
139
NOTES TO FINANCIAL STATEMENTS
For the year ended 31 December 2021
(d) Parent entity financial information
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
The financial information for the parent entity has been prepared on the same basis as the consolidated financial
statements, except as set out below.
Investments in subsidiaries
(i)
Investments in subsidiaries are accounted for at cost.
(ii) Tax consolidation legislation
Iluka Resources Limited and its wholly-owned Australian controlled entities have implemented the tax
consolidation legislation as of 1 January 2004. On adoption of the tax consolidation legislation, the entities in the
tax consolidation group entered into a tax sharing agreement which limits the joint and several liability of the
wholly-owned entities in the case of a default by the head entity, Iluka Resources Limited.
33 RELATED PARTY TRANSACTIONS
The only related party transactions are with Directors and Key Management Personnel (refer note 31). Details of
material controlled entities are set out in note 22, and details of the Group's equity accounted associate are set
out in note 23. The ultimate Australian controlling entity and the ultimate parent entity is Iluka Resources Limited.
34 NEW AND AMENDED STANDARDS
New standards and amendments adopted
Iluka Resources Limited applied the following standards and amendments for the first time in the current
reporting period:
•
•
AASB 2020-8 Amendments to AASs - Interest Rate Benchmark Reform - Phase 2
IFRIC Agenda Decision - March 2021 - Configuration or Customisation Costs in a Cloud Computing
Arrangement (AASB 138)
Application of the above standards and amendments did not have any impact on the amounts recognised in prior
periods and is not expected to significantly affect current or future periods.
Forthcoming standards and amendments not yet adopted
There are no forthcoming standards and amendments that are expected to have a material impact on the entity
in the current or future reporting periods, or on foreseeable future transactions.
140
140
Iluka Resources Limited, Annual Report 2021
DIRECTORS’ DECLARATION
For the year ended 31 December 2021
DIRECTORS' DECLARATION
In the directors' opinion:
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
ILUKA RESOURCES LIMITED
31 DECEMBER 2021
In the directors' opinion:
In the directors' opinion:
(a)
DIRECTORS' DECLARATION
(a)
DIRECTORS' DECLARATION
the financial statements and notes set out on pages 87 to 140 are in accordance with the Corporations
ILUKA RESOURCES LIMITED
Act 2001, including:
31 DECEMBER 2021
complying with Accounting Standards and other mandatory professional reporting requirements as
(i)
the financial statements and notes set out on pages 87 to 140 are in accordance with the Corporations
detailed above, and the Corporations Regulations 2001; and
Act 2001, including:
(ii)
(i)
giving a true and fair view of the Group's financial position as at 31 December 2021 and of its
complying with Accounting Standards and other mandatory professional reporting requirements as
performance for the financial year ended on that date, and
detailed above, and the Corporations Regulations 2001; and
(b)
(a)
(c)
(b)
giving a true and fair view of the Group's financial position as at 31 December 2021 and of its
performance for the financial year ended on that date, and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
the financial statements and notes set out on pages 87 to 140 are in accordance with the Corporations
(ii)
giving a true and fair view of the Group's financial position as at 31 December 2021 and of its
become due and payable, and
Act 2001, including:
performance for the financial year ended on that date, and
at the date of this declaration, there are reasonable grounds to believe that the members of the extended
complying with Accounting Standards and other mandatory professional reporting requirements as
(i)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
closed group identified in note 23 will be able to meet any obligations or liabilities to which they are, or
detailed above, and the Corporations Regulations 2001; and
become due and payable, and
may become, subject by virtue of the deed of cross guarantee described in note 23.
(ii)
(c)
at the date of this declaration, there are reasonable grounds to believe that the members of the extended
Note 2 confirms that the financial statements also comply with International Financial Reporting Standards as
closed group identified in note 23 will be able to meet any obligations or liabilities to which they are, or
issued by the International Accounting Standards Board.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
(b)
may become, subject by virtue of the deed of cross guarantee described in note 23.
become due and payable, and
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required
Note 2 confirms that the financial statements also comply with International Financial Reporting Standards as
by section 295A of the Corporations Act 2001.
at the date of this declaration, there are reasonable grounds to believe that the members of the extended
(c)
issued by the International Accounting Standards Board.
closed group identified in note 23 will be able to meet any obligations or liabilities to which they are, or
This declaration is made in accordance with a resolution of the directors.
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required
may become, subject by virtue of the deed of cross guarantee described in note 23.
by section 295A of the Corporations Act 2001.
Note 2 confirms that the financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
This declaration is made in accordance with a resolution of the directors.
G Martin
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required
Chairman
by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
G Martin
Chairman
T O'Leary
Managing Director
G Martin
Chairman
24 February 2022
T O'Leary
Managing Director
24 February 2022
T O'Leary
Managing Director
24 February 2022
141
141
141
Iluka Resources Limited, Annual Report 2021
141
INDEPENDENT AUDITOR’S REPORT
To the members of Iluka Resources Limited
For the year ended 31 December 2021
Independent auditor’s report
To the members of Iluka Resources Limited
Report on the audit of the financial report
Independent auditor’s report
Independent auditor’s report
Our opinion
To the members of Iluka Resources Limited
In our opinion:
To the members of Iluka Resources Limited
Report on the audit of the financial report
The accompanying financial report of Iluka Resources Limited (the Company) and its controlled
Report on the audit of the financial report
entities (together the Group) is in accordance with the Corporations Act 2001, including:
Our opinion
(a) giving a true and fair view of the Group's financial position as at 31 December 2021 and of its
financial performance for the year then ended
In our opinion:
Our opinion
The accompanying financial report of Iluka Resources Limited (the Company) and its controlled
In our opinion:
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
entities (together the Group) is in accordance with the Corporations Act 2001, including:
The accompanying financial report of Iluka Resources Limited (the Company) and its controlled
What we have audited
entities (together the Group) is in accordance with the Corporations Act 2001, including:
The Group financial report comprises:
(a) giving a true and fair view of the Group's financial position as at 31 December 2021 and of its
financial performance for the year then ended
the directors’ declaration.
the consolidated statement of profit or loss for the year then ended
(a) giving a true and fair view of the Group's financial position as at 31 December 2021 and of its
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
the consolidated balance sheet as at 31 December 2021
financial performance for the year then ended
the consolidated statement of comprehensive income for the year then ended
•
•
What we have audited
•
The Group financial report comprises:
What we have audited
•
the consolidated statement of changes in equity for the year then ended
•
the consolidated balance sheet as at 31 December 2021
The Group financial report comprises:
•
the consolidated statement of cash flows for the year then ended
•
the consolidated statement of comprehensive income for the year then ended
•
the consolidated balance sheet as at 31 December 2021
•
the notes to the financial statements, which include significant accounting policies and other
•
the consolidated statement of profit or loss for the year then ended
explanatory information
•
the consolidated statement of comprehensive income for the year then ended
•
the consolidated statement of changes in equity for the year then ended
•
the directors’ declaration.
•
the consolidated statement of profit or loss for the year then ended
•
the consolidated statement of cash flows for the year then ended
•
the consolidated statement of changes in equity for the year then ended
•
Basis for opinion
the notes to the financial statements, which include significant accounting policies and other
•
the consolidated statement of cash flows for the year then ended
explanatory information
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
•
the notes to the financial statements, which include significant accounting policies and other
•
the directors’ declaration.
those standards are further described in the Auditor’s responsibilities for the audit of the financial
explanatory information
report section of our report.
•
Basis for opinion
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
Basis for opinion
for our opinion.
those standards are further described in the Auditor’s responsibilities for the audit of the financial
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
report section of our report.
Independence
those standards are further described in the Auditor’s responsibilities for the audit of the financial
We are independent of the Group in accordance with the auditor independence requirements of the
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
for our opinion.
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
for our opinion.
Independence
fulfilled our other ethical responsibilities in accordance with the Code.
We are independent of the Group in accordance with the auditor independence requirements of the
Independence
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
We are independent of the Group in accordance with the auditor independence requirements of the
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
fulfilled our other ethical responsibilities in accordance with the Code.
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999
Liability limited by a scheme approved under Professional Standards Legislation.
142
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
Liability limited by a scheme approved under Professional Standards Legislation.
T: +61 8 9238 3000, F: +61 8 9238 3999
Iluka Resources Limited, Annual Report 2021
Liability limited by a scheme approved under Professional Standards Legislation.
INDEPENDENT AUDITOR’S REPORT
To the members of Iluka Resources Limited
For the year ended 31 December 2021
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
• For the purpose of our audit we used overall Group materiality of $22 million, which represents
approximately 5% of the Group’s profit before tax.
• We applied this threshold, together with qualitative considerations, to determine the scope of
our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements on the financial report as a whole.
• We chose Group profit before tax because, in our view, it is the benchmark against which the
performance of the Group is most commonly measured.
• We utilised a 5% threshold based on our professional judgement, noting it is within the range of
commonly acceptable thresholds.
Audit Scope
• Our audit focused on where the Group made subjective judgements; for example, significant
accounting estimates involving assumptions and inherently uncertain future events.
• Component auditors, operating under our instructions, performed audit procedures over the
Group's Sierra Leone operations' financial information. These procedures, combined with the
work performed by us which included reviewing component auditors' work, as the Group
engagement team, provided sufficient appropriate audit evidence as a basis for our opinion on
the Group financial report as a whole.
Iluka Resources Limited, Annual Report 2021
143
INDEPENDENT AUDITOR’S REPORT
To the members of Iluka Resources Limited
For the year ended 31 December 2021
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the Audit
and Risk Committee.
Key audit matter
How our audit addressed the key audit matter
Closure and Rehabilitation Provisions
Refer to note 8 of the financial statements
As a result of its mining and processing operations,
the Group is obliged to restore and rehabilitate the
environment disturbed by these operations and
remove related infrastructure. Rehabilitation activities
are governed by a combination of legislative
requirements and Group policies.
At 31 December 2021 the consolidated balance sheet
included provisions for such obligations of $742
million.
This was a key audit matter given the determination of
these provisions required judgement by the Group in
the assessment of the nature and extent of the work
to be performed, the future cost of performing the
work, the timing of when the rehabilitation will take
place and economic assumptions such as the
discount rate for future cash outflows associated with
rehabilitation activities.
We performed the following procedures over the
Group’s rehabilitation provision, amongst others.
We evaluated key assumptions utilised in the
rehabilitation models by performing the following
procedures:
• Developed an understanding of how the Group
identified the relevant methods, assumptions or
sources of data, and the need for changes in
them, that are appropriate for developing the
rehabilitation provision in the context of the
Australian Accounting Standards.
• Evaluated the competency and independence of
the experts retained by the Group to assist with
the assessment of its rehabilitation obligations.
• Examined the Group’s assessment of significant
changes in future cost estimates from the prior
year.
• Compared the estimated future rehabilitation
costs to actual costs being incurred at the
Group’s sites for similar activities to assess the
extent to which rehabilitation estimates take into
account current experience, and tested on a
sample basis the provision to comparable data
from external parties and management’s
experts.
• Assessed the ability of the Group to make
reliable estimates of the extent of future
rehabilitation expenditure by comparing actual
cash outflows in 2021 to those forecast as part
of the provision in previous years.
•
Tested a sample of agreements with
stakeholders supporting the manner in which
the rehabilitation of legacy sites in Virginia will
occur.
144
Iluka Resources Limited, Annual Report 2021
INDEPENDENT AUDITOR’S REPORT
To the members of Iluka Resources Limited
For the year ended 31 December 2021
Key audit matter
Other information
How our audit addressed the key audit matter
• Considered the appropriateness of the discount
rates and inflation rates utilised in calculating
the provision by comparing them to current
market consensus.
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 31 December 2021, but does not include
the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
Iluka Resources Limited, Annual Report 2021
145
INDEPENDENT AUDITOR’S REPORT
To the members of Iluka Resources Limited
For the year ended 31 December 2021
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 67 to 85 of the directors’ report for the
year ended 31 December 2021.
In our opinion, the remuneration report of Iluka Resources Limited for the year ended 31 December
2021 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Helen Bathurst
Partner
Perth
24 February 2022
146
Iluka Resources Limited, Annual Report 2021
PHYSICAL, FINANCIAL AND
CORPORATE INFORMATION
In this section
FIVE YEAR PHYSICAL AND FINANCIAL SUMMARY
OPERATING MINES PHYSICAL DATA
ORE RESERVES/MINERAL RESOURCES STATEMENT
SHAREHOLDER INFORMATION
CORPORATE INFORMATION
Iluka Resources Limited, Annual Report 2021
147
PHYSICAL, FINANCIAL AND CORPORATE INFORMATION
FIVE YEAR PHYSICAL AND FINANCIAL SUMMARY
Production volumes (kt)
- Zircon
- Rutile
- Synthetic rutile
Total Z/R/SR
- Ilmenite
- Monazite
Sales volumes (kt)
- Zircon
- Rutile
- Synthetic rutile
Total Z/R/SR
- Ilmenite
- Monazite
Weighted average annual prices (US$/t)
- Zircon (premium and standard)
- Zircon (all products)
- Rutile (excluding HYTI and TIC)
- Synthetic rutile
2021
2020
2019
2018
2017
324.2
196.6
198.7
719.5
563.7
57.7
354.7
207.2
305.9
867.8
189.6
62.4
185.2
172.6
227.4
585.2
455.9
44.4
239.6
162.1
115.8
517.5
256.1
44.4
322.1
184.1
196.2
702.4
318.6
-
274.0
200.1
206.7
680.8
170.8
-
348.6
163.2
219.9
731.7
395.1
-
379.3
233.2
214.6
827.1
224.5
-
1,414.0
1,330.0
1,264.0
1,319.0
1,217.0
1,220.0
1,487.0
1,380.0
1,142.0
1,351.0
1,321.0
952.0
312.3
302.1
210.8
825.2
448.1
-
380.4
264.3
244.4
889.1
202.7
-
958.0
940.0
790.0
Not disclosed
Not disclosed
Not disclosed
Not disclosed
Not disclosed
Average AUD:USD spot exchange rate (cents)
75.2
69.1
69.5
74.8
76.7
Unit revenue and cash cost ($/t)
Revenue per tonne Z/R/SR sold (A$/t)
1,593
1,625
1,654
1,415
1,079
Unit cash costs of production per tonne Z/R/SR
produced excluding by-products
Unit cost of goods sold per tonne of Z/R/SR
777
916
918
1,032
753
889
606
750
439
743
Summary financials ($m)
Z/R/SR revenue
Ilmenite and other revenue
Revenue from operations
Cash costs of production
Inventory movement – cash costs of production
Restructure and idle capacity charges
Government royalties
Marketing and selling costs
Asset sales and other income
Corporate and other costs
Major projects, exploration and innovation
Mineral sands EBITDA
Mining Area C EBITDA
Underlying Group EBITDA(1)
Rehabilitation and holding costs for closed sites
Demerger / SRL transaction costs
Depreciation and amortisation
Inventory movement – non-cash production costs
Gain on demerger of Deterra Royalties
Significant non-cash items
Net interest and finance charges
Income tax (expense) benefit
Net profit (loss) after tax for the period (NPAT)
Operating cash flow
Capital expenditure (capex)
Free cash (outflow) inflow(2) ($m)
Net (debt) cash
148
Iluka Resources Limited, Annual Report 2021
1,381.9
103.9
1,485.8
(579.2)
(67.0)
(33.4)
(38.0)
(34.4)
2.0
(64.3)
(45.2)
633.9
-
652.3
60.8
-
(171.2)
(12.6)
-
-
(5.7)
(139.1)
365.9
527.6
(53.6)
299.5
294.8
841.0
106.0
947.0
(558.7)
142.3
(20.9)
(22.3)
(27.7)
(1.5)
(54.6)
(62.3)
342.0
81.1
423.1
7.2
(13.3)
(184.8)
39.9
2,260.1
-
(7.1)
(95.5)
2,410.0
183.8
(71.2)
36.3
50.2
1,128.7
1,179.0
64.4
1,193.1
(539.6)
63.4
(19.7)
(39.4)
(35.0)
(3.5)
(64.5)
(25.7)
530.9
85.1
616.0
(3.2)
-
(163.2)
15.5
-
(414.3)
(51.8)
(298.7)
(275.8)
408.1
(197.5)
139.7
43.3
65.1
1,244.1
(455.1)
(68.5)
(24.7)
(38.1)
(38.1)
1.8
(48.1)
(30.1)
544.5
55.6
600.1
4.6
-
(93.6)
(28.3)
-
-
(30.8)
(148.1)
303.9
594.2
(311.5)
304.4
959.1
58.4
1,017.5
(372.4)
(141.5)
(73.3)
(25.2)
(33.8)
0.7
(47.1)
(24.6)
300.9
59.6
360.5
(127.4)
-
(111.0)
(66.8)
-
(185.4)
(32.2)
(6.0)
(171.6)
391.7
(93.1)
321.9
1.8
(182.5)
Capital and dividends
Ordinary shares on issue (millions)
Dividends per share in respect of the year (cents)
Franking level %
Opening year share price ($)(3)
Closing year share price ($)(3)
Financial ratios
Underlying Group EBITDA/revenue margin %
Mineral sands EBITDA/revenue margin %
Basic earnings (loss) per share (cents)
Free cash flow per share (cents)
Return on shareholders’ equity(4) %
Return on capital(5) %
Gearing (net debt/net debt + equity) %
Financial position as at 31 December ($m)
Total assets
Total liabilities
Net assets
Shareholders’ equity
Net tangible asset backing per share ($)
Employees, as at 31 December
Full-time equivalent employees
Iluka Ore Reserves and Mineral Resources
Mineral Resources in situ HM million tonnes
Ore Reserves in situ HM million tonnes
HM Grade (%) Ore Reserves
Assemblage(6) (%)
Zircon
Rutile
Ilmenite
Monazite + xenotime
Sierra Rutile Ore Reserves and Mineral Resources
Mineral Resources In Situ Rutile million tonnes
Ore Reserves In Situ Rutile million tonnes
2021
422.0
24.0
100
6.58
10.10
43.9
42.7
86.7
71.0
25.9
69.1
n/a
2020
422.8
2.0
100
4.70
6.49
41.2
36.1
570.4
8.5
283.7
311.3
n/a
2019
422.6
13.0
100
3.80
4.73
51.6
44.5
(71.0)
33.1
(24.5)
6.8
n/a
2018
422.4
29.0
100
5.09
3.87
48.2
43.8
72.2
72.1
31.8
54.0
n/a
2017
418.7
31.0
100
3.71
5.17
35.4
29.6
(41.0)
76.9
(20.1)
(11.6)
17.1
2,636.2
(1,041.6)
1,594.6
1,292.3
2.6
2,361.7
(1,069.4)
1,292.3
1,292.3
3.0
1,894.5
(1,182.8)
711.6
711.6
1.6
2,211.9
(1,101.9)
1,110.0
1,110.0
2.1
1,947.0
(1,061.5)
885.5
885.5
1.7
3,252
3,354
3,427
3,421
2,543
185
10.6
5.8
17
3
55
2
8.1
3.1
119
11.2
5.7
17
3
55
-
7.9
3.6
165
13
5.6
18
3
56
-
8.2
3.7
168
15.7
5.8
17
4
54
-
8
3.8
169
16.4
5.8
19
4
52
-
7.3
3.8
Notes:
(1)
(2)
(3)
(4)
(5)
Underlying Group EBITDA excludes non-recurring adjustments including write-downs, Sierra Rutile Limited transaction costs, the gain on
the demerger of Deterra Royalties, and changes to rehabilitation provisions for closed sites. Underlying EBITDA also excludes Iluka’s share of
Metalysis Ltd’s losses, which are non-cash in nature.
Free cash flow is determined as cash flow before any debt refinance costs, proceeds/repayment of borrowings and dividends paid in the year.
Share prices prior to November 2020 have been adjusted by a factor of 0.51 for the capital reduction from the Deterra Royalties demerger.
Calculated as NPAT for the year as a percentage of the average monthly shareholders’ equity over the year.
Calculated as EBIT for the year as a percentage of average monthly capital employed for the year.
(6) Mineral assemblage is reported as a percentage of the in situ heavy mineral content of the Ore Reserve.
The Ore Reserves and Mineral Resources for the Sierra Leone rutile deposits are reported separately as there is insufficient information to state the
assemblage in terms of a portion of the heavy mineral (HM) content which is traditionally done in reporting heavy minerals. Historical data focused on
the in situ rutile content which is honoured in the reporting of Ore Reserves and Mineral Resources for Sierra Leone. Refer pages 151 to 158 or Iluka’s
website www.iluka.com for Ore Reserves and Mineral Resources Statement.
Iluka Resources Limited, Annual Report 2021
149
PHYSICAL, FINANCIAL AND CORPORATE INFORMATION
OPERATING MINES PHYSICAL DATA
12 Months to 31 December 2021
Mining
Overburden moved kbcm
Ore mined kt
Ore treated grade HM %
VHM treated grade %
Concentrating
HMC produced kt
VHM produced kt
VHM in HMC assemblage %
Zircon
Rutile
Ilmenite
HMC processed kt
Finished product(¹) kt
Zircon
Rutile
Ilmenite (saleable/upgradeable)
Synthetic rutile produced kt
Monazite concentrate kt
Notes:
Jacinth-
Ambrosia/
Mid west
Cataby
/ South west
Australia
Total
Sierra
Leone
Group Total
2021
Group Total
2020
3,350
10,356
3.0%
2.7%
263.8
233.8
88.6%
40.8%
8.1%
39.8%
453.3
271.2
30.3
127.7
-
57.7
7,432
8,187
6.2%
5.4%
541.3
480.0
88.7%
10.5%
7.2%
70.9%
469.9
48.9
37
383.9
198.7
-
10,782
18,543
4.5%
4.0%
805.1
713.8
88.7%
20.4%
7.5%
60.7%
923.3
320.1
67.3
511.6
198.7
57.7
321
9,133
3.4%
2.3%
300.7
206.6
68.7%
4.0%
44.1%
20.6%
311.6
4.1
129.3
52.1
-
-
11,103
27,676
3.8%
3.4%
1,105.7
920.4
83.2%
16.0%
17.5%
49.8%
1,234.9
324.2
196.6
563.7
198.7
57.7
15,564
32,620
4.4%
3.7%
1,182
971
82.2%
21.1%
16.6%
44.5%
1,008
185.2
172.6
455.9
227.4
44.4
(1)
Finished product includes material from heavy mineral concentrate (HMC) initially processed in prior periods
EXPLANATORY COMMENTS ON TERMINOLOGY
Overburden moved (bank cubic metres) refers to material moved to
enable mining of an ore body.
VHM produced and the VHM assemblage - provided to enable an
indication of the valuable heavy mineral component in HMC.
Ore mined (thousands of tonnes) refers to material moved containing
heavy mineral ore.
HMC processed provides an indication of material emanating from each
mining operation to be processed.
Ore treated grade HM % refers to percentage of heavy mineral (HM) in the
ore processed through the mining unit.
VHM treated grade % refers to percentage of valuable heavy mineral
(VHM) - titanium dioxide (rutile and ilmenite), and zircon in the ore
processed through the mining unit.
Concentrating refers to the production of heavy mineral concentrate
(HMC) through a wet concentrating process at the mine site, which is
then transported for final processing into finished product at a mineral
processing plant.
HMC produced refers to HMC, which includes the valuable heavy mineral
concentrate (zircon, rutile, ilmenite) as well as other non-valuable heavy
minerals (gangue).
VHM produced refers to an estimate of valuable heavy mineral in heavy
mineral concentrate expected to be processed.
Finished product is provided as an indication of the finished production
(zircon, rutile, ilmenite – both saleable and upgradeable) attributable to
the VHM in HMC production streams from the various mining operations.
Finished product levels are subject to recovery factors which can vary.
The difference between the VHM produced and finished product reflects
the recovery level by operation, as well as processing of finished material/
concentrate in inventory. Ultimate finished product production (rutile,
ilmenite, and zircon) is subject to recovery loss at the processing stage –
this may be in the order of 10%.
Ilmenite is produced for sale or as a feedstock for synthetic rutile
production. Typically, 1 tonne of upgradeable ilmenite will produce between
0.56 to 0.60 tonnes of synthetic rutile. Iluka also purchases external
ilmenite for its synthetic rutile production process.
150
Iluka Resources Limited, Annual Report 2021
ORE RESERVES/ MINERAL RESOURCES STATEMENT
HM ORE RESERVES
Iluka HM Ore Reserve Breakdown by Country, Region and JORC Category at 31 December 2021
Summary of Ore Reserves for Iluka(1,2,3,6)
HM Assemblage(4)
Country
Region
Ore
Reserve
Category
Ore
Tonnes
Millions
In Situ
HM
Tonnes
Millions
HM
Grade
(%)
Ilmenite
Grade
(%)
Zircon
Grade
(%)
Rutile
Grade
(%)
(M+X)(7)
Grade
(%)
Change HM
Tonnes
Millions
Australia
Eucla Basin
Proved
Probable
Total
Eucla Basin
Perth Basin
Proved
Probable
Perth Basin(5)
Proved
Probable
Grand Total
Total
Total
Total
Notes:
51
3
54
84
44
128
136
46
182
1.6
0.1
1.7
5.5
3.4
8.9
7.2
3.4
10.6
3.2
2.2
3.2
6.5
7.6
6.9
5.3
7.3
5.8
25
21
24
57
68
61
50
67
55
50
54
50
11
11
11
20
11
17
5
3
5
4
2
3
4
2
3
0.4
0.6
0.4
2.7
1.5
2.3
2.2
1.5
2.0
(0.3)
(0.3)
(0.6)
(1)
(2)
(3)
Competent Persons - Ore Reserves: A Walkenhorst (MAusIMM). The Ore Reserves were estimated in accordance with the JORC Code (2012 Edition),
other than the Ore Reserves for the South West deposits, which have not materially changed and were estimated in accordance with the JORC Code
(2004 Edition). Iluka Resources is undertaking further work in order to report these estimates in accordance with the JORC Code (2012 Edition).
Ore Reserves are a sub-set of Mineral Resources.
Rounding may generate differences in the last decimal place. Further detail is available in Iluka’s Resource and Reserve update available online at
iluka.com/operations-resource-development/ore-reserves-mineral-resources.
(4) Mineral assemblage is reported as a percentage of in situ HM content.
(5)
(6)
Rutile component in Perth Basin South West operations is sold as a leucoxene product.
The quoted figures are stated as at 31 December 2021 and have been depleted for all production conducted to this date.
(7) M+X comprise rare earth element bearing minerals monazite + xenotime.
The Ore Reserve statement for the year ending 31 December 2021 includes the rare earth element bearing minerals monazite and
xenotime. This inclusion is relevant as Iluka is now producing concentrate enriched in these minerals from stockpiles at Eneabba in the
Perth Basin.
For the year ending 2021, HM Ore Reserves decreased by 0.6Mt HM associated with mining depletion and adjustments, down from
11.2Mt HM to 10.6Mt HM.
The main factors contributing to the movement in Iluka’s HM Ore Reserves during 2021 include the following:
•
•
The Eucla Basin Ore Reserves decreased by 0.3Mt HM associated with mining depletion, pit optimisation and re-design at Jacinth
and Ambrosia.
The Perth Basin Ore Reserves decreased by 0.3Mt HM as a result of mine depletion and adjustment at Cataby (-0.3Mt HM) and
MSP By-Product Stockpile (-0.01Mt HM).
Iluka Resources Limited, Annual Report 2021
151
PHYSICAL, FINANCIAL AND CORPORATE INFORMATION
ORE RESERVES/ MINERAL RESOURCES STATEMENT
RUTILE ORE RESERVES (SIERRA LEONE)
Iluka Rutile Ore Reserve for Sierra Rutile by JORC Category at 31 December 2021
Summary of Ore Reserves for Iluka(1,2,3,6,7)
In Situ Mineral Content(4)
Country
Region
Ore Reserve
Category
Sierra Leone Sierra Leone Proved
Probable
Total
Sierra Leone
Notes:
Ore
Tonnes
Millions
134
78
212
In Situ
Rutile
Tonnes
Millions
2.0
1.1
3.1
Rutile
Grade
(%)
Ilmenite(5)
Grade
(%)
Zircon(5)
Grade
(%)
1.5
1.4
1.5
-
-
-
-
-
-
Change
Rutile
Tonnes
Millions
(0.5)
(1)
(2)
(3)
Competent Persons - Ore Reserves: A Walkenhorst (MAusIMM).
Ore Reserves are a sub-set of Mineral Resources.
Rounding may generate differences in last decimal place. Further detail is available in Iluka’s Resource and Reserve update available online at
iluka.com/operations-resource-development/ore-reserves-mineral-resources.
(4) Mineral content is reported as a percentage of in situ material.
(5)
(6)
(7)
The ilmenite and zircon are only considered to be at an Inferred level of confidence in the Mineral Resource estimates, and while present,
currently have a low value ascribed in the reserve optimisation process for Sierra Leone. This is not material to the economic viability.
The quoted figures are stated as at 31 December 2021 and have been depleted for all production conducted to this date.
The total Ore Reserves for Sierra Leone are stated. As of 31 December 2021, International Finance Corporation (IFC) held a 10% equity stake in
Iluka Investments (BVI) Limited, the holding company of Sierra Rutile Limited.
Ore Reserves are prepared using all available geological and relevant drill hole and assay data, including mineralogical sampling and
test work on mineral recoveries and final product qualities. Ore Reserve estimates are determined by taking into consideration of all
of the “Modifying Factors”, and for example, may include but are not limited to, product prices, mining costs, metallurgical recoveries,
environmental consideration, access and approvals. These factors may vary significantly between deposits.
The Ore Reserves and Mineral Resources for the Sierra Leone rutile deposits are reported separately as there is insufficient
information to state the assemblage in terms of a portion of the HM content which is traditionally done in reporting HM deposits.
Historical data is focused on the in situ rutile content which is honoured in the reporting of Ore Reserves and Mineral Resources for
Sierra Leone. An equivalent comparison of the rutile tonnages contained in Iluka’s Ore Reserve inventory for HM can be calculated
using the formula:
[Rutile tonnes = HM tonnes * Rutile %] that is [10.6*(3/100)] = 0.32 Mt of rutile.
The total reported Mineral Resources and Ore Reserves have been stated for Sierra Leone. As at 31 December 2021, International
Finance Corporation (IFC) held a 10% equity stake in Iluka Investments (BVI) Limited, the holding company of Sierra Rutile Limited.
The Mineral Resources and Ore Reserves for the Sierra Leone rutile deposits attributable to Iluka will be 90% of the stated estimates.
152
Iluka Resources Limited, Annual Report 2021
HM ORE RESERVES MINED AND ADJUSTED
Iluka HM Ore Reserves mined and adjusted by country and region at 31 December 2021
Summary of Ore Reserve Depletion(1)
In Situ HM
Tonnes
Millions
2020
In Situ HM
Grade
(%)
2020
In Situ HM
Tonnes
Millions
Mined
2021
In Situ HM
Tonnes(2)
Millions
Adjusted
2021
In Situ HM
Tonnes
Millions
2021
In Situ HM
Grade
(%)
2021
2.0
-
2.0
7.3
1.9
9.2
9.2
1.9
11.2
3.1
-
3.1
6.3
11.4
6.9
5.1
11.4
5.7
(0.3)
-
(0.3)
(0.6)
-
(0.6)
(0.9)
-
(0.9)
0.0
-
0.0
0.3
-
0.3
0.3
-
0.3
1.7
-
1.7
7.0
1.9
8.9
8.7
1.9
10.6
3.2
-
3.2
6.3
11.4
6.9
5.2
11.4
5.8
In Situ
HM
Tonnes(3)
Millions
Net
Change
(0.3)
-
(0.3)
(0.3)
-
(0.3)
(0.6)
-
(0.6)
Country
Australia
Region
Category
Eucla Basin
Active Mines
Non-Active
Sites
Total
Eucla Basin
Perth Basin
Active Mines
Non-Active
Sites
Total
Total
Total
Total
Notes:
Perth Basin
Active Mines
Non-Active
Sites
Ore Reserves
(1)
(2)
(3)
Rounding may generate differences in the last decimal place. Further detail is available in Iluka’s Resource and Reserve update available online at
iluka.com/operations-resource-development/ore-reserves-mineral-resources.
Adjusted figure includes write-downs and modifications in mine design.
Net change includes depletion by mining and adjustments.
RUTILE ORE RESERVES MINED AND ADJUSTED
The rutile Ore Reserves for Sierra Leone decreased by 0.53Mt rutile associated with mining depletion and adjustments, down from 3.6Mt
rutile to 3.1Mt rutile.
The main factors contributing to the movement in Iluka’s rutile Ore Reserves during 2021 include the following:
•
•
•
Mining depletion at Gangama (-0.08Mt rutile) and mining depletion at Gbeni (-0.06Mt rutile).
Adjustments from optimisation and pit design at Lanti (-0.03Mt rutile), Benduma (-0.36Mt rutile), Dodo (+0.03Mt rutile), Kamatipa
(-0.02Mt rutile), Kibi (-0.03Mt rutile), and Komende (-0.02Mt rutile).
Inclusion of the Ore Reserve for Taninahun (+0.04 Mt rutile)
Iluka Rutile Ore Reserves mined and adjusted for Sierra Rutile at 31 December 2021
Summary of Ore Reserve Depletion(1)
In Situ
Rutile
Tonnes
Millions
2020
0.6
3.1
3.6
In Situ
Rutile
Grade
(%)
2020
1.4
1.3
1.3
In Situ
Rutile
Tonnes
Millions
Mined
2021
In Situ
Rutile
Tonnes(2)
Millions
Adjusted
2021
(0.1)
-
(0.1)
(0.0)
(0.4)
(0.4)
In Situ
Rutile
Tonnes
Millions
2021
0.4
2.7
3.1
In Situ
Rutile
Grade
(%)
2021
1.4
1.5
1.5
In Situ
Rutile
Tonnes(3)
Millions
Net
Change
(0.1)
(0.4)
(0.5)
Country
Region
Category
Sierra Leone Sierra Leone
Active Mines
Non-Active
Sites
Total
Notes:
Sierra Leone(4)
(1)
(2)
(3)
(4)
Rounding may generate differences in the last decimal place. Further detail is available in Iluka’s Resource and Reserve update available online at
iluka.com/operations-resource-development/ore-reserves-mineral-resources.
Adjusted figure includes write-downs and modifications in mine design.
Net change includes depletion by mining and adjustments.
The total Ore Reserves for Sierra Leone are stated. As at 31 December 2021, International Finance Corporation (IFC) held a 10% equity stake in Iluka
Investments (BVI) Limited, the holding company of Sierra Rutile Limited.
Iluka Resources Limited, Annual Report 2021
153
PHYSICAL, FINANCIAL AND CORPORATE INFORMATION
ORE RESERVES/ MINERAL RESOURCES STATEMENT
HM MINERAL RESOURCES
Iluka Mineral Resource breakdown by country, region and JORC category at 31 December 2021
Summary of Mineral Resources for Iluka(1,2,3,7)
HM Assemblage(4)
Country
Region
Mineral
Resource
Category
Material
Tonnes
Millions
In Situ
HM
Tonnes
Millions
In Situ
HM
Grade
(%)
Ilmenite
Grade
(%)
Zircon
Grade
(%)
Rutile
Grade
(%)
(M+X)(8)
Grade
(%)
Change
HM
Tonnes
Millions
Australia
Eucla Basin Measured
Indicated
Inferred
Total
Eucla Basin
Murray Basin Measured
Indicated
Inferred
Total
Murray Basin
Perth Basin
Measured
Total
USA
Perth Basin(5)
Atlantic
Seaboard
Indicated
Inferred
Measured
Indicated
Inferred
Total
Atlantic
Seaboard(6)
Sri Lanka Sri Lanka
Inferred
Total
Sri Lanka(7)
Measured
Indicated
Inferred
Grand Total
Total
Total
Total
Notes:
199
91
52
342
16
427
1127
1,570
474
300
193
967
27
47
16
91
136
136
716
865
1,524
3,105
(1)
Competent Persons - Mineral Resources: B Gibson (MAIG).
(2) Mineral Resources are inclusive of Ore Reserves.
5
8
3
16
4
34
62
101
28
16
9
54
1
3
1
4
10
10
39
61
84
185
2.6
9.1
5.8
4.8
27.6
8.1
5.5
6.4
5.9
5.3
4.9
5.5
4.9
5.3
3.1
4.8
7.0
7.0
5.5
7.1
5.5
5.9
33
68
62
56
62
45
35
40
58
53
55
56
67
64
60
64
65
65
55
51
42
48
41
18
19
25
11
14
14
14
11
10
9
10
9
11
11
10
4
4
15
13
13
13
4
2
2
3
11
10
7
8
5
5
5
5
-
-
-
-
5
5
5
7
6
6
0.3
0.4
0.3
0.3
1.1
1.7
2.0
1.8
1.1
0.8
0.8
1.0
-
-
-
-
0.4
0.4
1.0
1.2
1.6
1.3
(0.2)
67.2
(1.3)
-
-
65.7
(3)
Rounding may generate differences in the last decimal place. Further detail is available in Iluka’s Resource and Reserve update available online at
iluka.com/operations-resource-development/ore-reserves-mineral-resources.
(4) Mineral assemblage is reported as a percentage of the in situ HM component.
(5)
(6)
(7)
Rutile component in Perth Basin South West operations is sold as a leucoxene product.
Rutile is included in Ilmenite for the Atlantic Seaboard region.
As of 31 December 2021, the total Mineral Resource for Coco stands at 340 million tonnes at 7.0% HM for 24 million tonnes of HM and the Iluka
Attributable Mineral Resource stands at 136 million tonnes at 7.0% HM for 9.5 million tonnes of HM reflecting Iluka’s 40% ownership.
M+X comprise the rare earth element bearing minerals monazite + xenotime.
154
Iluka Resources Limited, Annual Report 2021
RUTILE MINERAL RESOURCES (SIERRA LEONE)
Iluka Rutile Mineral Resources for Sierra Rutile by JORC category at 31 December 2021
Summary of Mineral Resources for Iluka(1,2,3,6)
In Situ Mineral Content(4)
Country
Region
Mineral
Resource
Category
Material
Tonnes
Millions
Sierra Leone Sierra Leone
Measured
Indicated
Inferred
Sierra Leone(6)
Total
Notes:
178
309
265
752
(1)
Competent Persons - Mineral Resources: B Gibson (MAIG)
(2) Mineral Resources are reported inclusive of Ore Reserves.
In Situ
Rutile
Tonnes
Millions
2.4
3.1
2.6
8.1
Rutile
Grade
(%)
1.4
1.0
1.0
1.1
Ilmenite
Grade
(%)(5)
0.8
0.6
0.5
0.6
Zircon
Grade
(%)(5)
0.1
0.1
0.1
0.1
Change
Rutile
Tonnes
Millions
0.2
(3)
Rounding may generate differences in last decimal place. Further detail is available in Iluka’s Resource and Reserve update available online at
iluka.com/operations-resource-development/ore-reserves-mineral-resources.
(4) Mineral assemblage is reported as a percentage of in situ material.
(5)
(6)
Ilmenite and zircon are included for tabulation purposes under the Measured and Indicated Resource categories. The confidence in the Mineral
Resource estimates for Ilmenite and zircon are only considered to be at an Inferred level of confidence and should not be used in the estimation
of Ore Reserves.
The total Mineral Resources for Sierra Leone are stated. As of 31 December 2021, International Finance Corporation (IFC) held a 10% equity
stake in Iluka Investments (BVI) Limited, the holding company of Sierra Rutile Limited.
Mineral Resources are estimated using all available and relevant geological, drill hole and assay data, including mineralogical
sampling and test work on mineral and final product qualities. Resource estimates are determined by consideration of geology,
HM or rutile cut-off grades, mineralisation thickness vs. overburden ratios and consideration of the potential mining and extraction
methodology and are prepared in accordance with the 2012 JORC Code. These factors may vary significantly between deposits.
The Mineral Resource statement for the year ending 31 December 2021 includes the rare earth element bearing minerals monazite
and xenotime. This inclusion is relevant as Iluka is now producing concentrate enriched in these minerals from stockpiles at Eneabba
in the Perth Basin.
For the year ending 31 December 2021, HM Mineral Resources increased by 66Mt HM net of mining depletion and adjustments
(exploration discovery, development and write-down) up from 119Mt HM to 185Mt HM. The change in Mineral Resources for 2021
was driven by the following:
•
•
•
Eucla Basin Mineral Resources decreased by 0.16Mt HM as a result of updated resource estimation and mining depletion at
Ambrosia (+0.16Mt HM) and mining depletion and adjustment at Jacinth (-0.32Mt HM).
Murray Basin Mineral Resources increased by 67Mt HM as a result of reporting the inaugural resource estimates at WIM100
(+19Mt HM), WIM50 (+15Mt HM) and WIM50 North (+33Mt HM).
Perth Basin Mineral Resources decreased by 1.3Mt HM as a result of re-estimation, mining depletion and write-down at
Cataby (-0.75Mt HM), mining depletion and replenishment of the MSP By-Product Stockpile (+0.02Mt HM) and write down at
South Capel Offices (-0.54Mt HM).
The rutile Mineral Resources for Sierra Leone increased by 0.2Mt rutile net of mining depletion and adjustments (exploration
discovery, development and write down) up from 7.9Mt rutile to 8.1Mt rutile. The change in rutile Mineral Resources was driven by:
•
•
Mining depletion and write downs at Gbeni (-0.07Mt rutile) and Gangama (-0.10Mt rutile ).
Updated resource estimation at Benduma (+0.09Mt rutile), Dodo (+0.10Mt rutile), Gbap (+0.11Mt rutile), Kibi (+0.09Mt rutile)
and Komende (-0.01Mt rutile).
Iluka Resources Limited, Annual Report 2021
155
PHYSICAL, FINANCIAL AND CORPORATE INFORMATION
ORE RESERVES/ MINERAL RESOURCES STATEMENT
HM MINERAL RESOURCES MINED AND ADJUSTED
Iluka Mineral Resources mined and adjusted by country and region at 31 December 2021
Summary of Ore Reserve Depletion (1)
In Situ
HM
Tonnes
Millions
2020
In Situ
HM
Grade
(%)
2020
In Situ
HM
Tonnes
Millions
Mined
2021
In Situ
HM
Tonnes(2)
Millions
Adjusted
2021
In Situ
HM
Tonnes(4)
Millions
2021
In Situ
HM
Grade
(%)
2021
In Situ
HM
Tonnes(3)
Millions
Net
Change
4
13
17
-
33
33
14
41
55
-
4
4
-
10
10
18
101
119
2.2
7.3
4.8
-
17.2
17.2
4.6
6.0
5.6
-
4.8
4.8
-
7.0
7.0
3.7
7.9
6.8
(0)
-
(0)
-
-
-
(1)
-
(1)
-
-
-
-
-
-
(1)
-
(1)
0
-
0
-
67
67
(0)
(1)
(1)
-
-
-
-
-
-
0
67
67
4
13
16
-
101
101
13
40
54
-
4
4
-
10
10
17
168
185
2.1
7.3
4.8
-
6.4
6.4
4.6
5.9
5.5
-
4.8
4.8
-
7.0
7.0
3.7
6.3
5.9
(0)
-
(0)
-
67
67
(1)
(1)
(1)
-
-
-
-
-
-
(1)
67
66
Country
Region
Category
Australia
Eucla Basin
Active Mines
Non-Active
Sites
Total
Eucla Basin
Murray Basin
Active Mines
Non-Active
Sites
Total
Murray Basin
Perth Basin
Active Mines
Non-Active
Sites
Perth Basin
Atlantic Seaboard Active Mines
Non-Active
Sites
Active Mines
Non-Active
Sites
Total
USA
Total
Atlantic
Seaboard
Sri Lanka Sri Lanka
Total
Sri Lanka(4)
Active Mines
Non-Active Sites
Mineral
Resources
Total
Total
Total
Notes:
(1)
(2)
(3)
(4)
Rounding may generate differences in last decimal place. Further detail is available in Iluka’s Resource and Reserve update available online at
iluka.com/operations-resource-development/ore-reserves-mineral-resources.
Adjusted figure includes exploration discovery, write-downs and modifications in mine design.
Net difference includes depletion by mining and adjustments.
As of 31 December 2021, the total Mineral Resource for Coco stands at 340 million tonnes at 7.0% HM for 24 million tonnes of HM and the Iluka
Attributable Mineral Resource stands at 136 million tonnes at 7.0% HM for 9.5 million tonnes of HM reflecting Iluka’s 40% ownership.
156
Iluka Resources Limited, Annual Report 2021
RUTILE MINERAL RESOURCES MINED AND ADJUSTED (SIERRA LEONE)
Iluka Rutile Mineral Resources mined and adjusted for Sierra Rutile at 31 December 2021
Summary of Mineral Resource Depletion(1)
In Situ
Rutile
Tonnes
Millions
2020
1.0
7.0
7.9
In Situ
Rutile
Grade
(%)
2020
1.3
1.1
1.1
In Situ
Rutile
Tonnes
Millions
Mined
2021
In Situ
Rutile
Tonnes(2)
Millions
Adjusted
2021
(0.1)
(0.0)
-
(0.1)
0.3
0.3
In Situ
Rutile
Tonnes
Millions
2021
0.8
7.3
8.1
In Situ
Rutile
Grade
(%)
2021
1.3
1.1
1.1
In Situ
Rutile
Tonnes(3)
Millions
Net
Change
(0.2)
0.3
0.2
Country
Region
Category
Sierra Leone Sierra Leone
Active Mines
Non-Active
Sites
Sierra Leone(4)
Total
Notes:
(1)
(2)
(3)
(4)
Rounding may generate differences in the last decimal place. Further detail is available in Iluka’s Resource and Reserve update available online at
iluka.com/operations-resource-development/ore-reserves-mineral-resources.
Adjusted figure includes exploration discovery, write-downs and modifications in mine design.
Net difference includes depletion by mining and adjustments.
The total Mineral Resources for Sierra Leone are stated. As of 31 December 2021, International Finance Corporation (IFC) held a 10% equity
stake in Iluka Investments (BVI) Limited, the holding company of Sierra Rutile Limited.
Iluka Resources Limited, Annual Report 2021
157
PHYSICAL, FINANCIAL AND CORPORATE INFORMATION
ANNUAL STATEMENT OF MINERAL RESOURCES AND ORE RESERVES
The Annual Statement of Mineral Resources and Ore Reserves as at 31 December 2021 and presented in this Report has been prepared
in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 Edition (the
JORC Code 2012) and ASX listing Rules and as disclosed in various public announcements released through the ASX. Information
prepared and disclosed under the JORC Code 2004 Edition and which has not materially changed since last reported has not been
updated. Iluka is not aware of any new information or data that materially affects the information included in this Annual Statement and
confirms that the material assumptions and technical parameters underpinning the estimates in the relevant market announcement
continue to apply and have not materially changed.
COMPETENT PERSONS STATEMENT
MINERAL RESOURCES AND ORE RESERVES
CORPORATE GOVERNANCE
Iluka has an established governance process supporting the
preparation and publication of Mineral Resources and Ore
Reserves which includes a series of structures and processes
independent of the operational reporting through business units
and product groups.
The Audit and Risk Committee has in its remit the governance of
resources and reserves. This includes an annual review of Mineral
Resources and Ore Reserves at a group level, as well as review of
findings and progress from the Group Resources and Reserves
internal audit programme within the regular meeting schedule.
Mineral Resources and Ore Reserves are estimated by Iluka
Personnel or suitably qualified independent personnel using
industry standard techniques and supported by internal
guidelines for the estimation and reporting of Mineral Resources
and Ore Reserves.
All Mineral Resource and Ore Reserve estimates and supporting
documentation are reviewed by Competent Persons employed
by Iluka. If there is a material change in the estimate of a Mineral
Resource, the Modifying Factors for the preparation of Ore
Reserves, or reporting an inaugural Mineral Resource or Ore
Reserve and if it is considered prudent to have an external review,
then the estimate and supporting documentation in question is
reviewed by a suitably qualified independent Competent Person.
The Iluka Mineral Resource and Ore Reserve position is reviewed
annually by a suitably qualified independent Competent Person
prior to publication and the governance process is also audited
by an independent body (PricewaterhouseCoopers).
Iluka has continued the development of internal systems and
controls in order to meet JORC (2012) guidelines in all external
reporting, including the preparation of all reported data by
Competent Persons as members of The Australasian Institute
of Mining and Metallurgy (The AusIMM), The Australian Institute
of Geoscientists (AIG) or Recognised Overseas Professional
Organisations (ROPOs).
The establishment of an enhanced governance process has
also been supported by a number of process improvements
and training initiatives over recent years, including a Web based
group reporting and sign-off database, annual internal Competent
Person reports and Competent Person development and training.
The information in this report that relates to Mineral Resources
is based on information compiled by Mr Brett Gibson who is a
Member of the Australian Institute of Geoscientists (MAIG).
The information in this report that relates to Ore Reserves is
based on information compiled by Mr Andrew Walkenhorst who
is a Member of the Australasian Institute of Mining and Metallurgy
(MAusIMM).
Mr Gibson and Mr Walkenhorst are full time employees of Iluka
Resources.
Mr Gibson and Mr Walkenhorst each have sufficient experience
that is relevant to the styles of mineralisation and types of
deposits under consideration and to the activity which is being
undertaken to qualify as a Competent Person as defined in
the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’,
the JORC Code 2012 Edition. Mr Gibson and Mr Walkenhorst
consent to the inclusion in this report of the matters based on
this information in the form and context in which it appears.
The information in this report that relates to specific Mineral
Resources and Ore Reserves is based on and accurately reflects
reports compiled by Competent Persons as defined in the JORC
Code 2012 for each of the company regional business units.
Each of these persons is a full-time employee of Iluka Resources
Limited or its relevant subsidiaries, holds equity securities in
Iluka Resources Limited and is entitled to participate in Iluka’s
executive equity incentive plan, details of which are included in
Iluka’s 2021 Remuneration report.
All the Competent Persons named are Members of The
Australasian Institute of Mining and Metallurgy and/or The
Australian Institute of Geoscientists and/or the relevant
jurisdiction ROPO (Recognised Overseas Professional
Organisation) and have sufficient experience which is relevant
to the styles of mineralisation and types of deposits under
consideration and to the activity they are undertaking to qualify
as a Competent Person as defined in the JORC Code 2012. At
the reporting date, each Competent Person listed in this report
is a full-time employee of Iluka Resources Limited or one of its
subsidiaries. Each Competent Person consents to the inclusion
of material in the form and context in which it appears.
All of the Mineral Resource and Ore Reserve figures reported
represent estimates as at 31 December 2021. All tonnes and
grade information has been rounded, hence small differences
may be present in the totals. All of the Mineral Resource
information is inclusive of Ore Reserves (i.e. Mineral Resources
are not additional to Ore Reserves).
158
Iluka Resources Limited, Annual Report 2021
SHAREHOLDER AND CORPORATE INFORMATION
As at 31 January 2022
AUSTRALIAN SECURITIES EXCHANGE LISTING
Iluka’s shares are listed on the Australian Securities Exchange (ASX) Limited. The company is listed as Iluka Resources Limited with an
ASX code of ILU.
SHARES ON ISSUE
The company had 423,202,342 shares on issue as at 31 January 2022. A total of 431,304 ordinary shares are restricted pursuant to the
Directors, Executives and employees share acquisition plan, equity incentive plan and employee share plan.
SHAREHOLDINGS
There were 19,183 shareholders. Voting rights, on a show of hands, are one vote for every registered holder and on a poll, are one vote for
each share held by registered holders.
DISTRIBUTION OF SHAREHOLDINGS
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 1,000,000
1,000,001 and over
Unmarketable Parcels
Total holders
11,338
6,247
943
606
35
14
(less than $500) - 1,224
TOP 20 SHAREHOLDERS (NOMINEE COMPANY HOLDINGS)
Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
UBS NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
NETWEALTH INVESTMENTS LIMITED
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
CPU SHARE PLANS PTY LTD
R O HENDERSON (BEEHIVE) PTY LIMITED
CS THIRD NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
BRISPOT NOMINEES PTY LTD
ONE MANAGED INVT FUNDS LTD
UBS NOMINEES PTY LTD
Number of shares
179,328,075
81,347,036
51,063,968
24,066,628
8,278,911
8,233,686
7,677,430
5,016,591
2,987,013
1,650,900
1,498,798
1,483,406
1,212,052
1,090,000
796,742
749,046
584,000
573,179
565,087
497,747
% units
42.37
19.22
12.07
5.69
1.96
1.95
1.81
1.19
0.71
0.39
0.35
0.35
0.29
0.26
0.19
0.18
0.14
0.14
0.13
0.12
SUBSTANTIAL SHAREHOLDERS
(AS PROVIDED IN DISCLOSED SUBSTANTIAL SHAREHOLDER NOTICES TO THE COMPANY)
Shareholder
Perpetual Investment Management Limited
Tyndall Asset Management
Alphinity Investment Management Pty Ltd.
Shareholding
% of issued capital
35,187,594
23,676,355
22,699,553
8.3%
5.6%
5.4%
Iluka Resources Limited, Annual Report 2021
159
CALENDAR OF KEY EVENTS
23 February 5:30pm (WST)
24 February
11 April 9:30am (WST)
13 April 9:30am (WST)
21 April
21 July
24 August
20 October
31 December
Close of director nominations
Announcement of financial results
Closure of acceptances of proxies for AGM
Annual General Meeting
March quarterly review
June quarterly review
Announcement of half year financial results
September quarterly review
Financial year end
All dates are indicative and subject to change. Shareholders are advised to check with the company to confirm timings.
SHAREHOLDER AND NEW INVESTOR INFORMATION
Key shareholder information – Iluka website: www.iluka.com
To assist those considering an investment in the company, the investors and media section of the Iluka website contains key shareholder
information, which includes the calendar of events. This site contains information on Iluka’s products, marketing, operations, ASX releases
and financial and quarterly reports. It also contains links to other sites, including the share registry.
INVESTOR RELATIONS ENQUIRIES
Investor Relations
Level 17, 240 St Georges Terrace
Perth WA 6000
Telephone: +61 8 9360 4700
Email: investor.relations@iluka.com
DIVIDENDS
Iluka’s Board of Directors typically makes a determination on dividend payments twice each year. Iluka introduced a dividend
reinvestment plan (DRP) in 2018.
SHARE REGISTRY SERVICES
Shareholders who require information about their shareholdings, dividend payments or related administrative matters should contact the
company’s share registry:
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
Telephone: 1300 733 043 (within Australia) or +61 3 9415 4801 (outside Australia)
Facsimile: +61 3 9473 2500
Postal address GPO Box 2975
Melbourne VIC 3001
Website: www.investorcentre.com/au
ANNUAL REPORTS AND EMAIL NOTIFICATION OF MAJOR ACCOUNTS
Shareholders can elect to receive a printed copy of the Annual Report and/or receive an email notification related to major company
events. Please contact Computershare. Each enquiry should refer to the shareholder number which is shown on holding statements and
dividend statements.
160
Iluka Resources Limited, Annual Report 2021
CORPORATE INFORMATION
COMPANY DETAILS
REGISTERED OFFICE
WEBSITE
Iluka Resources Limited
ABN: 34 008 675 018
Level 17, 240 St Georges Terrace Perth
Western Australia, 6000
COMPANY SECRETARY
POSTAL ADDRESS
Ben Martin, Company Secretary
Nigel Tinley, Joint Company Secretary
GPO Box U1988 Perth,
Western Australia, 6845 Australia
Telephone: +61 8 9360 4700
Facsimile: +61 8 9360 4777
NOTICE OF ANNUAL GENERAL MEETING
www.iluka.com
The site contains information on Iluka’s
products, marketing, operations, ASX
releases and financial and quarterly
reports. It also contains links to other sites,
including the share registry.
Iluka’s 67th Annual General Meeting of Shareholders (AGM) will be held as a hybrid meeting, online and at the Theatrette on Mezzanine
level at 240 St Georges Terrace, Perth, Western Australia on Wednesday, 13 April 2022 commencing at 9:30 am (WST).
The Board considers the health and safety of Iluka shareholders to be paramount, and as such Shareholders and proxyholders who would
prefer not to attend in person may choose to participate in a live webcast of the meeting through the Computershare online platform,
including the ability to ask questions (written or oral) and vote online during the meeting. Due to the ongoing developments with the
COVID-19 situation and public health concerns, Iluka will be closely monitoring the evolving COVID-19 situation in Australia. If it becomes
necessary or appropriate to make alternative arrangements for the holding of the AGM, Iluka will ensure that Shareholders are given as
much notice as possible via the ASX platform and www.iluka.com.
Shareholders are also encouraged to lodge proxy votes in advance of the meeting to ensure that their voting instructions will be received
and votes cast, and to monitor the Company’s website and ASX platform in case any alternative arrangements become necessary.
CLOSE OF NOMINATIONS
All nominations for election as a director at the 67th Annual General Meeting of Shareholders must be received in writing no later than
5:30 pm (WST) on Wednesday, 23 February 2022 in order to be valid under IIuka’s constitution.
FORWARD-LOOKING STATEMENTS
This document contains certain statements which constitute “forward-looking statements”.
Often, but not always, forward-looking statements can generally be identified by the use of forward-looking words such as “may”, “will”,
“expect”, “plan”, “believes”, “estimate”, “anticipate”, “outlook” and “guidance”, or similar expressions, and may include, without limitation,
statements regarding plans; strategies and objectives of management; anticipated production and production potential; estimates of
future capital expenditure or construction commencement dates; expected costs or production outputs; estimates of future product
supply, demand and consumption; statements regarding future product prices; and statements regarding the expectation of future
Mineral Resources and Ore Reserves.
While these forward-looking statements reflect Iluka’s expectations at the date of this report, they are not guarantees or predictions of
future performance or statements of fact. The information is based on Iluka forecasts and as such is subject to variation related to, but
not restricted to, economic, market demand/supply and competitive factors.
Forward-looking statements are only predictions and are subject to known and unknown risks, uncertainties, assumptions and other
important factors that could cause the actual results, performances or achievements of Iluka to differ materially from future results,
performances or achievements expressed, projected or implied by such forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the date thereof.
Except as required by applicable laws or regulations, Iluka does not undertake to publicly update or review any forward-looking
statements, whether as a result of new information or future events. Iluka cautions against reliance on any forward-looking statements or
guidance, particularly in light of the current economic climate and the significant volatility, uncertainty and disruption arising in connection
with COVID-19.
Information on likely developments in the Group’s business strategies, prospects and operations for future financial years and the
expected results that could result in unreasonable prejudice to the Group (for example, information that is commercially sensitive,
confidential or could give a third party a commercial advantage) has not been included below in this report. The categories of information
omitted include forward-looking estimates and projections prepared for internal management purposes, information regarding Iluka’s
operations and projects, which are developing and susceptible to change, and information relating to commercial contracts.
NON-IFRS FINANCIAL INFORMATION
This document contains non-IFRS financial measures including cash production costs, non-production costs, mineral sands EBITDA,
Underlying Group EBITDA, EBIT, free cash flow, and net debt amongst others. Iluka management considers these to be key financial
performance indicators of the business and they are defined and/or reconciled in Iluka’s annual results materials and/or Annual Report.
Non-IFRS measures have not been subject to audit or review. All figures are expressed in Australian dollars unless stated otherwise.
Iluka Resources Limited, Annual Report 2021
161
Jacinth-Ambrosia, South Australia
Narngulu, Western Australia
Lanti, Sierra Leone
Cataby, Western Australia
www.iluka.com
164
Iluka Resources Limited, Annual Report 2021