ANNUAL
REPORT
DELIVER SUSTAINABLE VALUE
2023
ABOUT ILUKA
RESOURCES
Iluka Resources Limited (Iluka or the company) is
a global critical minerals company with expertise
in exploration, project development, mining,
processing, marketing and rehabilitation.
The company’s objective is to deliver sustainable
value.
With more than 70 years’ industry experience,
Iluka is a leading producer of zircon and high-grade
titanium feedstocks (rutile and synthetic rutile).
Via the company’s development of Australia’s first
fully-integrated rare earths refinery at Eneabba in
Western Australia, Iluka is set to become a globally
material supplier of separated rare earth oxides.
Iluka’s products are used in an array of applications
including technology, construction, medical,
lifestyle, defence and industrial uses.
As the world moves towards a more sustainable
future, Iluka’s high-quality, Australian critical
minerals products are in increasing demand.
Alongside the company’s Australian production
base and development pipeline, Iluka has a
globally integrated marketing network. Exploration
activities are conducted both within Australia and
internationally and Iluka is actively engaged in the
rehabilitation of previous activities in the United
States and Australia.
Headquartered in Perth, Western Australia, Iluka
is listed on the Australian Securities Exchange
(ASX). Iluka holds a 20% stake in Deterra Royalties,
the largest ASX-listed resources-focused royalty
company.
Our products
ZIRCON
Iluka is one of the world’s largest producers of zircon. From premium-grade
zircon to zircon-in-concentrate, Iluka delivers quality products to a wide range of
customers around the world utilising its well-developed logistics and distribution
capabilities. Applications for Iluka’s zircon include ceramics, refractory and
foundry applications and zirconium chemicals.
TITANIUM DIOXIDE
Iluka is a leading producer of synthetic rutile, which is an upgraded, value-added
form of the mineral ilmenite. The company also produces natural rutile.
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.
RARE EARTHS
Iluka has established a significant position in rare earths elements. Rare earths
are among the key building blocks of an electrified economy – essential in a wide
range of applications including high performance permanent magnets in electric
vehicles, wind turbines and other renewable energy technologies.
The strong outlook for these applications is expected to drive growing market
demand for Iluka’s rare earth oxides, particularly neodymium, praseodymium,
dysprosium and terbium.
Other rare earths minerals that will be produced at Iluka’s refinery, such as
lanthanum and cerium, are necessary in the manufacture of catalytic converters
for vehicle emission control of hybrid and petrol-fuelled cars, in modern
rechargeable batteries, and as an alloying agent to create high-strength metals in
aircraft engines.
OTHER
Iluka recovers and markets products produced as part of its processing activities,
including activated carbon, gypsum and iron concentrate.
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ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 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 180.
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 38.
ABOUT THIS
REPORT
This Annual Report is a summary of Iluka Resources’
and its subsidiaries’ operations, activities and
financial position as at 31 December 2023.
Currency is expressed in Australian dollars (AUD)
unless otherwise stated.
This Report includes Iluka’s Sustainability reporting,
in accordance with the Global Reporting Initiative
Framework. 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 LIMITEDANNUAL REPORT 2023 Our locations
UNITED STATES
• Marketing and
distribution
• Rehabilitation
EUROPE
• Marketing and
distribution
ASIA
• Marketing and
distribution
AUSTRALIA
WESTERN AUSTRALIA
• Narngulu processing
• Cataby mining and concentrating
• Eneabba rare earths refinery
development
• Capel synthetic rutile processing
• South West deposits (Tutunup)
• Corporate support centre
• Rehabilitation
SOUTH AUSTRALIA
• Jacinth-Ambrosia mining and
concentrating
• Atacama project
• Rehabilitation
NEW SOUTH WALES
• Balranald project
• Euston project
VICTORIA
• Wimmera project
• Rehabilitation
• Hamilton processing (idle)
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7
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 Our process
EXPLORATION
INDUSTRY
MINERAL SANDS
Iluka’s exploration teams seek
to identify the highest quality
mineral deposits and are a key
component of Iluka’s growth
platform. Consistent with Iluka’s
strategy to continue to grow and
develop the company’s diverse
project pipeline, teams use
innovative practices to explore
greenfield and brownfield
opportunities globally.
Throughout all stages of
project work Iluka ensures
cultural, heritage, community
and environmental impacts are
respectfully considered and
managed.
PROJECT
DEVELOPMENT
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
financial metrics.
DEVELOPMENT
MINING
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.
A prime example is Iluka’s
unmanned, remotely operated
underground mining technology,
which will be deployed at
the company’s Balranald
development.
Iluka has a dedicated
metallurgical test facility,
analytical laboratories, and
an open innovation approach
collaborating with industry
bodies and universities.
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.
EDUCATION
ECONOMIC
Partnerships with researchers
across a number of tertiary
institutions within Australia
and the United States deliver
research-led outcomes aimed at
improving future rehabilitation
outcomes. Iluka also supports
scholarships for students in
industry-related fields and offers
work experience, graduate
programs and apprenticeships
through a series of education
partnerships and programs.
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 community investment
initiatives. The company reports
on its economic contributions
through the Annual Report and
Tax Transparency Report.
A GLOBAL
NETWORK
An extensive marketing and
logistical network enables
Iluka to supply critical minerals
to customers in more than 40
countries. Iluka’s significant
experience working across a
wide range of supply chains
enables marketing and product
development teams to deliver
sustainable pricing and volumes
of market-specific products to
customers. 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.
Iluka is committed to the reliable
delivery of consistent and
high-quality products.
PROGRESSIVE
REHABILITATION
Rehabilitation commences
during the operational phase
of the mine life cycle. This
minimises Iluka’s mining
footprint and assists with
understanding and evaluating
closure risks, including by
informing research and
development programs
as well as 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.
PROCESSING
Heavy mineral concentrate is
transported from Iluka’s mines
to its mineral separation plant(s)
for final product processing.
The plant separates the heavy
minerals zircon, rutile, ilmenite,
monazite and xenotime in
multiple stages using magnetic,
electrostatic and gravity
separation.
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% to 94%.
RARE EARTHS
REFINING
Iluka’s rare earths refinery at
Eneabba will be the first of its
type in Australia and one of few
globally. It will produce light
and heavy separated rare earth
oxides and establish Western
Australia as a strategic hub for
the downstream processing of
rare earth resources.
Iluka is evaluating the economic
and technical viability of
commercial-scale rare earth
metallisation, the next stage
of value addition after the
production of rare earth oxides.
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED
CONTENTS
ABOUT ILUKA RESOURCES
Our products ...................................................................................................................................... 3
Our locations ..................................................................................................................................... 6
Our process ........................................................................................................................................ 8
BUSINESS REVIEW
2023 year in review.......................................................................................................................... 12
Chairman’s and Managing Director’s review ........................................................................ 16
Board of Directors and Committees ....................................................................................... 18
Financial summary .......................................................................................................................... 20
Strategy and business model ..................................................................................................... 24
FINANCIAL AND OPERATIONAL REVIEW
Financial results ................................................................................................................................ 27
Sales and markets ........................................................................................................................... 30
Production and operations .......................................................................................................... 32
Projects .............................................................................................................................................. 40
Exploration .......................................................................................................................................... 44
Sustainability Report ...................................................................................................................... 46
Business risk management ......................................................................................................... 61
FINANCIAL REPORT
Results for announcement to the market .............................................................................. 67
Directors’ Report .............................................................................................................................. 68
Remuneration Report ..................................................................................................................... 78
Auditor’s independence declaration ....................................................................................... 104
Financial statements ...................................................................................................................... 105
Directors’ Declaration .................................................................................................................... 156
Independent auditor’s report ..................................................................................................... 157
PHYSICAL, FINANCIAL AND
CORPORATE INFORMATION
Five year summary .......................................................................................................................... 163
Operating mines data .................................................................................................................... 166
Ore Reserves and Mineral Resources statement .............................................................. 168
Shareholder and investor information .................................................................................... 175
Corporate information ................................................................................................................... 179
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ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 BUSINESS
REVIEW
2023 year in review
$1,238m
Mineral Sands
revenue
47%
Mineral Sands
EBITDA margin
MARKETS AND
OPERATIONS
639kt
Z/R/SR
produced
494kt
Z/R/SR sold
FINANCIALS
SAFETY
OUR PEOPLE
$609m
Underlying group
EBITDA
$225m
Net cash
(as at 31
December 2023)
17%
Reduction
in SPIs
(15 in 2023,
18 in 2022)
65%
Reduction in
TRIFR to 2.4
(6.9 in 2022)
24%
Female
representation
across total
workforce
4.2%
Aboriginal and
Torres Strait
Islander peoples
in total Australian
workforce
(including 19% at
Jacinth-Ambrosia)
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED 2023 timeline
y
y
y
Final investment decision
announced for the Balranald
critical minerals development.
Secondary environmental
approvals work commenced
Detailed Feasibility Study
(DFS) announced for Wimmera
project; $30 million DFS
funding approved
Iluka declares Ore Reserve
for Wimmera project’s
WIM100 deposit
y
y
y
Worley awarded contract
to provide Engineering,
Procurement and Construction
Management (EPCM) services
to the Balranald project and
contracts for fabrication and
supply of mining units
DFS commenced for Tutunup
mineral sands project; $12
million DFS funding approved
Iluka introduces Indigenous
Peoples Policy to strengthen
relationships with host
communities and create
opportunities for Indigenous
employment
y
y
Construction commences
at Balranald; all secondary
environmental approvals
achieved
Pre-Feasibility Study (PFS)
announced for commercial
scale rare earth metallisation
facility; $15 million PFS
funding approved
y
y
y
Iluka finalises agreement with
PWR Hybrid to build 9MW
solar facility to help power
Cataby operations
New mining unit
commissioned at Cataby
to optimise production and
maximise value derived from
Iluka’s processing operations
Iluka recognises more than 25
employees who achieved 30
years of service in 2023
JAN • FEB • MAR
APR • MAY • JUN
JUL • AUG • SEP
OCT • NOV • DEC
Q1
Q2
Q3
Q4
D
E
T
I
M
I
L
S
E
C
R
U
O
S
E
R
A
K
U
L
I
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ANNUAL REPORT 2023
Chairman’s and
Managing Director’s
review
Dear Shareholders,
In 2023 Iluka encountered several external
challenges, like many companies, in the form
of persistent inflation, subdued demand and
geopolitical volatility.
While this inevitably impacted financial performance
relative to recent years, the results we delivered
despite the challenging environment are testament
to the underlying strengths of our business and our
focus on delivering sustainable value.
Over an extended period, your company has
maintained a healthy balance sheet, which provides
us flexibility to adapt to the economic conditions
we are presented with. As demand slowed over the
course of the past year, Iluka pursued a disciplined
approach in the marketplace, prioritising the value
of our products and calibrating production settings
and inventory levels accordingly. Prices remained
relatively strong and stable, mitigating to some
extent the influence of higher costs on our
margins; and we are well placed to respond when
demand recovers.
Geopolitical and industry developments continue
to reinforce the strategic rationale driving Iluka’s
investment pipeline – both our diversification into
rare earths and technical work to unlock Australian
critical mineral resources. 2023 saw growing
emphasis by allied and like-minded governments on
the establishment of sovereign capability and new
supply chains for commodities critical to national
security and the energy transition. This included
myriad legislation, policy initiatives, investment
incentives and international cooperation
agreements that are increasingly relevant to Iluka’s
activities and markets.
The company’s safety performance was a particular
highlight, with a 65% reduction in our total
recordable injury frequency rate (TRIFR) to 2.4 and
a 17% reduction in serious potential incidents (to
15). We rehabilitated 353 hectares of land across
the portfolio; and notably achieved relinquishment
of 252 hectares of rehabilitated land in the United
States. This occurred alongside the appropriate,
measured steps we are taking to reduce carbon
emissions from our operations, such as finalising
an agreement for the construction of a solar facility
that will help power the Cataby mine from 2025.
More broadly, Iluka continues to build momentum in
its approach to climate change. Work over the last
two years to develop a decarbonisation roadmap
has delivered a clear path forward to scope,
evaluate and execute a range of initiatives that have
the potential to reduce emissions, while balancing
both technical and commercial viability. Our work
to develop a sustainable Australian rare earths
business represents Iluka’s primary contribution to
the global energy transition.
Iluka’s titanium feedstock business continued to
benefit from the take-or-pay contracts we have in
place to underpin production from our principal
synthetic rutile asset, SR2. Renewed at the start
of 2023 for a period of four years at approximately
200ktpa, these contracts provide important
revenue certainty and contribute to overall industry
stability. Throughout a lengthy phase of destocking
on the part of Western pigment manufacturers,
Iluka’s customers have demonstrated strong
production discipline and, more recently, have
reported improving sales volumes and inventories
of pigment at minimal levels.
SR2 underwent a planned major maintenance
outage from October, restarting on schedule in
late January 2024. Contracted sales were serviced
from inventory during this time, which coincided
with an operational pause at SR1 (our smaller, swing
production asset, capable of delivering a further
110ktpa). While SR1 is expected to remain offline in
2024, until demand for additional synthetic rutile is
supported by market conditions, Iluka retains the
ability to restart this asset quickly in the event of
industry supply constraints.
In zircon, cautious buying behaviour was driven
by macroeconomic uncertainty and subdued
demand in key markets, especially China, where the
recovery anticipated by many is yet to materialise.
Parallel to Iluka’s focus on pricing for our premium
zircon sand, we achieved increased sales of zircon
in-concentrate, a lower quality, high margin product
suitable for select customers. Higher ore grades
at Jacinth-Ambrosia drove increased production
of heavy mineral concentrate, with this material
processed to finished goods at the Narngulu
mineral separation plant. Stocks of heavy mineral
concentrate remain low.
The development of Iluka’s rare earths business
progressed during the year, including bulk
earthworks, camp construction and front-end
engineering design (FEED) for the Eneabba refinery.
Inflation has affected nearly all major resources
projects in Western Australia in recent times and
Eneabba has not been immune. In December,
the company announced a revised capital range
of $1.5-1.8 billion, with the finalisation of FEED
expected in Q1 2024. Refinery commissioning is
now scheduled for 2026.
As we’ve conveyed previously, the Eneabba refinery
is the first facility of its type in Australia and one of
very few outside China. It is an infrastructure asset
of global significance; being developed in strategic
partnership with the Australian Government, and
holds the prospect of furnishing considerable value
for Iluka over the long term. Realising that value and
longevity for our shareholders and stakeholders
more broadly is the company’s priority. Project
delivery, market development and operational
readiness are the primary means through which
we will achieve this, as well as further maturing
feedstock options that will sustain the refinery
beyond the life of our unique rare earths stockpile.
Market development initiatives span a focus on
both the products we will produce and how those
products will be priced. In August, Iluka announced
the commencement of a feasibility study for
metallisation – the next stage of value addition after
the production of rare earth oxides. If developed, a
commercial scale metallisation facility in a Western
jurisdiction would remove the need for customers to
process oxides through third party tolling facilities,
as is often the case today. This capability would
broaden Iluka’s potential customer base and further
enhance our value as a sustainable producer of
light and heavy rare earths with traceable product
provenance.
Achieving recognition of that provenance is central
to our offtake strategy; and Iluka is working to
promote reliability and transparency in establishing
new supply chains and pricing approaches
independent of traditional indices, such as the
Asian Metals Index.
Headway on other major projects included Balranald
in New South Wales, which is currently under
construction and where the company will deploy
its novel, remotely-operated underground mining
technology at commercial scale for the first time. At
Wimmera in Western Victoria, Iluka is undertaking
a definitive feasibility study (DFS) and has declared
an Ore Reserve for the project’s rare earth minerals.
Work to address technical challenges associated
with Wimmera’s zircon continues. The potential
development at Tutunup in Western Australia was
gated to DFS in May as an important future source
of ilmenite for our synthetic rutile operations. Earlier
stage studies on the Euston and Atacama projects
were also progressed.
This pipeline is vital to Iluka’s future and
underscores the mutually reinforcing nature of
the company’s mineral sands and rare earths
businesses. To varying degrees, each of our mining
developments will contribute feedstock to the
Eneabba refinery, promoting the longevity of that
asset, while simultaneously benefitting from the
value uplift associated with their rare earth minerals
being refined in Australia.
Thank you for your ongoing support and interest.
Rob Cole
Chairman
Tom O’Leary
Managing Director and CEO
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ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 Board of Directors
and Committees
ROB COLE
LLB (Hons), BSc
Chairman
Independent
Non-Executive
Director
Joined Iluka 2018
Perenti, GLX Group,
Synergy, Southern
Ports, Woodside
Petroleum, King &
Wood Mallesons,
Landgate, Curtin
University, Perth
Airport, Beach Energy
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, Clontarf
Foundation, Edith
Cowan University
LYNNE SAINT
BCom, GradDip
Ed Studies, FCPA,
FAICD, Cert Business
Administration
Independent
Non-Executive
Director
Joined Iluka 2019
Bechtel Group, Fluor
Daniel, Placer Dome,
NuFarm, Ventia
Services
SUSIE
CORLETT
BSc (Geo, Hons),
FAusIMM, GAICD
Independent
Non-Executive
Director
Joined Iluka 2019
Aurelia Metals, The
Foundation for
National Parks &
Wildlife, Standard
Bank, Macquarie Bank,
Pacific Road Capital
Management, Mineral
Resources Limited
COMMITTEES
The Board of Directors comprises five
non-executive Directors and one executive
Director (the Managing Director).
Audit and Risk Committee
CHAIR – LYNNE SAINT
Sustainability Committee
CHAIR – MARCELO BASTOS
People and Performance
Committee
CHAIR – ANDREA SUTTON
Nominations and
Governance Committee
CHAIR – ROB COLE
MARCELO
BASTOS
BEng Mechanical (Hons,
UFMG), MBA (FDC-MG),
MAICD
Independent
Non-Executive
Director
Joined Iluka 2014
Vale, BHP, MMG, Aurizon
Holdings, Golder
Associates, Golding
Contractors, Angelo
American, Oz Minerals
ANDREA
SUTTON
BEng Chemical (Hons),
GradDipEcon, GAICD
Independent
Non-Executive
Director
Joined Iluka 2021
Rio Tinto, Energy
Resources Australia,
Infrastructure WA,
ANSTO, National
Association of Women
in Operations, Red 5
Limited, DDH1 Limited,
Perenti, Australian
Naval Infrastructure,
Water Corporation
EXECUTIVE
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; leadership of
required culture and behaviours; and
succession planning.
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
ADELE
STRATTON
BA (Hons), FCA, GAICD
Chief Financial
Officer and Head
of Development
Joined Iluka 2011
KPMG, Rio Tinto Iron
Ore
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
COLIN NEXHIP
PhD Chemical
Engineering, BSc
(Hons), BEd
Chief Technology
Officer
Joined Iluka 2023
Newmont Corporation,
MP Materials, Rio Tinto,
CSIRO
DANIEL
MCGRATH
BSc (Math)
Head of Rare
Earths
Joined Iluka 1993
SHANE TILKA
BCom
General Manager,
Australian
Operations
Joined Iluka 2004
KERRIE
MATTHEWS
BAppSc, Grad
CertRiskMgmt, GAICD
Project Director,
Eneabba Project
(Parental Leave)
Joined Iluka 2022
BHP, Maca Ltd,
Rio Tinto
CRAIG RENNER
BEng (Chem) (Hons),
MBA
Acting Project
Director, Eneabba
Project
Joined Iluka 2020
BHP, BlueScope, Boston
Consulting Group
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED Financial summary
MINERAL SANDS
UNDERLYING MINERAL
UNDERLYING
REVENUE
$1,238m
1 , 4 3 2 . 7 0
1 , 2 5 3 . 1 0
SANDS EBITDA
$582m
8 4 9 . 4 0
NPAT
$343m
FREE CASH
FLOW
$(160m)
NET CASH
(DEBT)
$225m
ROE AND ROC
ROE 17%
ROC 42%
4 8 8 . 6
3 . 1
2 . 8
1 , 2 3 8 . 3 0
9 3 5 . 4 0
5 8 1 . 8 0
6 3 3 . 9 0
7 2 3 . 9 0
5 3 0 . 9 0
3 4 2 . 0 0
2 , 4 1 0 . 0 0
4 4 4 . 3 0
2 9 9 . 5 0
2 9 4 . 8
2 2 5 . 4
1 3 9 . 7 0
5 8 8 . 5 0
3 4 2 . 6 0
3 6 5 . 9 0
- 2 9 9 . 7 0
- 1 5 9 . 6 0
3 6 . 3
5 0 . 2
4 3 . 3
0 . 9
0 . 3
0 .7
0 . 3
0 . 4
0 . 2
0 . 1
- 0 . 3
2 0 2 3
2 0 2 2
2 0 2 1
2 0 2 0
2 0 1 9
2 0 2 3
2 0 2 2
2 0 2 1
2 0 2 0
2 0 1 9
2 0 2 3
2 0 2 2
2 0 2 1
2 0 2 0
2 0 1 9
2 0 2 3
2 0 2 2
2 0 2 1
2 0 2 0
2 0 1 9
2 0 2 3
2 0 2 2
2 0 2 1
2 0 2 0
2 0 1 9
2 0 2 3
2 0 2 2
2 0 2 1
2 0 2 0
2 0 1 9
R O E
R O C
Note: 2019-2021 results include Sierra Rutile Limited, which was demerged from the Group in August 2022.
MINERAL SANDS REVENUE
FREE CASH FLOW
Iluka’s mineral sands revenue from current operations in 2023 was $1,238 million.
Zircon sales of 235 thousand tonnes, including 87 thousand tonnes of zircon-in-concentrate, were made
during the year. Despite subdued market conditions, including softness in the Chinese real estate sector
and general economic weakness in Europe, Iluka continued to focus on delivering sustainable value, with the
company’s full year weighted average zircon premium and standard price up 6% on 2022.
Full year synthetic rutile sales volumes of 211 thousand tonnes were 14% lower in 2023 driven by lower
pigment demand. Iluka has in place ‘take or pay’ offtake contracts for approximately 200 thousand tonnes
of synthetic rutile per year over a four-year period from 2023 through to 2026, which provides a degree of
revenue certainty. Rutile sales of 48 thousand tonnes were largely in line with production in the year.
UNDERLYING MINERAL SANDS EBITDA
Underlying mineral sands EBITDA was $582 million. This reflects lower sales volumes, though prices
remained steady across the product suite supporting healthy but reduced mineral sands EBITDA margins of
47% (2022: 55%).
NET PROFIT AFTER TAX
Iluka reported NPAT of $343 million. NPAT included an earnings contribution of $27 million from Iluka’s 20%
interest in Deterra Royalties.
The company generated operating cash flow of $347 million in 2023, despite building Z/R/SR finished goods
inventory by 145 thousand tonnes during the year. Iluka remains focused on delivering sustainable value and
demonstrating supply discipline during periods of subdued market conditions is important to delivering on
that objective. Iluka idled synthetic rutile production from SR1 kiln in October 2023 in response to the weaker
market conditions experienced in H2 2023.
Iluka’s 20% stake in Deterra Royalties generated $31 million of cash flow, which was subsequently fully
distributed to Iluka’s shareholders in accordance with Iluka’s Dividend Framework.
Capital expenditure was $281 million. This included ~$120 million spent on the Eneabba rare earths refinery
and ~$40 million on Balranald; ~$25 million was spent on feasibility studies including Wimmera, Euston, South
West, and Atacama deposits; $19 million on Cataby mining unit improvements; $24 million on the SR2 major
maintenance work; and the remainder on sustaining capital expenditure. During 2023, $5 million was spent on
advancing critical growth studies and research, including Wimmera and other rare earths and mineral sands
opportunities that do not yet qualify as capital expenditure and are captured within operating cash flows.
Total tax payments of $256 million include $127 million for 2022 final tax payments, paid in the first half of
2023. Iluka expects to make tax payments of $40 million in 2024, which relate to the 2023 financial results.
As a result of the capital investment and increasing working capital on the balance sheet, the company had a
free cash outflow of $160 million during 2023. Iluka generated a free cash inflow of $444 million in 2022.
NET CASH (DEBT)
As at 31 December 2023, Iluka reported a net cash position of $225 million, down from $489 million net cash
as at 31 December 2022. Excluding the Eneabba rare earths refinery non-recourse loan, Iluka’s mineral sands
net cash position was $308 million.
ROE AND ROC
Iluka reported return on equity of 17% and return on capital of 42%, reflecting positive operational
performance in the year despite subdued markets and lower sales volume.
20
21
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED DEBT FACILITIES MATURITY PROFILE
DIVIDEND FRAMEWORK
1,250
Iluka’s 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.
During the year, Iluka paid a fully franked interim dividend of three cents per share and has declared a full year
dividend of 4 cents per share, fully franked, for 2023.
570
HEDGING
2 0 2 4
2 0 2 5
2 0 2 6
2 0 2 7
2 0 2 8
2 0 2 9 +
As at 31 December 2023, Iluka had total debt facilities of $1,820 million. This comprised:
• 1,250 million non-recourse loan facility from the Australian Government (administered by Export Finance
Australia) to construct the Eneabba rare earths refinery, with a term of up to 16 years expiring in 2038,
against which $146 million was drawn down at year-end; and
• $570 million Multi Option Facility Agreement (MOFA) of a series of committed five-year unsecured bilateral
revolving facilities with several domestic and foreign institutions. The MOFA is denominated in AUD and
matures in 2027. There were no debt drawings under the MOFA at year end. There was $39 million of the
facility committed for bank guarantees under the facility.
• $130 million dedicated bank guarantee facility, of which $119 million was committed.
The mineral sands business unit had a net cash balance of $308 million and the rare earths business unit had
a net debt position of $83 million, resulting in a Group net cash position of $225 million at 31 December 2023.
Note 15 of Iluka’s Financial Report provides details of the maturity profile and interest rate exposure.
Iluka manages a portion of its foreign exchange risk via a foreign exchange hedging program.
The Group entered into the following hedging contracts in 2023:
• US$335 million in foreign exchange collars consisting of US$335 million of bought AUD call options with
weighted average strike prices of 72.1 cents and US$335 million of sold AUD put options with weighted
average strike prices of 64.0 cents.
In addition, the following hedging contract matured during the year:
• US$329 million in foreign exchange collar contracts consisting of US$329 million of bought AUD call
options with weighted average strike prices of 74.7 cents and US$329 million of sold AUD put options with
weighted average strike prices of 65.3 cents.
Iluka has US$158 million in foreign exchange collar contracts in relation to expected USD revenue from
contracted sales to 31 December 2024 which remain open as at 31 December 2023, which are detailed in
Note 21 of Iluka’s Financial Report.
22
23
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED Strategy and
business model
OUR VALUES
•
Integrity
• Respect
• Courage
• Accountability
• Collaboration
OUR PURPOSE
Iluka’s purpose is to deliver sustainable value. The company aims to achieve this by:
• ensuring 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.
THE ILUKA PLAN
OUR CORE
We are a GLOBAL CRITICAL
MINERALS COMPANY with
expertise in exploration, development,
mining, processing, marketing and
rehabilitation.
OUR VALUES
Act with
INTEGRITY
Demonstrate
RESPECT
Show
COURAGE
Take
ACCOUNTABILITY
COLLABORATE
OUR DIRECTION
– NEAR TERM
DELIVER TO GROW
OUR FUTURE
EXECUTE
our projects
EXCEL
in our core
MATURE
operations
OUR DIRECTION –
LONGER TERM
GROW WHERE WE CAN ADD VALUE
Critical minerals opportunities and
diversification
Iluka commenced the year well placed, with a strong balance sheet position and operations configured at
maximum settings. Against a backdrop of challenging macroeconomic conditions and market instability
across its product suite, Iluka delivered a solid performance in 2023.
The company’s disciplined approach to markets and operations resulted in a net profit after tax of $343
million and operating cash flow of $347 million. Iluka ended the year with a net cash position of $225 million,
reflecting the company’s investment in key growth projects.
2023 saw significant improvements in the company’s safety performance, with a 65% reduction in Iluka’s total
recordable injury frequency rate to 2.4 and a 17% reduction in serious potential incidents (15%). These results
reflect the company’s highest priority to protect the safety, health and wellbeing of its employees.
EXECUTE OUR CORE
Iluka pursues operational excellence to optimise production output sustainably. Underpinned by a strong
balance sheet, operational flexibility enables the company to adjust production settings to preserve the value
of its products in response to variable market conditions.
Iluka continued to pursue value optimisation measures in 2023, with the execution of a new mining unit at
Cataby, expected to deliver operational efficiencies, including an increase in ore processing rates.
While the Jacinth-Ambrosia and Narngulu operations ran at near capacity through 2023, Iluka exercised
a disciplined approach to its synthetic rutile production. In response to subdued demand for high-grade
titanium feedstocks, Iluka paused production at its SR1 kiln in October 2023, following a 10-month swing
production campaign. The operational pause enabled the SR1 workforce to be deployed to support a planned
major maintenance outage at the SR2 kiln, reducing operational costs.
The SR1 restart represented a low-risk, capital efficient opportunity to deliver additional tonnes into a supply
constrained market. Iluka retains the ability to restart this asset quickly, when market conditions warrant. This
demonstrated disciplined operation of a premium swing production asset.
DELIVER TO GROW OUR FUTURE
2023 saw important progress against a number of developments in Iluka’s project pipeline. This includes
options to sustain and grow the business into the future – both through the diversification into rare earths and
technical work to unlock economically challenging mineral sands deposits.
Iluka continued to progress the Eneabba rare earths refinery during the year. Significant progress was made
on the Front End Engineering Design, with a focus on identifying value optimisation and operational efficiency
improvements. In August, Iluka announced the commencement of a feasibility study for metallisation – the
next stage of value addition after the production of rare earth oxides and the essential precursor to the
production of rare earth permanent magnets. Technical development work is underway and expected to be
complete in 2025.
The execution of the Balranald project will see Iluka deploy a novel, internally-developed, underground
mining technology for the first time at commercial scale. This milestone follows several years of technical
development and demonstration work, reflecting Iluka’s commitment to unlocking high-grade resources
previously regarded as uneconomic.
The gating of the Wimmera project to definitive feasibility study and the declaration of an Ore Reserve for
the project’s rare earth minerals marks further important progress in Iluka’s project pipeline. Wimmera is a
potentially significant source of supplementary rare earth feedstock for Iluka’s Eneabba refinery; and could
unlock a multi-decade source of zircon to address increasing depletion of global supply. Work to validate a
zircon processing solution continues to progress.
GROW WHERE WE CAN ADD VALUE
Geopolitical and industry dynamics continue to reinforce the need to establish sovereign capability and
diverse supply chains for commodities critical to the energy transition and national security. In strategic
partnership with the Australian Government, Iluka is catalysing the development of an Australian rare earths
industry and facilitating junior rare earth miners into the market.
Important to the sustainability and longevity of that industry will be the alignment of commercial and policy
objectives. Iluka continued to be an active participant in critical minerals policy dircussions with governments
during the year.
24
25
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED FINANCIAL
AND
OPERATIONAL
REVIEW
In this section:
• Financial results
• Sales and markets
• Production and operations
• Projects
• Exploration
• Sustainability report
• Business risk management
Financial results
INCOME STATEMENT ANALYSIS
$ MILLION
Z/R/SR revenue
Ilmenite and other revenue
Mineral sands revenue
Cash costs of production
By-product costs
Inventory movement - cash
Idle capacity, restructure, and other non-production
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
Share of profit in associate
Underlying Group EBITDA
Depreciation and amortisation
Inventory movement - non-cash
Rehabilitation costs for closed sites
Revaluation on investments
Group EBIT
Net interest and bank charges
Rehabilitation unwind and other finance costs
Profit before tax - continuing
Tax expense
Profit after tax - continuing
Profit after tax from discontinued operations
Profit for the period (NPAT)
Average AUD/USD rate for the
period (cents)
FULL YEAR
FULL YEAR
2022
% CHANGE
2023
1,143.2
95.1
1,416.3
107.5
1,238.3
1,523.8
(605.2)
(508.3)
(11.2)
173.6
(20.1)
(47.1)
(27.4)
23.9
(61.2)
(79.7)
(2.1)
581.8
27.3
609.1
(167.8)
51.7
4.3
(5.0)
(12.7)
29.1
(12.5)
(47.2)
(29.0)
0.9
(49.1)
(61.4)
15.8
849.4
29.6
879.0
(144.6)
9.9
(11.1)
-
492.3
733.4
12.3
(33.1)
471.5
(128.9)
342.6
-
342.6
3.1
(6.3)
730.2
(212.8)
517.3
71.2
588.5
(19.3)
(11.5)
(18.7)
(19.1)
11.8
496.6
(60.8)
0.2
5.5
2,555.6
(24.6)
(29.8)
n/a
(31.5)
(7.8)
(30.7)
(16.0)
422.2
n/a
n/a
(32.9)
296.8
(425.4)
(35.4)
39.4
(33.8)
n/a
(41.8)
66.5
69.5
(2.7)
26
27
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 MOVEMENT IN UNDERLYING NPAT
$ MILLION
NPAT
Non-recurring adjustments:
Rehabilitation for closed sites - Total (post tax)
Revaluation of Northern Minerals
FULL YEAR
FULL YEAR
2023
342.6
(4.3)
5.0
2022
588.5
11.1
-
% CHANGE
(41.8)
n/a
n/a
Underlying NPAT
343.3
599.6
(42.7)
8
600
$m
700
600
500
400
300
200
100
0
(178)
(20)
50
(2)
9
84
(86)
(12)
(2)
(18)
(18)
(71)
343
e
c
i
r
P
e
m
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l
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V
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i
M
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F
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D
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G
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o
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s
i
D
Sales commentary is contained on pages 30-31.
Exchange rate variances relate to AUD:USD translation of sales, which are predominantly sold in USD
currency. The Australian dollar was highly volatile during the year, with a range from 71.5 cents to 62.9 cents.
On average, the exchange rate was 66.5 cents for 2023, which benefitted the Group’s Australian dollar
revenue compared to the average 2022 exchange rate of 69.5 cents. The Group hedges a portion of its USD
sales to assist in managing exchange rate exposure, which is detailed on page 23 of this report.
Cash costs of production increased by 19%, led by a combination of higher production following the
restart of SR1 in December 2022, higher ore mined and overburden movements, combined with persistent
global inflation impacting labour, consumables, and fuel at operations.
Unit cost of goods sold increased to $1,040 per tonne compared to $968 per tonne in 2022. This
predominantly reflected inflationary pressure on production costs, as well as higher mining costs at Cataby
due to increased overburden movement and higher maintenance costs across the operations.
Idle, restructure, disposals, and other amounts included a $27 million gain on the sale of US fixed
assets to Atlantic Strategic Minerals. This was offset by increased idle costs and depreciation for the SR1 and
SR2 kilns. In Q4, Iluka commenced a planned pause to production at SR1 kiln to assist the company to manage
production and continue to optimise value for shareholders. The production pause coincided with a planned
major maintenance outage at SR2 kiln, which enabled Iluka to leverage the expertise of its SR1 workforce to
conduct SR2 maintenance. This strategic scheduling reduced external costs by some $4 million.
Corporate cost reflects expenses to operate, govern and grow the business. Increased costs were
primarily driven by the impacts of increased head count to support the major growth projects, combined with
inflation on labour costs.
Major projects, exploration, and innovation costs increased as Iluka finished establishing the
teams to advance growth projects as well as IT and innovation initiatives, such as climate change, rare earths,
and mineral sands extraction.
Tax expense had an effective tax rate of 27% in 2023. 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, as well as recognition of prior year losses in the US. The
tax rate applicable in Australia remained at 30%.
Rehabilitation unwind costs increased due to the higher discount rates in 2023 compared to the prior
year as bond yields increased on rate tightening to combat inflation.
28
29
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
Sales and markets
Global macroeconomic uncertainty persisted in 2023 and, while there were pockets of optimism and strong
activity, the zircon and titanium dioxide markets experienced softer demand overall. Downstream customers
were unwilling to hold or build inventory of zircon and titanium dioxide products.
Iluka continued to prioritise the value of its high-grade products, with prices remaining resilient, and practiced
production discipline.
ZIRCON
Iluka’s total zircon sales of 235 thousand tonnes for the year were down 37% from 2022. Sales included 87
thousand tonnes of zircon-in-concentrate.
In China, the expected recovery in housing demand did not materialise, with ongoing softness in the
real estate market throughout the year impacting the ceramic market. A slowdown in industrial activity
contributed to uncertainty in other zircon segments. Although the Chinese Government eased pandemic
restrictions and lowered interest rates to support the domestic economy, the recovery was muted. The
weakness in the Chinese property market continued throughout the year, providing headwinds for the global
zircon market.
In Europe, an initial uptick in production activity in early 2023 and stable demand slowed with the advent of
the traditionally slower summer period. Conditions remained subdued through to year end.
The Indian real estate sector grew strongly throughout the year, recovering from setbacks experienced
during the pandemic. This helped spur production of tiles and foundry products with the ceramic industry
continuing to outperform this year in spite of a production hiatus caused by Cyclone Biparjoy mid-year. This
market continues to be a key growth prospect for zircon sales with a strong outlook for the ceramics sector.
Elsewhere in Asia, factory activity started to contract mid-year off the back of China’s subdued recovery, with
softer demand continuing into the second half of the year reflecting weak export markets.
Demand remained stable in the United States as construction spending and manufacturing activity grew
during the year. However, the broader macroeconomic uncertainty impacted confidence, with customers of
zircon and zircon-based products unwilling to hold or build inventory.
Iluka continued to balance sustainable pricing for customers with shareholder value in 2023. The company’s
weighted average price for zircon sand in 2023 was US$2,066 per tonne.
HIGH-GRADE TITANIUM FEEDSTOCKS
Iluka’s total sales of high-grade titanium feedstocks totalled 260 thousand tonnes, down ~14% from 2022.
This included total rutile sales of 48 thousand tonnes and total synthetic rutile sales of 211 thousand tonnes.
Conditions in 2023 were mixed, with the softness that emerged in H2 2022 for titanium dioxide pigment
continuing while demand was consistent from the welding and strong from titanium metal segments.
The subdued demand for paint and pigment in 2023 followed a two-year period of elevated levels of
do-it-yourself projects and home building in North America and Europe. Despite lower levels of demand in
2023, pigment prices remained resilient in North America as pigment producers reduced operating rates to
meet demand. In China, three consecutive pigment price rises were announced in the second half of the year,
with inflation pushing producers to seek higher prices in a bid to offset rising input costs. Chlorine prices
started the year at historically high levels, supporting demand for Iluka’s high-grade products of rutile and
synthetic rutile as these products minimise chlorine consumption. Chloride pigment capacity continued to
grow in China during the year and production at idled chloride plants in Europe restarted in the September
quarter, albeit operating at below seasonal norms.
Demand for rutile from the welding market continued throughout the year amid ongoing global investment
in infrastructure, particularly in India. The titanium metal segment performed strongly and many producers
operated at maximum settings to meet growing demand from the aviation industry amid restricted supply
from Russia.
With overall demand subdued, Iluka took steps to optimise the value of its high-grade products and continue
its deliberate approach to reinforcing positive supply-side fundamentals. In Q4, Iluka commenced a planned
pause to production at SR1 kiln to assist the company to manage production and continue to optimise value
for shareholders.
The production pause coincided with a planned major maintenance outage at SR2 kiln, which enabled Iluka
to leverage the expertise of its SR1 workforce to conduct SR2 maintenance. This reduced external costs by
some $4 million.
Iluka’s average rutile and synthetic rutile prices over the year were US$1,887 and US$1,258 per tonne
respectively.
30
31
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
Production and
operations
Iluka’s mining and processing operations are located in South Australia and Western Australia. The company
is focused on operating in a safe and sustainable manner and strives to optimise production volumes in line
with market demand, while also delivering operational efficiency improvements.
Iluka’s Australian-based operations delivered a solid performance in 2023, producing 327 thousand tonnes of
zircon, 53 thousand tonnes of rutile, and 260 thousand tonnes of synthetic rutile.
The Cataby mine in Western Australia produced 552 thousand tonnes of heavy mineral concentrate.
Iluka executed the upgrade of two mining units at Cataby, with one of the new mining units installed and
commissioned in the month of December, with the second additional mining unit due for delivery in Q1 2024.
These units are expected to increase ore processing rates and deliver an associated increase in material fed
to Cataby’s wet concentrator plant.
Mining and concentrating at Jacinth-Ambrosia in South Australia continued throughout the year. The
operation produced a total of 346 thousand tonnes of heavy mineral concentrate. The planned mine move to
the Ambrosia deposit in Q3 2022 resulted in higher volumes of heavy mineral concentrate during 2023 due to
the higher mined ore grade.
The Narngulu mineral separation plant in Western Australia processed 909 thousand tonnes of heavy mineral
concentrate from Cataby and Jacinth-Ambrosia.
The synthetic rutile kilns – SR1 and SR2 – in Capel delivered 260 thousand tonnes of production in 2023.
SR2 underwent its planned major maintenance outage from Q4 2023 and restarted production in late
January 2024. The major maintenance outages are required approximately every four years to reline the kiln
refractory. SR1 production was idled in October 2023 in response to weaker market conditions, in line with the
operating rationale for this asset as a swing producer in the high-grade feedstock market.
ZIRCON
RUTILE
Production volumes (kt)
Production volumes (kt)
327.0
324.2
322.1
298.7
185.2
196.6
184.1
172.6
52.7 55.1
SYNTHETIC RUTILE
ILMENITE
Production volumes (kt)
Production volumes (kt)
259.5
237.6
227.4
198.7
196.2
591.4
563.7
460.6
455.9
318.6
2 0 2 3 2 0 2 2 2 0 2 1 2 0 2 0 2 0 1 9
2 0 2 3 2 0 2 2 2 0 2 1 2 0 2 0 2 0 1 9
CASH COSTS
Cash costs of production
Unit cash production cost per tonne Z/R/SR produced
Unit cost of goods sold per tonne Z/R/SR sold
$m
$/t
$/t
Jacinth-Ambrosia / Mid West
Cataby / South West
Total
MINERAL SANDS
OPERATIONS RESULTS
2023
2022 % CHANGE
605.2
947
857
1,185
1,040
508.3
860
915
1,041
964
(19.1)
(10.1)
6.3
(13.8)
(7.9)
$ MILLION
2023
2022
2023
2022
2023
2022
REVENUE
EBITDA
EBIT
Jacinth-Ambrosia / Mid West
Cataby / South West
Rare earths
US/MB
Support and corporate
Elimination - interco sales
611.8
626.5
-
-
-
-
778.9
753.4
-
0.4
-
(0.2)
408.7
314.4
-
13.0
512.4
446.4
-
(7.7)
381.0
236.6
-
9.7
(154.3)
(101.5)
(135.0)
465.9
360.2
-
(18.0)
(74.7)
2 0 2 3 2 0 2 2 2 0 2 1 2 0 2 0 2 0 1 9
2 0 2 3 2 0 2 2 2 0 2 1 2 0 2 0 2 0 1 9
Total
1,238.3
1,523.8
581.8
849.4
492.3
733.4
Note: 2019-2021 volumes include Sierra Rutile Limited, which was demerged from the Group in August 2022.
32
33
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED
JACINTH-AMBROSIA/MID WEST
CATABY/SOUTH WEST
PRODUCTION VOLUMES
2023
2022 % CHANGE
PRODUCTION VOLUMES
2023
2022 % CHANGE
Zircon
Rutile
Synthetic rutile
Total Z/R/SR production
Ilmenite
Total production volume
HMC Produced
HMC Processed
Unit cash cost of production - zircon/rutile/SR
kt
kt
kt
kt
kt
kt
kt
$/t
276.8
21.1
-
243.7
20.7
-
297.9
264.4
99.0
137.1
396.9
401.5
346
450
716
351
458
727
13.6
1.9
n/a
12.7
(27.8)
(1.1)
(1.6)
(1.7)
(1.5)
Zircon
Rutile
Synthetic rutile
Total Z/R/SR production
Ilmenite
Total production volume
HMC Produced
HMC Processed
Unit cash cost of production - zircon/rutile/SR
kt
kt
kt
kt
kt
kt
kt
kt
$/t
50.2
31.6
259.5
55.0
34.4
237.6
341.3
327.0
361.7
419.0
703.0
746.0
552
459
1,124
501
566
985
(8.7)
(8.1)
9.2
4.4
(13.7)
(5.8)
10.2
(18.9)
14.1
Mineral Sands revenue
$m
611.8
778.9
(21.5)
Mineral Sands revenue
$m
626.5
753.4
(16.8)
Cash costs of production
By-product costs
Inventory movements - cash costs of production
Restructure and idle capacity charges
Government royalties
Marketing and selling costs
Net impairment
Asset sales and other income
EBITDA
Depreciation and amortisation
Inventory movement - non-cash
Rehabilitation costs for closed sites
EBIT
Total scope 1 and scope 2 emissions
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
kt
(213.4)
(192.2)
(11.0)
Cash costs of production
(1.2)
50.7
(1.0)
(31.8)
(6.6)
-
0.2
(9.8)
(22.8)
(2.2)
(28.9)
(10.6)
0.1
(0.1)
87.8
n/a
54.5
(10.0)
37.7
n/a
n/a
By-product costs
Inventory movements - cash costs of production
Restructure and idle capacity charges
Government royalties
Marketing and selling costs
Asset sales and other income
EBITDA
408.7
512.4
(20.2)
Depreciation and amortisation
(52.2)
(49.3)
16.6
7.9
(0.2)
3.0
(5.9)
n/a
163.3
Inventory movement - non-cash
Rehabilitation costs for closed sites
EBIT
381.0
465.9
(18.2)
Total scope 1 and scope 2 emissions
87.5
88.2
0.9
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
kt
(383.7)
(322.1)
(11.5)
113.9
(8.8)
(14.4)
(7.5)
(0.1)
(6.5)
47.5
(3.1)
(16.5)
(6.7)
0.4
(19.1)
(76.9)
139.8
(183.9)
12.7
(11.9)
n/a
314.4
446.4
(29.6)
(111.7)
35.1
(1.2)
(91.4)
10.1
(4.9)
236.6
360.2
451.6
400.5
(22.2)
247.5
75.5
(34.3)
(12.6)
The Narngulu mineral separation plant continued to run near capacity through 2023 with zircon and rutile
production higher than the comparative period as favourable zircon assemblage in the Jacinth North deposit
benefitted final product separation, though less ilmenite was recovered.
Mineral sands revenue decreased by 21% to $612 million ($779 million in 2022) as sales volumes were
pressured by lower demand in key markets, though zircon prices increased 6%, maintaining margin.
Cash costs of production were 11% higher as inflation pressure on fuel, consumables, and labour
costs impacted mining and concentration costs, as well as higher planned regular maintenance costs than
the prior year.
Inventory movement reflects a build of both work in progress and finished goods inventories to $289
million at 31 December 2023, reflecting both higher inventory levels and higher unit costs.
Rehabilitation costs for closed sites were favourably impacted by scope changes to rehabilitation
works at Eneabba and Narngulu.
Marketing and selling costs were 38% lower on reduced sales volumes as well as more favourable
shipping costs through 2023.
Government royalties rose to $32 million as HMC shipped from site increased with high zircon
assemblage in Ambrosia HMC combined with 6% stronger zircon prices.
The main synthetic rutile kiln, SR2, operated for 10 months of 2023 before closing for a planned major
maintenance event, which occurs every four years, with the kiln back online in February 2024.
The smaller kiln, SR1, restarted production in December 2022 after being placed on care and maintenance
back in 2009. The restart represented a low capital expenditure, low risk opportunity to produce an additional
110 thousand tonnes per annum of synthetic rutile, in light of industry supply constraints. The asset was
always intended to be ‘swing’ production, only operating to meet market needs. Production was paused from
SR1 in October 2023 and will remain offline until market conditions warrant.
Total synthetic rutile production in 2023 was 260 thousand tonnes.
Cataby mine produced 487 thousand tonnes of HMC.
Mineral sands revenue decreased by 17% driven by decreased demand for high-grade titanium
feedstocks, though ‘take or pay’ contracts for synthetic rutile maintained a stable sales channel for the
product in 2023.
Cash costs of production increased to $384 million reflecting both the higher synthetic rutile
production in the year and also higher costs for contract mining labour, consumables, and fuel.
Higher production and lower sales volume of synthetic rutile impacted inventory movement as
stockpiles of Z/R/SR finished product increased to $212 million at 31 December 2023.
34
35
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED The idling of both kilns for November and December of 2023 to focus on the SR2 maintenance outage
resulted in an increase in restructure and idle capacity charges.
Lower government royalties were driven by lower sales revenue.
Depreciation and amortisation charges increased as a result of the restart of SR1 synthetic rutile
kiln (~$11 million), combined with increased asset carrying values, mainly associated with rehabilitation and
restoration requirements.
MOVEMENT IN NET (DEBT) CASH
FY 2023 H1 2023 H2 2023 FY 2022 H1 2022 H2 2022
Opening net cash
488.7
488.7
342.9
295.0
295.0
600.3
Operating cash flow
346.7
227.6
119.1
711.2
481.0
230.2
UNITED STATES/MURRAY BASIN
Discontinued and idle operations reflect rehabilitation obligations in the United States (Florida and Virginia)
and certain idle assets in Australia (Murray Basin). Iluka completed the sale of some US idle plant and the
associated rehabilitation obligations to Atlantic Strategic Minerals in 2023.
Cash costs of production were largely driven by activities associated with product transportation and
processing costs for Murray Basin inventory transfers to the synthetic rutile kiln.
Exploration
Interest (net)
Tax
(18.8)
17.2
(9.8)
9.0
(9.0)
(10.3)
8.2
4.7
(4.4)
(0.1)
(255.5)
(183.2)
(72.3)
(104.1)
(52.4)
Capital expenditure
(160.7)
(55.4)
(105.3)
(139.5)
Settlement of IFC put option
Investment in Northern Minerals
Principal element of lease payments
(71.4)
(11.5)
-
-
(8.4)
10.1
-
-
(4.3)
0.6
-
-
(4.1)
9.5
(11.5)
(20.0)
(8.8)
(3.9)
(4.9)
-
-
-
(5.9)
4.8
(51.7)
(68.1)
-
(20.0)
2023
2022 % CHANGE
Asset sales
Mineral Sands revenue
Cash costs of production
By-product costs
Inventory movements - cash costs of production
Restructure and idle capacity charges
Government royalties
Marketing and selling costs
Asset sales and other income
EBITDA
Depreciation and amortisation
Rehabilitation costs for closed sites
EBIT
Total scope 1 and scope 2 emissions
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
kt
-
(8.1)
(0.3)
9.0
(10.3)
(0.9)
(0.2)
23.8
8.4
(0.9)
(2.4)
5.1
5.3
0.4
(6.6)
(0.2)
7.2
(7.3)
(1.7)
(0.2)
0.5
(7.9)
(0.8)
(9.3)
(18.0)
13.0
n/a
(22.7)
(50.0)
25.0
(41.1)
47.1
n/a
n/a
n/a
(12.5)
74.2
n/a
34.6
Free cash flow - Mineral Sands
(69.4)
(15.5)
(53.9)
421.7
337.3
84.4
Dividends received - Deterra
30.5
12.7
17.8
Eneabba rare earths - capital expenditure
(120.7)
(52.6)
(68.1)
35.6
(13.1)
12.3
23.3
-
(13.1)
Free cash flow - Group
(159.6)
(55.4)
(104.2)
444.2
349.6
94.6
Dividends
Net cash flow
SRL cash demerged
Exchange revaluation of USD net debt
EFA interest capitalised to refinery
Amortisation of deferred borrowing costs
(97.0)
(84.4)
(12.6)
(146.8)
(47.7)
(99.1)
(256.6)
(139.8)
(116.8)
297.4
301.9
(4.5)
-
(0.6)
(5.3)
(0.9)
-
0.2
(1.8)
(0.4)
-
(105.6)
-
(105.6)
(0.8)
(3.5)
(0.5)
2.3
-
3.8
-
(0.4)
(0.4)
(1.5)
-
-
Increase in net cash/(debt)
(263.3)
(145.8)
(117.5)
193.7
305.3
(111.6)
Closing net cash/(debt)
225.4
342.9
225.4
488.7
600.3
488.7
Note: Movements in net cash in FY22 include cash flows from Sierra Rutile Limited, which was demerged from
the Group in August 2022.
36
37
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED NON-IFRS FINANCIAL INFORMATION
JA/MW C/SW
RE
US/MB EXPL &
OTH
MINERAL
SANDS
CORP GROUP
Mineral sands revenue
611.8
626.5
Freight revenue
31.1
21.6
Expenses
(234.2)
(333.7)
Share of profit in associate
FX
Corporate costs
EBITDA
408.7
314.4
Depreciation and amortisation
(52.2)
(111.7)
Inventory movement - non-cash
16.6
35.1
Rehabilitation for closed sites
7.9
(1.2)
Revaluation on investments
EBIT
381.0
236.6
Net interest costs
(0.4)
(0.8)
Rehab unwind and other finance
costs
(12.5)
(14.2)
Profit before tax
368.1
221.6
Segment result
368.1
221.6
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,238.3
52.7
-
-
1,238.3
52.7
13.0
(13.0)
(567.9)
(59.5)
(627.4)
-
-
-
27.3
27.3
(2.1)
(2.1)
(79.7)
(79.7)
8.4
(8.4)
723.1
(114.0)
609.1
(0.9)
(0.2)
(165.0)
(2.8)
(167.8)
-
(2.4)
-
-
51.7
4.3
-
-
51.7
4.3
(5.0)
(5.0)
5.1
(8.6)
614.1
(121.8)
492.3
(0.1)
-
(1.3)
13.6
12.3
(4.8)
(0.1)
(31.6)
(1.5)
(33.1)
0.2
(8.7)
581.2
(109.7)
471.5
4.8
n/a
594.5
n/a
594.5
2023 Project
Pipeline
ATACAMA
EUSTON
WIMMERA
TUTUNUP
BALRANALD
ENEABBA
JACINTH
AMBROSIA
CAPEL
NARNGULU
CATABY
Resource
Reserve
Processing facilities
38
39
EUCLA BASINMURRAY BASINPERTH BASINSELECTPreliminary Feasibility StudyDetermine what it should beDEVELOPDefinitive Feasibility StudyDetermine what it will beEXECUTEProject executionDeliver the projectPRODUCINGOperate and maximiseGrow and improveANNUAL REPORT 2023ILUKA RESOURCES LIMITED Projects
Iluka 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.
Western Australia
ENEABBA
Iluka is building Australia’s first fully-integrated
refinery for the production of separated rare
earth oxides at Eneabba, Western Australia.
Final products will be separated rare earth
oxides, including neodymium, praseodymium,
dysprosium and terbium.
This is taking place via a strategic partnership
between Iluka and the Australian Government,
including a $1.25 billion non-recourse loan
to Iluka under the Critical Minerals Facility
administered by Export Finance Australia.
Iluka’s Engineering, Procurement and
Construction Management (EPCM)
contractor, Fluor Australia, undertook Front
End Engineering Design (FEED) activities
throughout 2023, with completion scheduled
in early 2024. Iluka and Fluor continue to review
value optimisation measures and operational
efficiency improvements.
Bulk earthworks and ground improvement
activities were completed. Tendering is
underway for detailed earthworks (e.g.
trenching, ponds and tailing storage facilities)
and concrete supply and installation.
Construction of the operational camp is
underway with completion expected in early
2024. Major engineering package procurement
activity is well advanced. Commissioning of the
refinery is scheduled for 2026.
In August 2023, Iluka commenced a
pre-feasibility study to evaluate the economic
and technical viability of a commercial scale
rare earth metallisation facility. Iluka’s Board
approved funding of $15 million to undertake
the study. Metallisation is the next stage in
the rare earth permanent magnet value chain
following the production of rare earth oxides
and is the essential precursor to the production
of permanent magnets.
Iluka’s Eneabba refinery will produce the
separated light and heavy rare earth oxides,
the requisite feedstock for the production
of rare earth metals. If commissioned, the
metallisation facility would be one of few
globally outside of China and Southeast Asia,
enabling Iluka to service a broader range of
downstream rare earth customers. Iluka has
appointed a technology partner to assist with
feasibility work, scheduled for completion in
2025.
New South Wales
BALRANALD
Iluka’s Balranald development is located in the
Riverina district of south western New South
Wales. The project focuses on the rutile-rich
West Balranald deposit, which contains
significant quantities of rutile and zircon, as well
as smaller but material quantities of rare earths.
Owing to its relative depth – located
approximately 60 metres below the surface –
Iluka has invested significantly over more than
a decade to develop a novel remotely-operated
underground mining (UGM) technology to
enable access to the ore body.
In February 2023, the Board approved a final
investment decision to execute the $480
million Balranald development, following
successful demonstration outcomes to prove
technical and commercial viability of the UGM
technology. Since then, Iluka has progressed
engineering and procurement activities; this
includes the appointment of Worley as the
EPCM contractor for the project. Consistent
with Iluka’s disciplined approach to production
throughout its operational and project
portfolio, the company will calibrate Balranald’s
commissioning schedule in line with market
conditions.
Iluka expects Balranald to deliver approximately
250 jobs during construction and a further 250
jobs during operation, including contractors.
The Balranald development enhances
Iluka’s portfolio offering of high-grade,
high-quality critical minerals products
produced in Australia, particularly rutile and
zircon. Rare earth minerals from Balranald
will be transported to Eneabba and serve as
incremental feed for the refinery.
The UGM technology delivers significant
sustainability benefits, including reduced
environmental footprint and carbon intensity,
relative to traditional open cut extraction
techniques. It may have potential application to
other deep mineral sands deposits, including
those nearby the Balranald project. Iluka will
evaluate further development opportunities as
the UGM technology is deployed at Balranald.
40
41
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED Western Australia
TUTUNUP
Tutunup is a mineral sands deposit with
significant ilmenite assemblage, as well as
some zircon and rutile. The ilmenite at Tutunup
is suitable as a feedstock for Iluka’s synthetic
rutile production and may unlock additional
value across Iluka’s portfolio if blended with
other ilmenites with quality constraints.
Tutunup is planned to be developed as a dredge
mining operation. Iluka’s portfolio includes
other deposits in the South West region that
represent potential extensions to the
Tutunup deposit.
In May 2023, Iluka completed a pre-feasibility
study and the Board approved $12 million in
funding for a definitive feasibility study, which
will be finalised in 2025.
New South Wales
EUSTON
Euston is a traditional mineral sands deposit in
south western New South Wales. The deposit
has significant zircon, rutile and ilmenite
assemblage. The ilmenite may be a suitable
feedstock for Iluka’s synthetic
rutile production.
Euston is planned to be developed as an
open cut, dry-mining operation. Preliminary
feasibility study work continued to progress
throughout 2023 and is scheduled for
completion in 2025.
South Australia
ATACAMA
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
and a potential source of zircon and synthetic
rutile kiln feeds.
The project is currently the subject of a
pre-feasibility study.
Victoria
WIMMERA
Located in Western Victoria, the Wimmera
project is a potential multi-decade source
of both zircon and rare earths, including the
heavy rare earths dysprosium and terbium. The
project involves the mining and beneficiation of
the fine-grained WIM100 deposit.
In February 2023, the Board approved the
gating of the Wimmera project to a definitive
feasibility study (DFS) and the declaration of an
Ore Reserve. This marked important progress,
with $30 million approved in DFS funding.
The declaration was based on the value of the
refined rare earth minerals and made possible
as a result of Iluka’s parallel development of the
Eneabba refinery. It is planned that Wimmera’s
rare earths will be transported to Eneabba to be
refined into separated rare earth oxides.
Iluka continues to work to resolve technical
challenges associated with Wimmera’s zircon,
specifically the higher levels of impurities in
the zircon crystal – a characteristic shared by
deposits throughout the Wimmera region.
Throughout 2023, Iluka continued pilot
scale testing and planning for commercial
scale testing via a demonstration plant to be
constructed at Narngulu, in Western Australia.
This will be progressed alongside the DFS for
the Wimmera project. As zircon revenue has
not been accounted for in Wimmera’s Ore
Reserve estimation at this stage, it represents
potentially substantial future upside to the
development’s economics.
Technical studies to inform the Environmental
Effects Statement and subsequent regulatory
approvals are progressing alongside process
engineering and mine design. Wimmera’s DFS
is expected to be completed by Q4 2025.
42
43
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED
Exploration
Iluka’s exploration portfolio is managed through a structured process that considers a range of technical
and economic factors. 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 focuses on identifying high-quality mineralisation that can deliver a new operation and
longer-term growth.
Please refer to the Ore Reserves and Mineral Resources Statement on page 169.
GENERATION AND EXTERNAL OPPORTUNITIES
Iluka identifies opportunities within Australian and North American jurisdictions to complement and enhance
the company’s existing project pipeline. Iluka continues to focus on traditional mineral sands prospects while
also expanding into rare earth exploration search spaces.
AUSTRALIA
In Australia, activity primarily centred around increasing geological definition of mineral resources associated
with operations and feasibility studies in South Australia, Victoria, New South Wales and Western Australia.
Regional exploration was also completed in Queensland as part of the Hughenden greenfields project. Across
Australia, a total of 1,774 holes for 71,790 metres were drilled.
In South Australia, drilling to improve resource definition was completed at Atacama, the geological and
metallurgical assessment programs aligned to the project’s preliminary feasibility study. A total of 544 holes
for 27,341 metres were completed during the year. At Ambrosia, drilling was completed to support mine
optimisation studies, with a total of 207 holes for 5,986 metres drilled.
Drilling and sampling activities were carried out across the five deposits that comprise the Euston project
in New South Wales. In support of the preliminary feasibility study, 536 holes for a total of 21,553 metres
were drilled.
Drilling and sampling activities were also carried out in support of the feasibility studies at Wimmera in
Victoria, Tutunup in Western Australia, and Balranald in New South Wales.
At the Cataby operations in Western Australia, drilling was undertaken as part of normal life of mine and
future-pit definition activities. A total of 175 holes were completed for 7,095 metres.
Regional exploration drilling was completed at the Hughenden greenfield exploration project. The program
was designed to advance the geological understanding of the area to assess regional prospectivity and
suitability to host critical minerals deposits. The next steps for Hughenden will be determined when all assays
are returned. Site reconnaissance visits were also completed to other regional exploration areas to improve
geological understanding ahead of planned field work in 2024.
UNITED STATES
In the United States, exploration activity focused on drill testing targets within the Atlantic basin and the
development of new, untested search spaces to be targeted for drilling in 2024. Additional focus was placed
on assessing rare earths opportunities across North America. In total 6,422 metres in 249 holes were drilled.
Operations and
Project Support
$4.3M
44
RARE EARTH EXPLORATION
As part of Iluka’s diversification into rare earths, the company continued to review potential exploration
targets within Australia and the United States. This included both internal and external opportunities hosted
within all types of geological settings. Four new tenement applications were submitted in Australia, with a
view to securing rights to explore for rare earth elements. Iluka will continue to assess opportunities when
they arise.
GRANTED TENEMENT POSITION
TENEMENT APPLICATIONS
AS AT 31 DECEMBER 2023
AS AT 31 DECEMBER 2023
REGION
APPROX. SQUARE
KILOMETRES
REGION
APPROX. SQUARE
KILOMETRES
Eucla Basin, (SA & WA)
25,841
Eucla Basin (SA & WA)
Murray Basin (NSW & VIC)
4,388
Murray Basin (NSW & VIC)
Perth Basin (WA)
2,325
Perth Basin (WA)
Other - Australia (QLD)
3,335
Gippsland (VIC)
Other - International
0
Other - Australia
(QLD, WA & NT)
Total
35,889
Other - International
Total
0
0
509
940
4,474
2,139
8,062
EXPLORATION AND GEOLOGY EXPENDITURE 2023
International exploration
$0.1M
Administration and others
$0.2M
U.S and Canada
$4.8M
A d ministratio n & others
Opportunity ID
$0.9M
O p erations an d Project Sup p ort
Australian exploration
$4.8M
45
Total
$15.2M
A ustralian Exploratio n
O p portu nity ID
U.S. a n d Canada
Internatio nal Exploratio n
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 Sustainability Report
MESSAGE FROM THE SUSTAINABILITY
COMMITTEE CHAIR
In 2023, Iluka continued to deliver on its strategy to
be a safe, responsible and sustainable supplier of
critical minerals through the dedication and talent
of our people.
Trusted by our people and communities
We value the safety of our employees and
contractors, first and foremost, and I am pleased to
report that Iluka’s total recordable injury frequency
rate reduced by 65% to 2.4 at the end of 2023. We
have also continued to see a trend down in the
serious potential incident frequency rate. During the
Board site visit to the company’s Cataby, Eneabba
and Narngulu operations we completed visible
safety leadership activities with our employees.
We witnessed how our programs, particularly
Critical Control Management, are ensuring that
we prioritise, and assist us in managing, our most
critical safety risks.
Iluka is committed to making a positive difference
for our Indigenous workforce and the communities
local to our operations. The launch of the Iluka
Indigenous Peoples Policy is another step forward
in demonstrating our respect for Indigenous
culture and ensuring we foster a culturally safe and
supportive work environment.
Responsible for our environment
As a company we are proud of our track record of
achieving positive rehabilitation outcomes. Iluka’s
rehabilitation team continually seeks innovative
ways to improve our rehabilitation techniques. This
year, our team at the Jacinth-Ambrosia operation
trialled a new seeding method using sphere drone
technology. The technique achieved a record area
of land rehabilitated in a short period of time and
has the potential to be applied across all of Iluka’s
open areas requiring rehabilitation.
We believe the best opportunity to materially
reduce our emissions in the medium-to-long term is
through the development of the next generation of
synthetic rutile production technology. NewGenSR
is an example of a process technology, utilising
fluid bed technology and hydrogen as a reductant
to replace coal. Iluka has a long history with the
development of NewGenSR, and it is a technology
on which we are refocusing our efforts, given the
potential to significantly reduce our hardest to
abate emissions. I look forward to reporting on the
progress of our further test work to be undertaken
in 2024.
Over the last two years, we have completed a
thorough analysis of potential decarbonisation
opportunities in the short- to medium-term, against
the backdrop of our long-term ambition to achieve
net zero scope 1 and scope 2 emissions where
technology is viable, available, and commercially
feasible. This work underpins the focus of our effort
in 2024. In addition to our work on NewGenSR, we will
increase the proportion of renewable energy sources
at our operations through the construction a solar
farm at our Cataby operation. Evaluation of renewable
energy solutions for our Narngulu operations,
Balranald project, and other operations through
grid-connected solutions and power purchase
agreement will also be undertaken in 2024.
We will undertake test work of alternative fuels that
could be substituted for coal, including tyre derived
fuels, and continue to evaluate the potential for
natural gas to be used as a transition fuel to provide
process heat in our synthetic rutile production.
Evaluation of diesel additives to reduce our overall
diesel use through more efficient fuel burn in
our mobile fleet and broader energy efficiency
initiatives will continue.
Operate in and provide products for
a lower carbon world
Thank you for your interest and I look forward to
keeping you updated on our progress.
Iluka is taking concrete steps to reduce its carbon
footprint. To significantly abate its emissions,
the company needs to find a technically and
commercially feasible solution to reduce the
amount of coal used as a reductant in the
production of synthetic rutile. Like many in our
sector, we must also tackle emissions from diesel
use in our mining operations.
Marcelo Bastos
Chair – Sustainability Committee
SUSTAINABILITY AT ILUKA
Iluka’s goal is to be a safe, responsible and sustainable supplier of critical minerals. To achieve this, Iluka’s
sustainability strategy prioritises three pillars:
• Trusted by our people and communities: To engage and build the capability of Iluka’s workforce,
prioritising health, safety and wellbeing, and embed a consistent and open approach to relationships with
the communities where Iluka operates.
• Responsible for our environment: To be cognisant of the impact of Iluka’s operations on the
environment and maximise the efficiency in how the company operates.
• Operate in and provide products for a lower carbon world: To recognise that the manner
in which Iluka operates and evolves its business can reduce the company’s carbon footprint and provide
opportunities to support the transition to a lower carbon economy.
Iluka’s approach to sustainability is aligned with recognised principles and frameworks, and contributes to
the advancement of the United Nations Sustainable Development Goals. Iluka is committed to integrating
sustainability into everyday business practices and to the continuous improvement of the company’s
sustainability performance.
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.
Governance and assurance
The Iluka Board Sustainability Committee assists the Board in reviewing progress made against the
sustainability strategy. Responsibilities include oversight of performance and compliance with legislation,
and management of health, safety, environmental, social and governance risks and impacts. The Committee
also monitors the effectiveness of company strategies, policies and standards as they relate to sustainability.
This year, KPMG Australia was engaged to provide the Directors of Iluka with assurance on select
sustainability subject matter. KPMG’s limited assurance statement is provided below.
Reporting our performance
This report summarises Iluka’s performance for priority topics determined by the 2023 sustainability
materiality assessment, as outlined in the separate 2023 Sustainability Data Book.
The company’s approach to managing the priority topics, case studies, and the Sustainability Data Book
outlining key performance information for 2023 and historical reporting periods are available at
www.iluka.com.
Iluka reported using guidance from the GRI Standards for the period 1 January 2023 to 31 December 2023.
Refer to the GRI content index in the 2023 Sustainability Data Book.
KPMG independent limited assurance
statement
Scope of Information Subject to Assurance
KPMG was engaged by Iluka Resources to undertake limited assurance over Selected Data Claims and
narrative referencing those data claims presented in Iluka’s Annual Report and Data Book for the year ended
31 December 2023.
KPMG’s limited assurance opinion outlining the information subject to assurance and the procedures
performed is available at www.iluka.com
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED
Trusted by our people and communities
OUR PEOPLE
65% decrease in TRIFR to 2.4 (6.9 in 2022)
17% decrease in SPIs (15 in 2023, 18 in 2022)
24.2% total women representation across workforce
50% women representation on the Board of Directors
4.2%
Aboriginal and Torres Strait Islander peoples in total Australian workforce,
including 19% at Jacinth-Ambrosia
✔ Iluka Indigenous Peoples Policy launched
HEALTH, SAFETY AND WELLBEING
Protecting the safety, health and wellbeing of Iluka’s people will always be the
company’s highest priority.
Iluka is focused on creating a culture where all employees are leaders in promoting a safe working
environment. This includes work to identify, assess and control risks, reduce the potential for occurrences of
occupational illness and injury, and promote healthy lifestyles. The results of the 2023 employee engagement
survey confirmed that employees agree Iluka is a safe place to work, reporting they feel comfortable to stop
work if they identify anything unsafe (93% of employees who responded).
As a result of Iluka’s efforts throughout 2023, the company achieved a significant improvement in its total
recordable injury frequency rate (TRIFR), from 6.9 in 2022 to 2.4 in 2023. This reflects visible leadership at
operational sites and a program of preventative measures to reduce the frequency and repetitive nature of
soft tissue and hand and finger injuries.
As part of Iluka’s Musculoskeletal Injury Management program, the company increased its engagement
of physiotherapists on-site and with contract partners to provide proactive health support and timely
intervention. Iluka also introduced on-site physical fitness activities after work and conducted educational
health and wellbeing sessions.
Planning and the safe execution of major works and maintenance have been a focus across all operations and
projects. In October, Iluka safely took the SR2 kiln offline for a four-month planned major maintenance outage,
with no recordable injuries.
The company continued to embed its Critical Control Management (CCM) program to mitigate fatality risk
across all Australian operating sites and in everyday work practices. More than 100 employees and 1,800
contractors completed CCM training, while operational and project teams completed more than 10,000
Critical Control Checks and 5,000 Critical Control Verifications.
Iluka continued to mature its Psychosocial Safety and Wellbeing program, updating procedures to define what
Iluka considers unacceptable behaviour and inappropriate conduct including sexual harassment, bullying and
discrimination in all forms. Iluka’s mandatory Behavioural Expectations Training was also refreshed to include
the role of the upstander to help reduce workplace bullying and harassment. Iluka continues to be transparent
with employees about psychosocial incidents occurring in the workplace at all employee townhall events.
A company-wide responsible alcohol consumption limit was introduced to support a safer workplace and
reinforce Iluka’s expectations on behaviours, also aligning with broader mining industry guidelines.
Iluka also implemented mental health first aid across its operational sites, offering essential resources and
assistance to its workforce, including contractors, further demonstrating the company’s commitment to the
wellbeing of its workforce.
Iluka continues to build an engaged, diverse and capable workforce.
Iluka and its subsidiaries employ more than 1,075 people globally, including 1,035 employees in Australia.
Iluka’s business is supported by a contractor workforce of 1,000 people.
Working for Iluka presents the opportunity to develop a career with an experienced critical minerals company
at the forefront of global decarbonisation efforts. Iluka prioritises care for employees’ wellbeing by providing
support and tools to assist them both in and outside the workplace.
Iluka seeks to have a workplace that is representative of the wider communities in which it operates. In
Australia, Iluka’s Aboriginal and Torres Strait Islander workforce participation is 4.2%, which is reflective of
strong Indigenous participation at Iluka’s Jacinth-Ambrosia and Narngulu operations.
Iluka offers traineeship opportunities for students through education partnerships, including the Clontarf
Foundation and SHINE Academy. Iluka currently employs four alumni from the Clontarf Foundation in the Mid
West and one alumni in the South West.
Iluka will facilitate stronger pathways to employment for Aboriginal and Torres Strait Islander women through
its new partnership with the Stars Foundation, providing support and encouragement to Aboriginal and Torres
Strait Islander women and girls in their academic endeavours.
In 2023, Iluka reviewed its approach to diversity and inclusion to focus on increasing diversity of social
identity (gender, age, cultural background, diverse abilities and LGBTIQ+) and diversity of professional identity
(diversity of thought, experience and education). Iluka is committed to enabling an inclusive work environment
and equitable recruitment and development practices so that everyone can meaningfully contribute to the
company’s success.
Throughout the year, activities aligned to the diversity and inclusion roadmap included the launch of the
company’s internal Women@Iluka network, designed to support women in the workplace and encourage
connection across the business. Sponsored by the Executive, the network has 259 active members
representing 98.5% of the Iluka’s total women workforce. Iluka also increased its gender-neutral paid parental
leave entitlement and held events to recognise Pride, and International Women’s Day.
Iluka’s focus on building talent pipelines at early career stages saw 101 apprentices and trainees working
across the company’s Australian operations in 2023, representing a 23% increase from 2022. Iluka’s graduate
program grew with 14 new graduates representing a range of disciplines, joining the existing cohort of six.
Iluka continued its partnership with the WA Mining Club, offering scholarships to support two metallurgy
and chemical engineering students and one mechanical engineering student in their final years of study.
Iluka joined the Future Female Leaders program to mentor female high school students in Western Australia,
providing essential knowledge and skills to enable effective leadership and future success.
The company continued to invest in developing its workforce, with 120 leaders commencing Iluka’s
Leadership Skills Series and 18 senior leaders completing the Senior Leadership Development Program.
Iluka seeks to meaningfully engage with all employees to understand concerns and opportunities for
improvement. The 2023 Employee Engagement Survey focused on the five key themes: safety and wellbeing;
diversity and inclusion; speaking up and harassment; culture; and employee engagement. A strong overall
employee engagement score was achieved, with 84% of employees participating, representing an increase
in participation compared to 77% in 2022. Employee engagement is measured by the benchmark question of
‘I would recommend Iluka as a great place to work’ with a score of 72/100 achieved for 2023, consistent with
the 2022 score.
The commitment of Iluka’s employees was evident through the recognition of 26 employees with more than
30-years of service at the unveiling of the company’s new 30 Year Service wall in the Perth corporate office.
Iluka also announced the launch of Iluka Star, a reward program that recognises the central role employees
play in the company’s success.
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED
RADIATION MANAGEMENT
Iluka seeks to be recognised and trusted as an industry leader on radiation
management.
Iluka recognises the importance of maintaining and enhancing the technical competencies of its radiation
specialists. Throughout the year, formal mentoring of Iluka’s radiation safety officers continued in accordance
with Western Australian Government requirements. The 12-month mentoring program includes significant
support and knowledge transfer, practical field experience, and preparing annual radiation management plans
and reports for the Government regulator’s review.
To ensure the company’s practices are aligned with international best practice, Iluka reviewed its Group
Radiation Procedures relating to any event of a lost Iluka radioactive source. This was in response to the lost
non-Iluka radioactive source recorded in Western Australia in February 2023.
COMMUNITY AND INDIGENOUS RELATIONS
Iluka is proud of its long-established and respectful relationships with communities;
and shares the value its business creates.
Recognising and respecting people’s human rights and cultural heritage are embedded in the company’s
values, policies and standards.
In 2023, Iluka introduced an Indigenous Peoples Policy, which outlines the company’s commitment to building
strong and collaborative relationships with Indigenous people through cultural heritage management,
providing equal employment and procurement opportunities, and engaging in partnerships that empower
Indigenous communities.
Iluka continued to strengthen relationships with Traditional Owners and Indigenous corporations through
cultural heritage activities, participation in community NAIDOC and National Reconciliation Week events, and
site visits at a number of Iluka operations.
During NAIDOC Week, Iluka hosted various events across its operations, including a yarn about the South
West Boojarah region at Capel and a Cook on Country at Narngulu. The Cataby team arranged a barbeque
with homemade damper and the painting of a mural of the camp with local Aboriginal artists. A Welcome to
Country and smoking ceremony and an immersive cultural awareness session was held at the Perth corporate
office.
Throughout the year, Iluka spent more than $5.7 million with 43 Indigenous businesses across Australia for
cultural heritage, logistic, civil and consulting services. This was in addition to the company’s contribution of
~$1 million in community investments in education, sponsorships and donations. This includes a $100,000
contribution as part of Iluka’s ongoing partnership with the Clontarf Foundation and $25,000 for the creation
of a film to capture the Indigenous Yued history and culture through storytelling.
More broadly, Iluka’s engagement with the communities in which it operates continued throughout 2023. Iluka
supported community events such as the Natimuk Show at Wimmera, Homebush Rodeo at Balranald, Salami
Festival at Euston, Oysterfest at Ceduna and the Mingenew Midwest Expo.
Iluka’s Cataby operation held an inaugural community open day in April, which attracted more than 300
local residents who wanted to learn more about mineral sands mining, connection with the community, and
employment pathways.
Iluka’s support for the Drive to the Future program continued throughout 2023, providing disadvantaged and
vulnerable young people and adults living in Moora and surrounding areas assistance to gain their driver’s
license. In addition to funding support, the Cataby team volunteered their time to deliver driving lessons.
In June 2023, Iluka announced its support for the Balranald community by providing $100,000 to the
Balranald Football and Netball Club to update its facilities over the next four years.
Iluka has supported Foodbank WA over two years through a sponsorship of $200,000 in total. During
November and December 2023, 30 Iluka employees volunteered at Foodbank’s kitchen and warehouse
facilities providing support in the lead up to Christmas.
Responsible for our environment
decrease in Level 3 or greater environmental incidents (8 in 2023, down from
11 in 2022)
27%
353ha land rehabilitated
$42m million spent on rehabilitation
BIODIVERSITY
Iluka seeks to protect biodiversity and ecosystem value and prevent or limit adverse
impacts through exploration, development, operational and rehabilitation phases.
Iluka is proud to contribute to regional biodiversity through ecological and conservation efforts. Iluka’s
research on plant biodiversity, ecology and recovery of vegetation on rehabilitated mines sites continued
during 2023. Monitoring of the breeding population of Carnaby’s Cockatoos
Cataby region continued as part of Iluka’s partnership with Murdoch University and the Museum of Western
Australia. Significantly, 15 nestlings were recorded, the largest number at this site in a single breeding season.
One of these female cockatoos was first recorded as a nestling 19 years ago.
(Calyptorhynchus latirostris
) in the
Iluka conducted the largest vegetation data collection to date of undisturbed natural and rehabilitated areas
at Jacinth-Ambrosia. More than 183 plots were surveyed to support the dark diversity project, which is
looking for the absence of species.
Read more on Iluka’s biodiversity work in the 2023 Sustainability Data Book and in Case Studies and Insights.
WATER
Iluka values water as an important resource that requires sustainable management to
ensure all users and the environment are protected.
Essential to Iluka’s operations, water is used in mining and processing activities and for drinking and
domestic use in accommodation camps. Water-related activities are regulated by relevant legislation in each
jurisdiction and are subject to set quality and quantity thresholds.
Regular monitoring ensures Iluka complies with licence requirements and that the risk of unintended spills or
discharges to the environment is minimised. During 2023, Iluka’s monitoring regime identified five incidents
relating to the release of turbid or saline water. These incidents were reported to relevant regulatory agencies
and rectified by Iluka.
Total water consumption increased in 2023 compared to previous years, coinciding with the restart of the SR1
kiln at Capel and commencement of construction of the refinery at Eneabba.
Read more on Iluka’s water performance in the 2023 Sustainability Data Book.
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED TAILINGS MANAGEMENT
Iluka is committed to managing its tailings storage facilities in a safe and
responsible manner.
Iluka applies a risk-based approach to minimise or mitigate any potential impacts on its workforce, local
communities and the environment. Tailings management practices and management systems are regularly
reviewed to ensure applicable standards are met and improvement actions completed.
In 2023, Iluka formalised its Standard for Tailings Management, outlining Executive accountability and
mandatory requirements for management of tailings at Iluka owned or operated sites. The Standard applies to
all Iluka employees, contractors and service providers. Iluka also refreshed its company-wide internal Tailings
Management Portal to standardise the company’s approach to managing and recording tailings-related risks.
A register of Iluka’s tailings storage facilities can be found in the 2023 Sustainability Data Book.
REHABILITATION AND CLOSURE
Iluka’s business objective is to achieve beneficial closure outcomes by planning and
executing the rehabilitation and closure of assets in a manner aligned with leading
practice.
Iluka is proud of the company’s strong track record in mine rehabilitation and closure, spanning more than
50 years.
353 hectares were rehabilitated across Iluka’s global footprint in 2023. This includes 223 hectares across
the company’s Australian sites and 130 hectares across sites in Virginia, United States. This resulted
in an overall reduction in Iluka’s open area, considering the ongoing mining activity at the Cataby and
Jacinth-Ambrosia operations.
Iluka achieved relinquishment of 252 hectares of rehabilitated land to the Virginia Department of Energy.
As part of the sale of a portion of Iluka’s United States assets, 335 hectares of rehabilitated and open area
landholdings in Virginia were transferred to a third party.
A new method of seeding was trialled at Jacinth-Ambrosia using a sphere drone that was modified for native
vegetation areas. The drone was able to seed 56 hectares over three days, compared to up to 14 days using
the method of seeding by hand. This contributed to record high rehabilitation in a year being achieved at
Jacinth-Ambrosia.
Long-term research trials continued at the Eneabba site on the suitability of locally and regionally collected
native seed for rehabilitation.
Read more about Iluka’s approach to rehabilitation and closure in the 2023 Sustainability Data Book.
Operate in and provide products for a lower
carbon world
✔
✔
✔
Finalised power purchasing agreements for 9MW solar installation at the
Cataby operation
Approved a pilot carbon farming project on 100ha of Iluka-owned land at
North Capel
Approved $2.2 million to continue the evaluation of NewGenSR technology
to displace the use of coal through the use of hydrogen as a reductant in
production of synthetic rutile
CLIMATE CHANGE RESPONSE
Iluka supports the Paris Agreement objectives and is committed to pursuing the reduction of its carbon
footprint and supporting the transition to a lower carbon economy through the production of critical minerals.
The company’s ambition is to be net zero by 2050 where technology is viable, available and commercially
feasible for Iluka.
Iluka accepts the Intergovernmental Panel on Climate Change (IPCC) assessment of climate change science
and potential climate change impacts. Iluka’s position is detailed in its Climate Change Position Statement.
Iluka recognises that physical and transitional risks associated with climate change may affect its business
and assets, including through changing climate hazards, changed regulation, supply chains and markets.
It has approached climate-related disclosures using the framework recommended by the Taskforce on
Climate-related Financial Disclosures (TCFD). The company will continue to progressively integrate its
climate-related disclosures into Iluka’s Annual Report, with additional supporting information and the TCFD
Index provided in the Sustainability Data Book.
Iluka’s carbon emissions arise largely from the use of coal in the production of synthetic rutile, a high-grade
titanium feedstock, which represents more than 50% of current scope 1 emissions. Coal is used in this
process as both a thermal heat source and as a reductant. These emissions are challenging to abate and
there is currently no proven and commercially feasible alternative to the use of coal as a reductant in this
process. Iluka has completed a life cycle assessment for its synthetic rutile product; more information is
available under Product Stewardship on page 59.
The second largest source of scope 1 emissions is the use of diesel for power generation and in mobile fleet
and equipment across Iluka’s mining operations.
The challenge in abating the emissions associated with use of coal and diesel is a key driver of climate-related
risk for Iluka.
Figure 1: Sources of Iluka’s
primary scope 1 and scope 2
emissions in 2023
Fuel, oil and
greases 0.1%
Natural gas 7.0%
Electricity 18.4%
ctricity
Ele
el
Dies
al
o
C
as
atural g
N
s
se
rea
d g
el, oil an
Fu
Coal 51.8%
Diesel 22.7%
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED CLIMATE RISK
In 2023, Iluka continued to identify and assess its transitional climate-related risks, as well as physical climate
risks for current operations and project pipeline.
To inform the identification of climate-related risks, Iluka considered the:
•
International Energy Agency (IEA) Announced Pledges (APS) and Net Zero Emissions by 2050 (NZE2050)
scenarios for transition risks; and
• Representative concentration pathways (RCPs) aligned with two degrees Celsius and four degrees Celsius
of global warming for physical risks.
Transition and physical risks are considered over 2030 (short-term), 2040 (medium-term) and 2050
(long-term) horizons, aligning with Iluka’s internal planning processes and corporate outlook. These risks are
intended to be managed through Iluka’s enterprise Risk Management Framework.
Iluka’s key transition risks currently relate to:
• The impact of climate change on project pipeline and future growth
• Availability, cost and supply of coal, diesel, natural gas, and electricity in context of energy transition
• Pace of changing stakeholder expectations in the context of climate change, including the ability to
demonstrate progress towards net zero by 2050 commitment
• Carbon pricing impacts on short-term costs and relative competitiveness
• Customer demands for lower carbon products
• The introduction of mandatory climate-related disclosure requirements
• Opportunities for product market expansion and diversification driven by the global transition to a lower
carbon future economy
• Growing availability of technology to reduce emissions and maintain competitiveness
Iluka’s key physical risks relate to changes in climate hazards, including decreased and less frequent but
more intense rainfall, reduced water availability, prolonged drought, increased number of very hot days and
heatwaves, and associated disruption impacting upstream and downstream supply chains.
CLIMATE STRATEGY
Iluka’s understanding of climate-related risks informs its approach to addressing climate-related challenges
and pursuing opportunities. Central to that approach is Iluka’s ability to innovate and apply new technologies
where technically and commercially viable.
Iluka applies a mitigation hierarchy to evaluate its decarbonisation options. The company explores and
implements opportunities to eliminate, reduce and substitute its scope 1 and scope 2 greenhouse gas
emissions, prioritising energy efficiency, renewable energy, alternative fuels and technology step change.
In 2023, Iluka met targets in its annual climate change work program focusing on the decarbonisation of the
company’s operations. The company progressed its Cataby solar farm towards execution, and made good
progress on its technical evaluation of the kiln gas burner project and NewGenSR technology. Progress was
also made in the development of its decarbonisation roadmap.
The table on page 55 presents the roadmap of initiatives Iluka will actively pursue in 2024 and options to
further evaluate towards our ambition to achieve net zero by 2050. This roadmap will change over time as
initiatives are implemented or effort is refocused following technical and business evaluation, and as new
initiatives are included.
Contributing to a lower carbon economy through our products
Iluka’s primary contribution is underpinned by the company’s production of critical minerals that are essential
to electrification. Iluka’s rare earths business puts the company at the forefront of global decarbonisation
efforts, through the supply of its products. It reflects a significant investment by Iluka and the Australian
Government in seizing the opportunity presented in the global transition towards net zero by 2050 to diversify
and serve new markets for products.
When complete, Iluka’s refinery will produce the key rare earths – neodymium, praseodymium, dysprosium
and terbium. These rare earths are the building blocks of a lower carbon economy – essential for the
permanent magnets used in electric vehicles and wind turbines. These renewable applications will support
the substitution of traditional internal combustion engines and energy generation using fossil fuels.
Emissions reduction
Iluka’s objective is to progressively implement greenhouse gas emissions abatement opportunities to reduce
the company’s scope 1 and scope 2 emissions as these opportunities become available and are technically
and commercially viable.
In 2022, work was undertaken to identify and assess potential decarbonisation opportunities to reduce
Iluka’s carbon footprint over the short- to long-terms. Opportunities were ranked and prioritised on a marginal
abatement cost curve, with consideration given to both current and future operations.
In 2023, this work progressed to provide greater confidence in the feasibility of available options and to
inform the development of a decarbonisation roadmap. Assessments took into consideration technology and
commercial readiness, ease of implementation, and deployment timeframes.
The work resulted in the identification of four key decarbonisation levers applicable between now and 2050,
along with corresponding options, as shown in the table below. Iluka intends to pursue these options, refining
them over time, as new initiatives are identified, and as each are further evaluated, implemented or focus is
redirected.
Energy
efficiency
Renewable
lower-emissions
Technology
energy
fuels
step-change
Alternative
•
5MW SW Solar
• Biochar
2024
Scoping
Assess/determine
what it should be
Evaluation
• Co-generation
•
• Tyre derived fuels
• NewGenSR
Technical studies
and commercial
viability
of electricy from
process waste
heat
• Diesel additives
for mobile fleet
fuel efficiency
• Kiln heat recovery*
5MW Narngulu
Solar
• Up to 10MW
as substitute for
coal in SR kiln
Balranald Solar
• SR kiln natural gas*
• Biodiesel for
mobile fleet*
technology to
displace use of
coal through use
of hydrogen as
a reductant in
production of
synthetic rutile*
Ongoing
• Process and
Continual
improvement
vehicle fuel burn
optimisation
• Electrical
efficiency of plant
equipment
• Power purchase
agreements with
offsite renewable
generation
Execute
Deliver the project
•
9MW Cataby Solar
*Will continue to be evaluated but will not be executed until technically and commercially feasible.
Table: Iluka’s decarbonisation options to be actively pursued in 2024
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED • Energy efficiency
Guided by the Iluka Carbon and Energy Standard, all Iluka operations monitor energy use and greenhouse
gas emissions and consider ways to reduce emissions and improve efficiency. This includes through
CORE, Iluka’s continuous improvement program, which provides a framework and support for employees
to identify, evaluate and implement improvements, including those relating to emissions reduction
opportunities. Energy efficiency opportunities identified are progressively implemented to help reduce
Iluka’s emissions intensity, where technically and commercially viable.
In 2024, this will include evaluating opportunities to optimise process and vehicle fuel burn, trialling the
use of diesel additives to improve the efficiency of Iluka’s mobile fleet and equipment, and considering
how variable speed drives and pump optimisation may contribute to improved electrical efficiency of
plant equipment.
• Renewable energy
Iluka’s scope 2 emissions associated with electricity use represent approximately 18% of Iluka’s current
emissions. The company continues to focus on initiatives to increase the use of renewable energy as this
is expected to be an opportunity to emission reductions in the short- to long-terms.
Iluka has taken steps to reduce emissions associated with on-site electricity generation at Jacinth-
Ambrosia. A hybrid solar diesel electricity facility was built in 2022 and in 2023 this resulted in a 13%
reduction in emissions associated with electricity generation at this operation. Development of the
9-megawatt solar facility at Cataby progressed in 2023, with finalisation of a power purchase agreement,
completion of 80% of the design work, and orders placed for major equipment. This solar facility is
expected to abate ~10,700 tonnes of carbon dioxide per annum once fully operational.
All of Iluka’s new mining and processing projects include a review of renewable energy options as part
of project evaluation. This work, coupled with the ongoing assessment of renewable energy options
at existing operations, has allowed Iluka to develop a pipeline of renewable energy facilities which are
expected to be implemented in the coming years.
In 2024, in addition to the execution of the Cataby solar farm, Iluka will evaluate renewable options at
Narngulu, Balranald and in the South West.
• Alternative fuels
In 2023, Iluka investigated alternative technologies to reduce the carbon footprint of the synthetic rutile
production process. This work considers short- and medium-term efficiency and emissions intensity
measures including coal alternatives to be used as a reductant and/or for process heat.
In 2024, Iluka will evaluate the potential use of natural gas in its synthetic rutile kilns, and undertake trials
for emerging technologies to replace some coal in this process, including tyre derived fuels. For Iluka’s
mining operations, the company will continue to evaluate the potential for augmentation of diesel to
provide a reduction in overall use and emissions, including use of bio- and renewable diesel.
Fuel, oil and greases
Natural gas
Coal
• Process fuel burn
optimisation
• Tyre derived fuel
• Biochar
• Kiln natural gas*
• Kiln heat recovery*
• NewGenSR*
s
e
s
a
e
r
d g
n
e l, o i l a
u
F
s
a
a l g
r
u
t
N a
y
r i c i t
t
c
E l e
e l
s
D i e
a l
o
C
Note: * denotes initiatives that will continue to be evaluated but will not be
executed until technically and commercially viable.
Electricity
• Electrical efficiency
• Cataby solar
• Narngulu solar
• Balranald solar
• South West solar
• Co-generation
• Power purchase
agreements
Diesel
• Vehicle fuel burn
optimisation
• Diesel additives
• Biodiesel*
Figure 2: Iluka’s decarbonisation initiatives to address primary sources of scope 1 and scope 2 emissions
Carbon offset strategy
Iluka recognises the role of carbon offsets in addressing long-term, hard-to-abate emissions, as well as
meeting compliance requirements under the Australian Government Safeguard Mechanism Reform.
In 2023, Iluka entered into an agreement with a conservation not-for-profit organisation to implement a pilot
carbon farming project to generate Australian Carbon Credit Units on 100 hectares of Iluka-owned land at
North Capel. Ground work commenced in December 2023 with first plantings expected during 2024.
Work continued to develop Iluka’s carbon offsets strategy to help guide decisions around development of
carbon offset projects on land as well as the purchase of actual carbon offsets.
• Technology step-change
• Use of carbon pricing
Iluka is exploring long-term alternatives to coal as a reductant in the synthetic rutile production process.
This includes ongoing evaluation of the next generation of synthetic rutile production technology
(NewGenSR), for example, utilising fluid bed technology and hydrogen as a reductant to replace coal. This
presents a potential step-change opportunity to reduce emissions.
Iluka invented NewGenSR technology more than 20 years ago and has recently renewed its commitment
to evaluating the technology as a key focus of the climate change work program. The technology could be
applied beyond 2030 to substantially reduce emissions from the North Capel synthetic rutile operation. In
2024, Iluka has set aside $2.2 million to continue the evaluation of NewGenSR technology, which includes
a hydrogen supply study.
Iluka will continue to monitor and investigate the emergence of transitional technologies in the context of
its decarbonisation roadmap.
Iluka applies a shadow carbon price when evaluating the feasibility of future projects to better manage
climate-related risks and support the adoption of lower emissions options as part of new project design.
The company monitors changes in carbon policy in key jurisdictions of interest and assesses implications
for its internal carbon price.
Iluka completed a review of carbon regulation and direction of carbon pricing to better understand carbon
price risk in 2022. During 2023, this was further evaluated in the context of further work to understand
transition risks and in response to the reform of the Safeguard Mechanism.
Building resilience to the physical impacts of climate change
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 into business strategy and investment decisions.
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED Measuring greenhouse gas emissions
Iluka’s scope 1 and scope 2 emissions, along with additional emissions and energy data, is included in the
2023 Sustainability Data Book. Emissions are based on Iluka’s reporting year (1 January to 31 December)
and are reported for Iluka’s group-wide businesses, which includes all exploration, construction, operations,
rehabilitation and corporate activities.
Continual improvement in its carbon accounting helps the company to better understand its emissions
profile. While the focus is on eliminating and reducing scope 1 and 2 emissions produced by the company’s
operations, work is underway that will support the development of Iluka’s scope 3 emissions inventory.
Iluka reports greenhouse gas emissions for its Australian operations under the
Emissions Reporting (NGER) Act 2007
. The company’s North Capel operation is covered under the Australian
National Greenhouse and
Safeguard Mechanism.
Approximately 80% of Iluka’s total greenhouse gas emissions are derived from two operations – North Capel
and Cataby. 2023 saw an increase of 9% in total scope 1 and scope 2 emissions compared to 2022. This was
largely due to the restart of SR1 at North Capel in December 2022.
Governance
Iluka’s Board Sustainability Committee supports the Board in considering Iluka’s climate-related risks and
approach to climate change. The Committee monitors the effectiveness, performance and reporting of Iluka’s
climate response and progress made against objectives in the annual climate change work program.
The Board Sustainability Committee is informed by an Executive-level Sustainability Committee. At a working
level, alignment across business functions on climate-related work is carried out through a climate change
working group, led out of the Technology function within the company.
PRODUCT STEWARDSHIP
Sustainable delivery of Iluka’s products and minerals requires responsible business
practices throughout Iluka’s value chain.
Iluka works collaboratively with its business partners to uphold responsible practices throughout its value
chain and to support opportunities for responsible product use.
Iluka’s mining and processing activities produce a range of by-products and co-products that generate
revenue and limit waste production, handling and storage. Rare earths are one such co-product that are
separated during processing of Iluka’s mineral sands.
In 2023, Iluka commenced study work to evaluate the viability of commercial-scale production of rare earth
metals. Metallisation is the next stage of value addition following the production of rare earth oxides. Subject
to positive study outcomes, metallisation would further enhance Iluka’s marketability as a sustainable
producer of light and heavy rare earths, with traceable product provenance. Read more information on Iluka’s
Eneabba refinery and metallisation work on page 40.
In 2022, Iluka completed a life cycle analysis for the company’s synthetic rutile production process to
better understand the carbon footprint generated from synthetic rutile. Analysis found that one of the main
determiners of greenhouse gas emissions in the pigment supply chain is the grade of the feedstock used.
There is a trade-off between using a high-grade feedstock, such as Iluka’s synthetic rutile, which undergoes
significant processing prior to reaching the pigment plant; and using a lower-grade as-mined feedstock,
which requires pigment manufacturers to use significant chemical inputs to produce finished pigment,
thereby capturing a larger proportion of carbon emissions.
To capture this trade-off, Iluka’s life cycle analysis compared the carbon footprint of Iluka’s synthetic rutile
production system against other titanium feedstocks used within both sulphate and chloride pigment
production processes in the context of pigment manufacture from a single-feedstock. In that context, results
suggest the emissions intensity of Iluka’s synthetic rutile is placed in the lowest quartile when compared to
other titanium feedstocks.
In 2023, Iluka commenced similar analyses on the company’s zircon and future rare earth oxide products.
The findings from this work will be a key input to the scope 3 greenhouse gas emission inventory currently
under development.
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59
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED Business risk
management
Risk management is fundamental to informing strategic choices and achieving the company’s purpose of
delivering sustainable value. Effectively identifying, understanding and managing exposure to risk enables
Iluka’s Board and management team to make informed choices on where to take risks to realise opportunities
and where to manage risks to enhance and preserve business 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 Risk Management Policy and
Framework set out the accountabilities for risk management at respective levels of the organisation and
its risk management approach, the top level being the Board’s Risk Appetite Statement. This approach is
operationalised and embedded through internal standards and guidance, training and support.
Risks are managed according to the Board-approved Risk Appetite Statement which includes risk tolerance
and reporting guidance across a range of business and strategic priority areas. This is reported to Iluka’s
Audit and Risk Committee biannually. Further, risks which could have a material impact on the company
are reported to the Board and a review of Iluka’s strategic risk profile is undertaken annually to inform
planning and strategy. 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 Policy and Management Framework
in context of business priorities and industry practices. Focused oversight and monitoring of the Group’s
sustainability-related risks, including those related to health, safety, environment and climate, is undertaken
by Iluka’s Sustainability Committee.
Adequacy of Iluka’s risk management practices is monitored and enhanced through an internal audit program
taking into account Iluka’s risk profile, strategic priorities and the Board’s risk appetite.
Iluka has a dedicated Business Risk and Internal Audit function that is accountable to the Audit and Risk
Committee and supports management to centrally coordinate reporting and review of the Board’s risk
appetite and strategic risks, provide training and support, and drive continuous uplift of risk management
practices including through design and delivery of an internal audit program. Business Risk, Internal Audit and
dedicated Group support functions (including health and safety, environment, community and climate) work
together to support holistic risk management in Iluka’s frontline operations and project delivery.
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61
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED
Board of Directors
Governance and oversight
Group Risk
Audit and Risk Committee
• Training and support
• Monitoring management team’s performance
to implement
Risk Policy and
Management
Framework
• Drive continuous
uplift of risk
management
capabilities aligned
to business needs
• Design and delivery
of an internal audit
program to evaluate
effectiveness of
risk management
control environment
and adequacy of
risk management
practices
against the risk management framework including
whether management is operating within the
Board’s risk appetite
• Review and monitor adequacy of Iluka’s Risk Policy
and Management Framework
Executive Team
•
Implementation and embedding of Risk Policy and
Management Framework
• Review and manage strategic and risks material to
business outcomes
•
Recommend to Board tolerance measures against
Board’s risk appetite
Management and Employees
Identify, treat and report business risks in accordance
with Risk Policy and Management Framework
Figure 3: Iluka’s risk management accountabilities
KEY RISK AREAS
Set out below are the key risk areas that could have a material impact on Iluka. The risks described are not an
exhaustive list of risks for Iluka. Risks will inevitably evolve and new risks will emerge as Iluka implements its
strategies in a continuously evolving global environment.
These risks are considered against a backdrop of a myriad of changes and ongoing uncertainties in the
environment in which Iluka operates, including global climate change policy and adaption responses,
macro-economic environment, geopolitical conflicts, and changing regulatory landscape, including that for
cybersecurity, climate reporting and positive duties to address sexual harassment.
Iluka continues to monitor the adequacy of its risk appetite framework to ensure it continues to support
the company to navigate a continuously evolving landscape and achieve its purpose of delivering
sustainable value.
Attracting and Retaining Talent
Attracting and retaining talent remains a priority due to the continuation of the challenging external
environment including tight employment markets in 2023. Due to a concentrated focus and development of
specific programs, Iluka has continued to successfully attract and retain talent. This includes improvements
to the management of its contractor workforce for Iluka’s mining operations.
Health and Safety Risks
Iluka’s strong systems, processes and culture help protect the health and safety of its workforce. Health and
safety risks are managed through a number of programs such as the Critical Control Management program,
which aims to eliminate the risk of fatalities. Management of psychosocial risks, including those associated
with sexual harassment, has also been a priority focus for management and the Board in 2023.
Climate Change Risk
Iluka acknowledges that the effects of climate change may have an impact on its assets, productivity, supply
chains, and markets. Areas of risk management for Iluka include managing its decarbonisation pathway
and its approach to physical risks. Iluka will continue its ongoing process of identification, assessment and
management of climate-related risks.
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63
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 Cyber Risks
Business Interruption Risk
Cyber risk, if materialised within Iluka or its key vendors, may cause disruption to our business processes,
operations, and/or result in data breaches.
Iluka recognises that the threat from cyber-attacks causing business disruption is ongoing and driven by
external factors outside of the company’s control. The risk is increasing given reliance on technology and
increased reliance on third parties to keep data secure. Accordingly, Iluka prioritises robust cybersecurity
through a comprehensive risk-aligned strategy that directly maps to the Australian Signals Directorate’s
(ASD) Essential Eight and adapts to the evolving cyber threat landscape. This strategy leverages the widely
recognised and industry-standard National Institute of Standards and Technology (NIST) Cybersecurity
Framework (CSF) to fortify Iluka’s security controls, establish measurable objectives, and proactively
manage cyber.
Iluka further enhances its focus on vital controls such as multi-factor authentication, restricted administrative
privileges, and rigorous patch management by leveraging guidance from the Australian Cyber Security
Centre. This proactive approach ensures the highest level of security for both Iluka and its key vendors.
Financial Risks
Iluka recognises the importance of maintaining a strong balance sheet that allows the company to pursue its
strategic objectives. The company is exposed to risks related to the cost and availability of funds, fluctuations
in interest rates, and foreign exchange rates (see Note 20 in the financial statements). Iluka has established
policies that outline appropriate financial controls and governance to ensure that financial risks are identified,
managed and recorded in a manner consistent with generally accepted industry practice, accounting
standards and governance standards.
Growth Risks
Iluka regularly evaluates its potential to enhance its production profile or extend the economic life of deposits
by developing new projects within its portfolio. The company aims to generate and deliver on 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 are a current focus due to the execution of the Eneabba rare earths
refinery and Balranald projects. These risks include the ability to acquire and/or obtain appropriate access to
property, regulatory approvals, supply chain risks, inflationary environment, construction and commissioning
risks. Cost escalation due to the challenging project environment in Australia continues to be experienced
across the industry.
Iluka conducts regular reviews to mitigate property and business continuity risks that may arise due
to natural disasters, material disruptions to logistics chains, critical plant failures, industrial action or
future pandemic-related issues. The company manages these risks by utilising its crisis and emergency
management processes and conducts crisis and emergency management training and exercises at Iluka’s
sites annually. Iluka also maintains a global insurance program that may offset a portion of the financial impact
of a major business interruption event.
Environmental Risks
Iluka is focused on pursuing the highest standards of environmental management as stated in the Iluka
Health, Safety, Environment and Community Policy. These standards are based on current community
expectations, applicable legislation and regulatory standards, which are subject to change over time.
Sustaining Operations Risks
Iluka prioritises the maintenance of a pipeline of Ore Reserves and projects. The company’s Executive and
Board have an ongoing focus on tailings dam management across all operations. Iluka has a dedicated
geotechnical resources team that leverages external tailings and dam management experts. The company
conducts extensive annual reviews of its resources and reserves, asset integrity, short- and long-term
planning, and geotechnical and hydrogeological modelling.
Community/Social Risk
Iluka operates in various regions with diverse community, heritage and social laws and cultural practices.
The company manages the evolving community expectations by developing strong strategies, maintaining
healthy relationships with communities, and fulfilling its commitments.
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65
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED FINANCIAL
REPORT
In this section
• Results for announcement to the market
• Directors’ report
• Remuneration report
• Auditor’s independence declaration
• Financial statements
• Directors’ declaration
•
Independent auditor’s report
Results for
announcement to
the market
66
67
ILUKA RESOURCES LIMITEDRESULTS FOR ANNOUNCEMENT TO THE MARKET67Provided 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 2023 (the 'financial year') compared with the year ended 31 December 2022 (the 'comparative year').All currencies shown in this report are Australian dollars unless otherwise indicated.Revenue from ordinary activities Down 20% to $1291.0mNet profit after tax for the period from ordinary activities - continuing operationsDown 34% to $342.6mNet profit after tax for the period attributable to equity holders of the parentDown 41% to $342.6mDividends2023 final: 4 cents per ordinary share (100% franked), to be paid in March 20242023 interim: 3 cents per ordinary share (100% franked), paid in September 20232022 final: 20 cents per ordinary share (100% franked), paid in March 20222022 interim: 25 cents per ordinary share (100% franked), paid in September 20222022 SRL demerger distribution: $145.8 million, distributed in August 2022Key ratios20232022Basic profit per share (cents) - continuing operations80.5 116.9 Diluted profit per share (cents) - continuing operations79.8 115.9 Free cash flow per share (cents)1(37.5)104.7 Return on equity217.1 33.0 Net tangible assets per share ($)3.84 3.27 ¹ Free cash flow is determined as cash flow before refinance costs, proceeds/repayment of borrowings and dividends paid in the year.² Calculated as net profit 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 2023 final dividend.The Directors have determined that no discount will apply for the DRP in respect of the 2023 final dividend. Shares allocated to shareholders under the DRP for the 2023 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 11 March 2024. The last date for receipt of election notices for the DRP is 7 March 2024.INDEPENDENT AUDITOR’S REPORTThe Consolidated Financial Statements upon which this Appendix 4E is based have been audited.ANNUAL REPORT 2023ILUKA RESOURCES LIMITED Directors’ Report
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 2023.
The overview of Iluka’s operations, including key aspects of operating and financial performance are
contained on pages 20 to 65 which forms part of the Directors’ Report for the year ended 31 December 2023
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:
• R Cole (Chairman)
• T O’Leary (Managing Director and CEO)
• M Bastos
• L Saint
• S Corlett
• A Sutton
DIRECTORS’ PROFILES
Name:
Rob Cole
Appointed:
1 March 2018
Qualifications:
LLB (Hons), BSc
Role:
Non-executive Director, Chairman
Age:
61
Independent:
Yes
Committee membership:
• Nominations & Governance Committee (Chair)
• People & Performance Committee
• Sustainability Committee
Relevant skills and experience:
Rob has over 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 joining Woodside, Rob spent more than 21 years in corporate,
energy and resources law, including three years as partner-in-charge of the Perth-based national law firm
Mallesons. Rob is a former Non-executive Chair of Southern Ports Authority and GLX Group.
Other Directorships and Offices (current and recent):
• St Bartholomew’s House Inc. - Non-executive Director (retired October 2022)
• Synergy - Non-executive Chair (retired April 2023)
• Perenti Global Limited - Non-executive Chair (appointed July 2018)
• Landgate - Non-executive Chair (retired February 2023)
• Council of Curtin University – Non-executive Member (appointed June 2022)
• Perth Airport – Non-executive Chair (appointed January 2023)
Name:
Tom O’Leary
Appointed:
13 October 2016
Qualifications:
LLB, BJuris
Role:
Managing Director
Age:
60
Independent:
No
Relevant skills and experience:
Tom has over 30 years of 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); Chairman (appointed April 2023)
68
69
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
Name:
Marcelo Bastos
Appointed:
20 February 2014
Name:
Susie Corlett
Appointed:
1 June 2019
Qualifications:
BEng Mechanical (Hons,
UFMG), MBA (FDC-MG), MAICD
Role:
Non-executive Director
Qualifications:
BSc (Geo, Hons),
FAusIMM, GAICD
Role:
Non-executive Director
Age:
60
Independent:
Yes
Age:
53
Independent:
Yes
Committee membership:
•
Audit & Risk Committee
• Nominations & Governance Committee
• Sustainability Committee (Chair)
Relevant skills and experience:
Marcelo has over 37 years of operational and project experience in the mining industry across numerous
commodities and geographies, particularly in Australia, Africa and South America.
Marcelo has extensive experience in major projects development, operations, 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, projects and marketing. 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):
• Golder Associates - Non-executive Director (retired April 2021)
Committee membership:
• Audit & Risk Committee
• Nominations & Governance Committee
• Sustainability Committee
Relevant skills and experience:
Susie has over 25 years of 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. Susie is currently an Advisory
Board member for the Foundation of National Parks and Wildlife, a member of Chief Executive Women, and is
a former Non-executive Director of the David Burgess Foundation.
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 (retired December 2022)
• Aurizon Holdings Limited - Non-executive Director (appointed November 2017)
• Aurelia Metals Ltd - Non-executive Director (appointed October 2018)
• Anglo American PLC - Non-executive Director (appointed April 2019)
• Mineral Resources Limited - Non-executive Director (appointed January 2021)
Name:
Lynne Saint
Appointed:
24 October 2019
Qualifications:
BCom, GradDip Ed Studies,
FCPA, FAICD, Cert Business
Administration
Role:
Non-executive Director
Age:
61
Independent:
Yes
Committee membership:
• Audit & Risk Committee (Chair)
• Nominations & Governance Committee
• People & Performance Committee
Relevant skills and experience:
Lynne has over 30 years of 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, and 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)
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ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
Name:
Andrea Sutton
Appointed:
11 March 2021
Qualifications:
BEng Chemical (Hons),
GradDipEcon, GAICD
Role:
Non-executive Director
Age:
52
Independent:
Yes
Committee membership:
• People & Performance Committee (Chair)
• Nominations & Governance Committee
Relevant skills and experience
Andrea has over 25 years of experience 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 former Non-executive Director of Energy
Resources Australia Limited. 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):
•
Infrastructure WA - Board Member (retired December 2022)
• 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 (retired September 2023)
• Australian Naval Infrastructure (ANI) – Non-executive Director (appointed September 2023)
• Perenti Limited – Non-executive Director (appointed October 2023)
• Water Corporation – Non-executive Chair (effective January 2024)
MEETINGS OF DIRECTORS
In 2023 the Board formally met on 11 occasions, of which eight meetings were scheduled. In addition to
these meetings, the Board spent a day primarily focused on strategic planning and a day touring the Mid
West operations.
The non-executive directors periodically met independent of management to discuss relevant issues.
Directors’ attendance at Board and committee meetings during 2023 is detailed below:
Director
Board
Audit & Risk
Committee
Nominations
& Governance
Committee
People &
Performance
Committee
Sustainability
Committee
(1) (2)
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Total Meetings
11
Executive
T O’Leary
11
11
Non-executive
R Cole
M Bastos
S Corlett
L Saint
A Sutton
11
11
11
11
11
11
10
11
11
11
4
4
4
4
6
6
6
6
6
6
6
6
6
6
6
6
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
3
3
3
3
3
3
3
3
3
3
(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.
(2) “Attended” indicates the number of meetings attended by each director.
Chairman
Member
DIRECTORS’ SHAREHOLDING
Directors’ shareholding is set out in the Remuneration Report, section 6.
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ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
EXECUTIVE TEAM PROFILES
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 2018 and assumed accountabilities for
Head of Development in 2020. She is a qualified chartered accountant with over 20 years’ experience working
in both professional practice and public listed companies. Ms Stratton commenced her career with KPMG,
spending seven 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. Ms
Stratton is the Iluka nominee Board member on Deterra Royalties Ltd, since its listing on the ASX in 2020.
Colin Nexhip, PhD (Chem Eng), BSc (Hons), BEd
Chief Technology Officer
Mr Nexhip joined Iluka in 2023 as the Chief Technology Officer. Prior to joining Iluka, Mr Nexhip was at
Newmont and has been based in the US for the last 15 years where he most recently held the role of Vice
President – Assets & Energy Management. Mr Nexhip has over 25 years’ experience in the mining industry,
including 15 years with Rio Tinto.
Craig Renner, B Eng Chem & Process (Hons); Exec MBA
Acting Project Director, Eneabba Project
Mr Renner joined Iluka in 2020 with his most recent prior role as GM of Strategy, Planning & Commercial
functions including procurement and warehousing. Starting as a chemical engineer, Craig’s career expanded
into strategy/management consulting and senior corporate strategy roles with significant exposure to a
range of industries including oil and gas, coal, iron ore and steel. Prior to Iluka he held the position of Head of
Strategy, Planning, Studies and Technology, for BHP’s WA Iron Ore business.
Daniel McGrath, BSc (Math)
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. His most recent
appointment was as Chief Technology Officer and prior to that General Manager - Cataby and South West
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.
Matthew Blackwell, BEng (Mech), GradDip (Tech Mgt), MBA, MAICD, MIEAust
Head of Projects and Sales and 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 30 years of experience in the mining
industry has involved varied technical and leadership roles, spanning multiple commodities.
Sarah Hodgson, LLB, GAICD
General Manager, People and Sustainability
Ms Hodgson has 25 years’ professional experience spanning HR, tax and sustainability. Ms Hodgson
joined the People team at Iluka Resources in 2013 and was appointed to her current role in March 2018. Her
career started at PricewaterhouseCoopers in London providing advice on UK and US tax, employment and
international mobility before relocating to Australia with KPMG in 2002. Prior to joining Iluka Ms Hodgson
held senior roles, both as a consultant and in-house, at Mercer, Westpac and KPMG advising on executive
remuneration, HR and governance matters.
Shane Tilka, BCom
General Manager, Australian Operations
Mr Tilka joined Iluka in November 2004 and has held operations management roles throughout the company.
His most recent appointment was General Manager, Jacinth-Ambrosia and Mid West. Prior to this Mr Tilka was
the Chief Operating Officer for Sierra Rutile Ltd, and General Manager for Iluka’s US Operations and he 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, Commercial, 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.
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 68 to 77 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 rare earths, and
rehabilitation. 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.
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75
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 INDEMNIFICATION OF AUDITORS
Iluka’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 are set out in Note 26 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
for the following reasons:
Corporations Act 2001
• 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.
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 26 to 45. 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 2023 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 nearestdollar.
This report is made in accordance with a resolution of the directors.
22 February 2024
A copy of the auditors’ independence declaration as required under section 307C of the
2001
is set out on page 104.
Corporations Act
ENVIRONMENTAL REGULATIONS
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.
Rob Cole
Chairman
Tom O’Leary
Managing Director and CEO
MATTERS SUBSEQUENT TO THE END OF THE
FINANCIAL YEAR
The directors are not aware of any matter or circumstance not otherwise dealt with in the Directors’ Report
or Financial Statements 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 the current or subsequent financial years.
DIVIDEND
The directors have declared a fully franked final dividend of 4 cents per ordinary share payable on
28 March 2024.
76
77
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 Remuneration Report
MESSAGE FROM THE PEOPLE AND PERFORMANCE
COMMITTEE CHAIR
Dear Shareholders,
On behalf of the Board, I am pleased to present Iluka’s Remuneration Report (Report) for the financial year to
31 December 2023 (2023).
As noted by our Chairman and Managing Director, the macro environment during 2023 has created
challenging conditions for many companies. In this environment, Iluka has delivered a positive financial
performance and strong sustainability outcomes across safety, environment and rehabilitation.
2023 Performance highlights
• Strong safety performance: During 2023, there was a significant and pleasing reduction in the total
recordable injury frequency rate, reducing from 6.9 at the beginning of 2023, to 2.4 at the end of the year.
Strong leadership presence in the field was a core focus in the year, as was the implementation of critical
control management.
• Disciplined approach delivering positive returns: The Company has continued to
demonstrate market discipline in responding to the challenging conditions of 2023, with a focus on
prioritising the value of our products and managing production and inventory settings.
• Development of Iluka’s Rare Earth business and progression of growth project
pipeline: Progress has been made in 2023 on the Rare Earths Refinery FEED, with a key focus on value
optimisation measures and operational efficiency improvements. Iluka continues to progress on its other
growth projects, which include the construction of Balranald, a rutile-rich critical minerals development
utilising internally developed, remotely operated, underground mining technology, as well as a feasibility
study for a rare earth metallisation facility.
Further details are set out in the Annual Report.
Remuneration
As indicated in the 2022 Remuneration Report, the Board completed a review of Executive Remuneration
arrangements to ensure that they continued to be the most effective arrangements to incentivise and retain
key talent, as well as driving Iluka’s long term business strategy.
The review considered shareholder feedback, industry market practice, and the optimal way to continue to
reward and incentivise the Managing Director and Executive Key Management Personnel (KMP) to deliver
the Company’s strategy. The outcome was the adoption of a new remuneration structure effective from the
financial year that commenced on 1 January 2023. A separate Short Term Incentive plan (STIP) and Long
Term Incentive plan (LTIP) have been implemented, de-coupling the previous Executive Incentive Plan (EIP).
Key highlights of the STI and LTI plans include:
• STIP and LTIP performance hurdles mirror the short and long term performance hurdles previously used
for determining the awards opportunity under the EIP.
• STIP and LTIP performance hurdles assessed independently removing the ‘double test’ on the
performance rights awarded under the EIP.
• STIP awards are delivered as 50% cash and 50% restricted shares deferred in two equal tranches over
one and two years.
• LTIP performance period decreasing from five to four years, which is more reflective of market practice
and a market competitive remuneration structure.
• No dividends or equivalent payments are made in relation to the LTIP award.
• A modest increase to maximum award opportunities, following detailed benchmarking against Iluka’s
peers and key competitors for Executive talent.
Refer to Section 2 for further details.
2023 Remuneration outcomes
In determining the 2023 remuneration outcomes, the Board has carefully considered factors encompassing
company performance, individual achievements and alignment with stakeholder expectations. In determining
the financial outcome, in particular the Return on Capital measure, the Board exercised its discretion to
reduce the achieved outcome, reflecting the delayed capital spend on the Eneabba Refinery. The Board also
notes that no adjustment was made to the production scorecard measure, resulting in a below threshold
outcome, despite the production discipline demonstrated by pausing SR1 being in the long term interest of
stakeholders. The following summarises the outcomes by component:
• Fixed Remuneration Increase: No fixed remuneration increases were awarded to Executive KMP
in 2023.
• 2023 STIP: the Board has determined a STIP outcome of 69.3% of maximum (104% target) for the
Managing Director, based on 99% achievement against target under the annual group scorecard and
118.8% achieved against individual strategic objectives. With the introduction of the STIP for 2023, 50%
of the Managing Director’s award will be delivered in cash and 50% will be delivered in restricted shares.
KMP outcomes were between 68 - 70% of maximum (depending on the individual executive). Refer Section
3 for further details.
• 2020 EIP Performance Rights: In 2019 the performance period for the performance rights
component of the EIP increased from four to five years. As a result, the performance rights awarded under
the 2020 EIP are not due to be tested until 31 December 2024, creating a gap year in vesting. Therefore, no
long term performance rights are due to vest in 2023.
• Board fee movement: No changes to the Non-executive Director fees were made during 2023.
The Board believes these outcomes fairly recognise the performance of the company and the disciplined
performance of management.
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
Andrea Sutton
Chair of the People and Performance Committee
78
79
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 2023 AT A GLANCE
2023 Key Highlights:
TABLE OF CONTENTS
This Remuneration Report contains the following Sections.
1
2
Reflects NPAT and ROC for the Group Incentive Scorecard and is adjusted to remove the income from Deterra.
Reflects Production for the Group Incentive Scorecard, which excludes Zircon in Concentrate.
How this year’s performance compares to previous years:
he following table outlines historic business performance outcomes:
T
KKPPII
Net profit/(loss) after tax ($m) – Reported
Net profit/(loss) after tax ($m) – Underlying4,5
Net profit/(loss) after tax ($m) – Underlying, excluding Deterra6
Underlying EBITDA (Group) ($m)4
EBITDA margin (%)
Free cash flow ($ million)
Earnings per share (cents)
Return on equity (%)
Closing share price ($)7
Dividends paid (cents)8
Franking credit level (%)
Average AUD: USD spot exchange rate (cents)
22002233
342.6
343.3
315.4
581.8
47.0
(159.6)
80.5
17.1
6.60
7
100
66.5
22002222
22002211
2200220033
2200119933
588.5
597.0
558.8
946.4
54.8
444.3
138.6
33
9.53
45
100
69.5
365.9
314.8
296.4
652.3
43.9
299.5
86.7
25.9
9.89
24
100
75.1
2,410
151.2
151.1
423.1
41.2
36.3
570.4
283.7
6.36
2
100
69.1
(299.7)
278.7
278.7
616.0
51.6
139.7
(71.0)
(26.6)
4.79
13
100
69.5
Revenue per tonne Z/R/SR sold ($/t)
2,314
2,214.7
1,593
1,625
1,654
3
4
Reported earnings in 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.
Underlying 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.
The reconciliation for the 2023 Underlying Net profit/(loss) after tax can be found on page 28 of the 2023 Annual Report.
5
6 Underlying Net profit/(loss), excluding the income derived from Deterra Royalties is used as a financial measure in the Group incentive Scorecard. Deterra Royalties
demerged from the Group in November 2020.
2019 represents the historical closing share price adjusted for the demerger of Deterra Royalties (effective October 2020) and Sierra Rutile limited (SRL) (effective July
2022). 2020 and 2021 represent the historical closing share price adjusted for the demerger of Sierra Rutile Limited. Data sourced from ASX
www2.asx.com.au/markets/company/ilu. Starting price on 2 January 2019 was $7.48.
Dividends declared in relation to the year.
7
8
SSEECCTTIIOONN 11
Who is covered by
this Report?
SSEECCTTIIOONN 22
Executive
remuneration
framework –
overview
SSEECCTTIIOONN 33
2023 Executive
KMP
Remuneration
Outcomes
SSEECCTTIIOONN 44
Non-executive
Director
Remuneratio
n
SSEECCTTIIOONN 55
Remuneration
Governance
SSEECCTTIIOONN 66
Additional
Remuneration
Disclosures
Section 1 defines the KMP at Iluka covered in this Remuneration Report.
Page 82
Section 2 describes Ilukaʼs remuneration philosophy and the 2023 remuneration
structure for Executive KMP (including further detail on the new STIP and LTIP and
former EIP).
Page 83
Section 3 details 2023 remuneration outcomes for Executive KMP including fixed
remuneration, STIP outcomes and long term EIP performance rights vesting
outcomes where relevant.
Page 89
Section 4 details policy fee and benefits for the companyʼs Non-executive Directors
including relevant statutory remuneration disclosure.
Page 95
Section 5 provides an overview of key elements of the companyʼs remuneration
governance framework and other governance disclosures for 2023.
Page 97
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 99
80
81
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
1. WHO IS COVERED BY THIS REPORT?
This Report details the remuneration arrangements for Ilukaʼs 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 2023
year comprised the following Executive KMP and Non-executive Directors.
NNaammee
PPoossiittiioonn
TTeerrmm aass KKMMPP
Executive KMP
Current Members
2. EXECUTIVE REMUNERATION FRAMEWORK –
OVERVIEW
2.1 Changes to the Executive Incentive Plan
In 2022, the Board conducted an extensive remuneration review to ensure the Company has the most appropriate remuneration
framework in place to attract and retain key talent. As a result of this review, a new remuneration structure was adopted for
2023 consisting of a STIP and LTIP. The primary change in the STIP and LTIP from the EIP is the de-coupling of the long term
component from the annual scorecard. As part of this review, the Board also engaged with external stakeholders to
communicate key changes and understand their views.
Key highlights of the STI and LTI plans include:
T OʼLeary
Managing Director and Chief Executive Officer (Managing Director)
Full year
• STIP and LTIP performance hurdles mirror the short and long term performance hurdles previously used for determining the
A Stratton
Chief Financial Officer and Head of Development
M Blackwell
Head of Projects and Sales & Marketing
S Tilka
General Manager, Australian Operations
Non-executive Directors
Current Members
R Cole
M Bastos
S Corlett
L Saint
A Sutton
Chairman, Independent Non-executive Director
Independent Non-executive Director
Independent Non-executive Director
Independent Non-executive Director
Independent Non-executive Director
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Full year
awards opportunity under the EIP.
• STIP and LTIP performance hurdles assessed independently removing the ‘double testʼ on the performance rights awarded
under the EIP.
• STIP awards are delivered as 50% cash and 50% restricted shares deferred in two equal tranches over one and two years.
•
LTIP performance period decreasing from five to four years, which is more reflective of market practice and a market
competitive remuneration structure.
• No dividends or equivalent payments are made in relation to the LTIP award.
• A modest increase to maximum award opportunities, following detailed benchmarking against Ilukaʼs peers and key
competitors for executive talent.
Further details on the changes are outlined below.
22002222 aapppprrooaacchh
22002233 aapppprrooaacchh
The 2022 EIP framework included the following components:
■
■
■
CCaasshh:: comprises a relatively small portion of the “at-risk”
component for all Executive KMP other than the Managing
Director (who, from 2020, had not received a cash
component).
RReessttrriicctteedd rriigghhttss:: vest in equally weighted tranches on the
first, second, third and fourth anniversary of the grant.
PPeerrffoorrmmaannccee rriigghhttss:: subject to performance testing at two
stages. The initial scorecard performance determines the
amount of the grant. A further performance test relating to
Ilukaʼs relative Total Shareholder Return (TSR) performance
is undertaken at the end of five years (including the annual
scorecard year) with vesting based on a sliding scale.
All components and awards were dependent on the outcomes of
Ilukaʼs annual scorecard (with the performance rights being
subject to further testing as outlined above).
The 2023 executive remuneration framework includes the following
components:
SShhoorrtt tteerrmm iinncceennttiivvee ((SSTTIIPP)):: with awards based on the outcome of the
Ilukaʼs annual scorecard delivered as:
■ 50% cash, and
■ 50% restricted shares delivered in two equal tranches, which are
subject to disposal restrictions over one year (first tranche) and two
years (second tranche).
LLoonngg tteerrmm iinncceennttiivvee ((LLTTIIPP)):: with a maximum opportunity based on a
percentage of each participantʼs fixed remuneration, delivered as
performance rights and measured over four years against Ilukaʼs relative
TSR performance.
The LTIP (which is equivalent to the performance rights under the 2022
EIP) is no longer linked to Ilukaʼs annual scorecard which is consistent
with market practice.
2.2 Snapshot
Remuneration principles
Ilukaʼs Remuneration Principles (outlined below) provide the foundations for how remuneration is structured and awarded to
achieve our purpose of delivering sustainable value to our shareholders.
82
83
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
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 table below provides an overview of the different remuneration components within the Iluka Remuneration
Framework. Further detail on the executive remuneration framework is outlined on the following page.
2.3 Equity incentive plans – more detail
Overview
The following diagram outlines Ilukaʼs executive remuneration framework for FY23.
EElleemmeenntt
FFiixxeedd
rreemmuunneerraattiioonn
PPuurrppoossee
Provide remuneration that is
reflective of the knowledge, skills,
and experience of executives.
22002233 aapppprrooaacchh
Includes base salary and superannuation and is set after considering:
■ Trajectory of the companyʼs growth and key strategic objectives
■ Relevant market comparators and scarcity of talent
■ Executive KMPʼs experience and performance
■ Executive KMPʼs role responsibilities
SShhoorrtt tteerrmm
iinncceennttiivveess ((SSTTIIPP))
Ensure remuneration received by
Executive KMP is closely linked to
the companyʼs annual performance
objectives and short term strategy.
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 split into two components:
■ Cash (50% of the award) – paid following release of the audited financial
statements
■ Restricted shares (50% of the award) – with 50% of the restricted shares
(25% of the STIP award) subject to a disposal restriction of one year from the
grant date (first tranche), with the remaining 50% (25% of the STIP award)
subject to a disposal restriction of two years from the grant date (second
tranche).
LLoonngg tteerrmm
iinncceennttiivveess ((LLTTIIPP))
Ensure remuneration received by
Executive KMP is closely linked to
the companyʼs long term
performance, as well as creating
alignment with returns generated for
our shareholders over the long term.
■ Performance rights – subject to performance testing over a four-year
performance period, measured by Ilukaʼs TSR performance relative to
constituents of the S&P / ASX 200 Resources Index (excluding companies
primarily engaged in the oil and gas sector and non-mining activities) with
vesting based on a sliding scale.
Minimum shareholding requirement: 200% of fixed remuneration (CEO), 100% of fixed remuneration (other Executive KMP)
Pay mix for performance
The following diagram sets out the mix for fixed and at-risk remuneration for Executive KMP during 2023. Remuneration packages
for Executive KMP are weighted towards at-risk remuneration to drive performance for our shareholders.
STIP – key questions and answers
QQuueessttiioonn
Answer
HHooww iiss iitt ppaaiidd??
For all Executive KMP, STIP awards are delivered as 50% cash and 50% restricted shares which are
released from disposal restrictions in equal tranches 1 year following the grant date (first tranche) and
2 years following the grant date (second tranche). Restricted shares are granted at no cost to
participants because they are awarded as remuneration.
HHooww mmuucchh ccaann
ppaarrttiicciippaannttss eeaarrnn
uunnddeerr tthhee SSTTIIPP??
WWhhaatt
ppeerrffoorrmmaannccee
mmeeaassuurreess wwiillll
iinnffoorrmm tthhee SSTTIIPP
aawwaarrddss??
STIP opportunities are expressed as a percentage of fixed remuneration.
STIP Target
STIP Maximum
(% of fixed remuneration)
(% of fixed remuneration)
Managing Director
Other Executive KMP
80%
60%
120%
90%
The Board sets an annual scorecard to focus Ilukaʼs Executive KMP on financial and strategic
imperatives they can influence and are critical to the companyʼs long term sustainability. Performance
objectives for Executive KMP under the 2023 STIP mirrored the previous annual scorecard under the
EIP. These objectives cover:
■
■
■
■
Financial performance (50%);
Production (10%);
Sustainability focusing on people and communities, environment and operating in, and providing
products for, a lower carbon world (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. Section 3 provides a detailed explanation of the specific
targets set in 2023, how they were measured and our assessment of performance.
HHooww aarree SSTTIIPP
aawwaarrddss aarree
ddeetteerrmmiinneedd??
STIP outcomes are calculated based on the following schedule, with a sliding scale operating between
threshold and target, and between target and stretch:
Performance Level
STIP Outcome (% Target)
Threshold
Target
Stretch (maximum)
50%
100%
150%
84
85
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
QQuueessttiioonn
Answer
STIP outcomes are determined by the Board following an assessment of performance measures at the
end of the 2023 performance period and with regard to financial metrics, Ilukaʼs performance and
broader market factors
The number of restricted shares awarded to each participant is based on a face value methodology.
This is determined by dividing the dollar value of the STIP award for FY23 to be deferred by the
Volume Weighted Average Price (VWAP) of Iluka shares traded on the ASX over the five trading days
following the release of the companyʼs FY23 full year results.
Under the STIP, restricted shares are granted in two equal tranches. Each tranche is subject to a
disposal restriction period, which means that participants are not permitted to deal with the shares. For
the first tranche, the disposal restriction is for one year following the grant date, and for the second
tranche, the disposal restriction is for two years following the grant date.
On the vesting date for each tranche, the disposal restrictions are lifted and the participants are
permitted to deal with the shares. There is no re-testing of the performance measures.
Unless the Board determines otherwise, in the event of an Executive KMP resigning or ceasing
employment for cause (e.g. serious or wilful misconduct, negligence etc): all unvested restricted shares
will lapse.
If an Executive KMP ceases employment for any other reason or circumstances (including death, total
and permanent disability, retirement or redundancy): unvested restricted shares will remain on foot
and be subject to the original terms of the award.
The Board has discretion to determine that some or all of the equity restrictions be lifted, in the event
of a takeover or other transaction that in the Boardʼs 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. In addition, restricted shares may be forfeited in certain
circumstances during the disposal restricted period. For example, restricted shares may be forfeited if
a participant acts fraudulently or dishonestly or if there is a material misstatement or omission in the
accounts of a Group company.
In determining whether to exercise discretion, the Board will have regard to all relevant factors at the
time, which may include the performance of the company and the participant over the performance
period and the proportion of the performance period that has elapsed.
Restricted shares carry voting rights and participants are entitled to dividends paid during the disposal
restriction period.
WWhhoo aasssseesssseess
SSTTIIPP
ppeerrffoorrmmaannccee??
HHooww iiss tthhee nnuummbbeerr
ooff rreessttrriicctteedd
sshhaarreess ttoo bbee
ggrraanntteedd ttoo
ppaarrttiicciippaannttss
ddeetteerrmmiinneedd??
WWhhaatt aarree tthhee
rreessttrriiccttiioonnss oonn tthhee
rreessttrriicctteedd sshhaarreess
tthhaatt aarree ggrraanntteedd
uunnddeerr tthhee SSTTIIPP??
WWhhaatt hhaappppeennss oonn
vveessttiinngg ooff
rreessttrriicctteedd sshhaarreess??
WWhhaatt hhaappppeennss iiff
ppaarrttiicciippaannttss lleeaavvee
bbeeffoorree tthhee vveessttiinngg
ddaattee??
WWhhaatt hhaappppeennss oonn
aa cchhaannggee ooff
ccoonnttrrooll??
DDoo aannyy ccllaawwbbaacckk
oorr mmaalluuss
pprroovviissiioonnss aappppllyy??
WWhhaatt ddooeess tthhee
BBooaarrdd ttaakkee iinnttoo
aaccccoouunntt wwhheenn
ccoonnssiiddeerriinngg
wwhheetthheerr ttoo
eexxeerrcciissee
ddiissccrreettiioonn??
DDoo rreessttrriicctteedd
sshhaarreess hhaavvee aannyy
ddiivviiddeenndd aanndd
vvoottiinngg rriigghhttss??
LTIP – key questions and answers
QQuueessttiioonn
Answer
HHooww iiss iitt ppaaiidd??
LTIP awards are granted in the form of performance rights which vest at the end of a 4-year
performance period, subject to performance testing of the relative TSR performance measure.
Performance rights are granted at no cost to participants because they are awarded as remuneration.
HHooww mmuucchh ccaann
ppaarrttiicciippaannttss eeaarrnn
uunnddeerr tthhee LLTTIIPP??
LTIP opportunities are expressed as a percentage of fixed remuneration.
Managing Director
Other Executive KMP
LTIP face value (Maximum)
(% of fixed remuneration)
120%
90%
WWhhaatt ppeerrffoorrmmaannccee
mmeeaassuurreess wwiillll
iinnffoorrmm tthhee LLTTIIPP
aawwaarrddss??
Performance rights are subject a relative TSR performance measure which will be measured over a 4-
year period commencing on 1 January 2023 against the S&P / ASX 200 Resources Index constituents
(excluding companies primarily engaged in the oil and gas sector and non-mining activities). Relative
TSR was selected as the performance measure for the LTIP award because it aligns the interests of
KMP with that of Ilukaʼs shareholders.
Vesting is subject to the sliding scale below:
Performance level to be achieved
Percentage vesting
Below 50th percentile
50th percentile
Between 50th and 75th percentile
75th percentile or above
0%
50%
Sliding scale vesting
100%
HHooww iiss tthhee nnuummbbeerr
ooff rriigghhttss ttoo bbee
ggrraanntteedd ttoo
ppaarrttiicciippaannttss
ddeetteerrmmiinneedd??
WWhhoo aasssseesssseess tthhee
LLTTIIPP
ppeerrffoorrmmaannccee??
WWhhaatt hhaappppeennss oonn
vveessttiinngg ooff tthhee
LLTTIIPP??
WWhhaatt hhaappppeennss iiff
ppaarrttiicciippaannttss lleeaavvee
bbeeffoorree tthhee vveessttiinngg
ddaattee??
WWhhaatt hhaappppeennss oonn
aa cchhaannggee ooff
ccoonnttrrooll??
DDoo aannyy ccllaawwbbaacckk
oorr mmaalluuss
pprroovviissiioonnss aappppllyy??
The number of performance rights awarded to each participant is based on a face value methodology.
This is determined by dividing the dollar value of the LTIP maximum opportunity for FY23 by the
VWAP of Iluka shares traded on the ASX over the five trading days following the release of the
companyʼs FY23 full year results.
Incentive outcomes are determined by the Board following an assessment of the performance
measure at the end of the 4-year performance period. The assessment of the relative TSR performance
measures involves calculation of the relative TSR results by an external remuneration advisor as soon
as practicable after the end of the relevant performance period.
On vesting, participants are generally entitled to one Iluka share for each performance right that vests.
No amount is payable on vesting of performance rights. Any performance rights that do not vest
automatically lapse. There is no re-testing of performance rights.
Unless the Board determines otherwise, in the event of an Executive KMP resigning or ceasing
employment for cause (e.g. serious or wilful misconduct, negligence etc): all unvested performance
rights will lapse.
If an Executive KMP ceases employment for any other reason or circumstances (including death, total
and permanent disability, retirement or redundancy): unvested performance rights will remain on foot
and be subject to the original terms of the award.
The Board has discretion to determine that vesting of some or all of the equity awards be accelerated,
in the event of a takeover or other transaction that in the Boardʼs 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. In addition, performance rights may lapse in certain
circumstances during the performance period. For example, performance rights may lapse if a
participant acts fraudulently or dishonestly or if there is a material misstatement or omission in the
accounts of a Group company.
86
87
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
QQuueessttiioonn
Answer
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In determining whether to exercise discretion, the Board will have regard to all relevant factors at the
time, which may include the performance of the company and the participant over the performance
period and the proportion of the performance period that has elapsed.
No dividends are paid on performance rights prior to vesting. Performance rights do not carry voting
entitlements.
3. 2023 EXECUTIVE KMP REMUNERATION OUTCOMES
3.1 2023 Fixed remuneration outcomes
The Board regularly reviews executive remuneration levels against market comparators (based on a number of factors including
revenue, industry and operational factors including international scope and complexity) to ensure fixed remuneration is set at
market competitive levels. No changes were made to executive KMP fixed remuneration in 2023 and there has been no change
to the Managing Directorʼs fixed remuneration since he commenced in 2016.
EExxeeccuuttiivvee KKMMPP
22002233 FFiixxeedd RReemmuunneerraattiioonn
22002222 FFiixxeedd RReemmuunneerraattiioonn
T OʼLeary
A Stratton
M Blackwell
S Tilka
$1,400,000
$730,000
$730,000
$650,000
$1,400,000
$730,000
$730,000
$650,000
YYeeaarr--oonn--YYeeaarr
%% CChhaannggee
0%
0%
0%
0%
88
89
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
3.2 2023 STIP scorecard and outcomes achieved
The STIP Scorecard is approved by the Board at the commencement of the financial year and focuses executives on business
priorities over the 1-year performance period. Outlined below are the targets that were set for 2023, and the level of performance
achieved.
No specific targets are disclosed in relation to the financial earnings measures of NPAT and ROC due to commercial sensitivity.
Ilukaʼs approach to the marketing and pricing of its products is key to achievement of the companyʼs 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.
IIlluukkaa 22002233 ppeerrffoorrmmaannccee
SSccoorreeccaarrdd mmeeaassuurree
aanndd ttaarrggeett
WWeeiigghhtt
PPeerrffoorrmmaannccee aanndd oouuttccoommee
TThhrreesshhoolldd –– TTaarrggeett –– SSttrreettcchh
FFIINNAANNCCIIAALLSS
5500%%
Group ROC (%)1
20%
Group NPAT1
15%
Unit Cash Costs of
Production $/t2
15%
Target $1,045/t
PPRROODDUUCCTTIIOONN
1100%%
Group Kt Z/R/SR2
Target 610kt
10%
OOuuttccoommee –– 111166%% ooff ttaarrggeett;; 7777%% ooff
mmaaxxiimmuumm aacchhiieevveedd
BETWEEN TARGET AND STRETCH
Iluka generated a strong return on capital of 39.5%. Despite this positive outcome,
the outcome has been assessed as between target and stretch (rather than
stretch) to recognise the impact of the delayed spend on the Eneabba Refinery.
STRETCH
Adjusted NPAT of $315 million was above stretch. 2023 saw strong market
demand in H1 followed by a swift decline in market outlook in H2, driven by the
uncertain macro conditions with China failing to stimulate its property sector and
an extended downturn in the global pigment market. Management focused on
the prioritisation of the value of our products and managing production and
inventory; and delivered product prices that achieved positive returns, despite
being disciplined regarding market supply.
ABOVE THRESHOLD
The Group Unit cash cost of production was $1,110/t. The outcome was between
threshold and target, driven by
labour, fuel,
consumables, power and transport.
inflationary pressures on
OOuuttccoommee –– 00%% ooff ttaarrggeett;; 00%% ooff mmaaxxiimmuumm
aacchhiieevveedd
BELOW THRESHOLD
Overall production of 553kt was below threshold. Operating performance has
been strong across the active mines of Cataby and Jacinth-Ambrosia.
Management made the disciplined decision to pause production at SR1 kiln to
coincide with the planned major maintenance outage at SR2 kiln in response to
market conditions. This action resulted in production performance below
threshold. No adjustment has been made to the outcome as a result of this
change to production settings.
1
2
The targets and outcomes are adjusted to exclude the income derived from Ilukaʼs investment in Deterra Royalties.
Production and Unit Cosh Costs of Production targets and outcomes exclude production related to Zircon in Concentrate.
SSccoorreeccaarrdd mmeeaassuurree
aanndd ttaarrggeett
WWeeiigghhtt
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TThhrreesshhoolldd –– TTaarrggeett –– SSttrreettcchh
SSUUSSTTAAIINNAABBIILLIITTYY
1155%%
Trusted by our People & Communities
OOuuttccoommee –– 111100%% ooff ttaarrggeett;; 7733%% ooff
mmaaxxiimmuumm aacchhiieevveedd
Group Total Recordable
Injury Frequency Rate
(TRIFR)
2.5%
Target Reduction to
4.5
Critical Control
Management
Programme
Implementation
2.5%
Diversity & Inclusion
2.5%
Responsible for the environment
Mine Closure Risk (ha)
Reduction of open
mining area against
plan
Target 216ha of open
mining area
2.5%
Group environmental
level 3 and above
incidents
2.5%
Target of 7 or less
STRETCH
TRIFR of 2.4 was above stretch.
This outcome reflects a 65% reduction in TRIFR from 6.9 in 2022. Management
focused on strong leadership presence in the field, the implementation of
preventative measures including early injury management and critical control
management.
ABOVE TARGET
A total of 10,279 critical control checklists were completed in 2023, with 5,093
field verifications, reflecting a ratio of 2.01 : 1. This underscores the integration
of the critical control management program into daily work practices. The
number of Serious Potential Incidents (SPIs) decreased to 15 in 2023, down from
18 (Iluka Group, excluding SRL) in 2022.
ABOVE THRESHOLD
Diversity & inclusion metrics measured year-on-year improvement in our
employeesʼ perception of workplace inclusion and workforce participation for
Indigenous and Gender Diversity. Overall performance was accessed as above
threshold. Indigenous participation decreased throughout 2023, whilst female
participation marginally increased. Employeeʼs perception of inclusiveness slightly
increased, with an average of 74% of employees perceiving that Iluka offers an
inclusive work environment.
STRETCH
The stretch outcome achieved reflects progress made on our operating mine
sites to optimise their rehabilitation and disturbance activity throughout the
year. A total disturbance of 67ha was achieved across Jacinth Ambrosia and
Cataby in 2023, with a total of 88 ha was rehabilitated at these sites (part of 353
ha rehabilitated across all sites including Balranald and Eneabba).
BELOW TARGET
There were 8 environmental incidents classified as Level 3 or above in 2023 This
is down from 11 in 2022. Five of the incidents involved the unauthorised release
of turbid (sediment laden) water. The remaining incidents related to: vegetation
clearing, the spread of weeds, and one incident was recorded for recurring
lower-level incidents (Level 2).
Operating in and providing products for a lower carbon world
TARGET
Climate Change Work
Programme
2.5%
The 2023 Climate Change Work Program was set against qualitative metrics
relevant for the five initiatives tracked throughout the year. On average, Iluka
met its target. Whilst there were challenges in executing its Cataby solar farm
(now resolved), evaluation of energy efficiency and decarbonisation initiatives,
the concept study for long term alternatives to coal as a reductant in the SR
production process, and commencement of a pilot carbon farming project
progressed in line with expectations.
GGRROOUUPP SSCCOORREECCAARRDD11 OOuuttccoommee –– 9999%% ooff ttaarrggeett;; 6666%% ooff mmaaxxiimmuumm aacchhiieevveedd
1
Financials, Production, Sustainability
90
91
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
3.3 Managing Director individual objectives
Individual strategic objectives were set based on individual KMP accountabilities. Outlined below is the assessment of the
Managing Director (MD)ʼs performance against the Individual Strategy scorecard measure and corresponding EIP outcome:
3.5 STIP awards from 2023 scorecard outcomes
The following table presents the outcomes of the STIP awards attributed to the 2023 performance year. The face value of restricted
shares has been presented, as the fair value will not be determined until the grant is made in March 2024.
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((wweeiigghhtt))
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IINNDDIIVVIIDDUUAALL
((2255%%))
SSTTRRAATTEEGGYY
Advance 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 price and Volume
Settings
Eliminate carbon emissions
where practicable, advance
environmental, sustainability
and governance credentials
of rare earths business and
maintain lowest quartile
carbon competitiveness of
mineral sands business
OOuuttccoommee –– 111188..88%% ooff ttaarrggeett;; 7799..22%% ooff mmaaxxiimmuumm
•
•
Progressed Front End Engineering and Design (FEED) for the Eneabba rare earths
refinery. The challenging project environment in Western Australia has resulted in
increased capital costs. Significant effort to manage the inflationary environment to
ensure the project delivers a value accretive diversification as well as a platform for Iluka
to add further value to Ilukaʼs mineral sands projects.
Ilukaʼs marketing team has engaged extensively with potential customers and has built
awareness of sustainable and reliable supply from Eneabba, leading to high level of
confidence regarding offtake.
Commenced a formal feasibility study to develop and demonstrate rare earth
metallisation capability at a global scale.
Final Investment Decision (FID) taken for Balranald in February 2023.
Given inflationary environment and weaker near-term feedstock demand, capital cost
control has been prioritised over schedule.
Optimising resources within Ilukaʼs portfolio to extend current production profile,
including optimising ilmenite feed blends for the synthetic rutile kilns to extend life.
• Multiple projects within Ilukaʼs development pipeline provide confidence in sustainable
•
•
•
•
production outlook.
•
•
•
•
•
•
Strategy to underpin a 200ktpa base level of synthetic rutile offtake over the 4 year
period commencing 2023 has been appropriate in an uncertain demand environment .
Disciplined approach to production and supply ensures optimised price settings;
discipline demonstrated by responding quickly to market conditions and idling SR1 kiln,
and by respecting the investment rationale (that this asset was to be deployed to satisfy
swing demand). The SR1 kiln has already repaid its capital investment within 12 months
of restarting.
In October 2023, Iluka reached an agreement for the supply of 9MW, from a solar power
facility to be built at Cataby, providing ~30% of Catabyʼs power requirements through a
10 year purchase agreement.
Completed a detailed assessment and prioritised the top 15 decarbonisation near-term
initiatives for the synthetic rutile production through to 2030.
Pilot test work program for using an alternative to coal as a reductant in the synthetic
rutile production process has been scoped, with the work program to be executed in
2024.
In September 2023, Iluka entered into a service agreement to implement a carbon offset
credit project at North Capel, projected to create up to 29,400 ACCUs over a 25 year
period, with planting of trees to commence in April 2024.
The Individual strategy scorecard area outcomes for other Executive KMP ranged from 115 – 122% of target.
3.4 Overall STIP scorecard outcome for the MD
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Group Scorecard
Individual Strategy MD
Outcome
75%
25%
99.0%
74.3%
118.8%
29.7%
OOVVEERRAALLLL MMDD RREESSUULLTT
110044..00%%
EExxeeccuuttiivvee KKMMPP
MMaaxxiimmuumm SSTTIIPP
ooppppoorrttuunniittyy
%% ooff ttaarrggeett
SSTTIIPP eeaarrnneedd
%% ooff
mmaaxxiimmuumm
SSTTIIPP eeaarrnneedd
%% ooff
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SSTTIIPP
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SSTTIIPP
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SSTTIIPP
RReessttrriicctteedd
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T OʼLeary
$1,680,000
104.0%
A Stratton
$657,000
M Blackwell
$657,000
S Tilka
$585,000
103.1%
103.1%
104.8%
69.3%
68.7%
68.7%
69.8%
30.7%
31.3%
31.3%
30.1%
$582,400
$582,400
$1,164,800
$225,760
$225,760
$451,520
$225,760
$225,760
$451,520
$204,432
$204,432
$408,864
3.6 Grant of 2022 EIP restricted rights and performance rights
As outlined in Ilukaʼs 2022 Remuneration Report, EIP restricted rights and performance rights were granted to Executive KMP in
2023 in respect of their 2022 EIP outcome.
Details of the number and value of EIP awards granted to Executive KMP are included in section 6.1 of this Report. The terms of
the EIP awards, including their performance conditions and relevant outcomes were previously disclosed in Ilukaʼs 2022
Remuneration Report.
3.7 Vesting of 2020 EIP performance rights
The performance rights component of the 2020 EIP award has a 5 year performance period ending 31 December 2024 and will
be tested in early 2025. The award will vest on a sliding scale as per the terms of the 2020 EIP (Please see the 2020 Remuneration
Report for further details). As a result, this award is not due to be tested until after the performance period ends on 31 December
2024 and vesting, if any, will be reported in the 2024 Remuneration Report. There are no performance rights awards due to vest
in 2023 due to the change to a five year performance period for the 2020 EIP award creating a ‘gap yearʼ in vesting.
3.8 Summary of realised remuneration paid to executive KMP in 2023
This Section uses non-IFRS information to show the “realised remuneration” received by Executive KMP for 2023. This is a
voluntary disclosure intended to demonstrate the link between the remuneration received by Executive KMP and the performance
of Iluka over 2023. Refer to following Section 3.9 for statutory remuneration disclosure.
EExxeeccuuttiivvee
KKMMPP
T OʼLeary
A Stratton
M Blackwell
S Tilka
FFiixxeedd
RReemmuunneerraattiioonn
$1,400,000
$730,000
$730,000
$650,000
11
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$57,675
$25,727
$25,826
$12,248
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22
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22
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33
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TTOOTTAALL
$2,622,475
$1,207,247
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$1,071,112
1
2
3
Represents car parking for T OʼLeary, A Stratton and M Blackwell, FBT value of car benefit for S Tilka and dividend equivalent payments in relation to vesting of 2020
EIP Tranche 3, 2021 EIP Tranche 2 and 2022 EIP Tranche 1 payable in March 2024 for all KMP.
Relates to outcome from 2023 STIP. Restricted shares vest in 2 tranches in March 2025 and 2026. This represents the face value of the grant being made.
No performance rights were due to vest in 2023. The performance period for the 2020 EIP Performance rights end on 31 December 2024 and will be tested early 2025.
92
93
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
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4. NON-EXECUTIVE DIRECTOR REMUNERATION
4.1 2023 Non-executive Director fee policy
The Board sets the fees for its Non-executive Directors in line with the key objectives of Ilukaʼs Non-Executive Director
remuneration policy set out below. Fees are reviewed annually and are set at a level that is sufficient to attract and retain high
calibre Directors with the skills and experience required to oversee a business of Ilukaʼs similar size and complexity.
Market
competitive
Preserve and
safeguard
independence
and impartiality
Alignment with
shareholders
The Boardʼs policy is to remunerate Non-executive Directors at market-competitive rates to attract and
retain Non-executive Directors of the requisite expertise having regard to:
•
•
•
•
•
•
•
market data;
the size and complexity Ilukaʼs operations; and
the workload and time commitment of Directors.
Non-executive Director remuneration consists of base fees, and additional fees for the Chair and
members of any Board Committee (with the exception of the Nomination Committee).
No element of Non-executive Director remuneration is ‘at-riskʼ (i.e. Directors are not entitled to
any performance-related pay such as share or bonus schemes designed for Executive KMP or
employees) to preserve their independence and impartiality.
Non-executive Directors are required to hold securities in Iluka to create alignment between the
interests of Non-executive Directors and shareholders.
Non-executive Directors are subject to a minimum shareholding requirement equal to 1 times
their annual Board base member fee (exclusive of superannuation). Refer to section 5.2 for
further detail.
4.2 Aggregate fee
The current annual aggregate fee pool for Non-executive Directors is capped at $1.8 million (including statutory contributions),
as approved by shareholders at Ilukaʼs AGM in May 2015.
4.3 2023 fees & other benefits
Non-executive Director fees for 2023 are outlined in the table below. After considering the relevant market data for Non-executive
Directors, the Board determined that there would be no change to the Non-executive Director fees in 2023 from 2022 levels.
22002233 BBooaarrdd aanndd CCoommmmiitttteeee FFeeeess
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Board
Audit and Risk Committee
People and Performance Committee
Nomination and Governance Committee
CChhaaiirr
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22002222
$321,400
$36,100
$30,600
Nil
22002233
$321,400
$36,100
$30,600
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22002222
$128,800
$18,100
$15,350
Nil
22002233
$128,800
$18,100
$15,350
Nil
Sustainability Committee
$30,600
$30,600
$15,350
$15,350
The minimum required employer superannuation contribution up to the statutory maximum is paid into each Non-executive
Directorʼs nominated eligible fund and is in addition to the above fees. The statutory value for superannuation increased in 2023.
Non-executive Directors are not entitled to retirement benefits other than statutory superannuation or other statutory required
benefits.
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94
95
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
4.4 Statutory remuneration table
The fees paid to Non-executive Directors in 2023 are outlined below, prepared in accordance with the requirements of the
Corporations Act 2001 (Cth) and the relevant Australian Accounting Standards.
NNaammee
YYeeaarr
Current Non-executive Directors
BBooaarrdd aanndd
CCoommmmiitttteeee FFeeeess
NNoonn--
MMoonneettaarryy
BBeenneeffiittss
SSuuppeerraannnnuuaattiioonn
SSttaattuuttoorryy TToottaall
5. REMUNERATION GOVERNANCE
5.1 Remuneration governance framework
KMP remuneration decision making is governed by the Iluka remuneration governance framework. The Iluka People and
Performance Committee Charter can be found at www.iluka.com/about-iluka/governance.
R Cole
L Saint
S Corlett
M Bastos
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Former Non-executive Directors
G Martin1
2023
2022
2023
2022
Total fees
A Sutton
$321,400
$275,757
$177,500
$168,757
$162,250
$157,864
$180,250
$175,864
$159,400
$155,043
N/A
$91,829
$1,000,800
$1,025,114
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
N/A
$0
$0
$0
$26,346
$22,523
$19,081
$17,319
$17,442
$16,192
$19,377
$18,037
$17,136
$15,903
N/A
$7,040
$99,382
$97,014
$347,746
$298,280
$196,581
$186,076
$179,692
$174,056
$199,627
$193,901
$176,536
$170,946
N/A
$98,869
$1,100,182
$1,122,128
1
G Martin retired as Chairman on 13 April 2022. Remuneration disclosures for 2022 reflect the period he was a Non-executive Director.
5.2 Minimum shareholding requirement (MSR)
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. See Section 6.3 and 6.4 for details of current KMP
shareholdings.
EExxeeccuuttiivvee KKMMPP The MSR policy for Executive KMP is as below:
MSR policy
Managing Director
Other Executives
% of Fixed Remuneration (year-end)
200%
100%
As of 31 December 2023, all members of the Executive KMP meet the MSR.
NNoonn--eexxeeccuuttiivvee
DDiirreeccttoorrss
The Board is committed to Non-executive Directors acquiring and holding a shareholding within three years of
appointment. The Chairman and other Non-executive Directors are required to hold such a number that the
aggregate value is at least equal to 100% of their annual Board base member fee (exclusive of superannuation)1.
As at 31 December 2023, four of the five Non-executive Directors meet the MSR.
See Section 6 for details of current KMP shareholdings.
1Excludes committee fees and superannuation
96
97
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
5.3 Securities trading policy
SSeeccuurriittyy TTrraaddiinngg
PPoolliiccyy
Directors and employees (including Executive KMP) are prohibited from trading in financial products issued
or created over the companyʼs securities created by third parties, and from trading in associated products
and entering into transactions which operate to limit the economic risk of holdings of unvested Iluka securities
or vested Iluka securities which are subject to a holding lock.
The Security Trading Policy is available on the companyʼs website at www.iluka.com.
5.4 Executive employment agreements
Ilukaʼs 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:
EExxeeccuuttiivvee KKMMPP
PPoossiittiioonn
TTeerrmmiinnaattiioonn NNoottiiccee PPeerriioodd bbyy
IIlluukkaa oorr EEmmppllooyyeeee
TTeerrmmiinnaattiioonn
BBeenneeffiitt
T O'Leary
Managing Director
6 months
6 months
A Stratton
Chief Financial Officer and Head of
Development
6 months
6 months
M Blackwell
Head of Projects and Sales & Marketing
3 months
6 months
S Tilka
General Manager, Australian Operations
3 months
6 months
If the Executive KMPʼs 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 fixed remuneration (inclusive
of any payment made in lieu of notice).
Iluka may terminate Executive KMPʼs employment agreements without notice and without providing payment in lieu of notice
where there is gross misconduct or other grounds for summary dismissal.
5.5 Engagement of external remuneration consultants
External remuneration consultants were engaged by the PPC in 2023 to provide advice and market insights in relation to executive
remuneration arrangements. The remuneration consultants did not provide a ‘Remuneration Recommendationʼ as defined in the
Corporations Act 2011 during the 2023 financial year.
6. ADDITIONAL REMUNERATION DISCLOSURES
6.1 Executive KMP share–based remuneration
Restricted rights
The table below shows the number of restricted rights (RRs) that were granted, vested and forfeited during the 2023 year. The
table also includes additional rights granted to keep participants “whole” in relation to the demergers of Deterra Royalties in
2020 and Sierra Rutile Ltd in 2022. The terms and conditions of previous yearsʼ incentive awards are outlined in the relevant
yearʼs Remuneration Report, available at www.Iluka.com.
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22002233 KKMMPP
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22002233
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2019 EIP RRs3
2020 EIP RRs4,6
2021 EIP RRs5,6
1 March 2020
30 Dec 2020
and 18 Aug
2022
1 March 2021
and18 Aug
2022
13 April 2022
and 18 Aug
2022
42,497
55,038
157,545
-
-
-
(42,497)
33%
(18,347)
25%
(39,394)
25%
2022 EIP RRs
10 May 2023
-
142,502
-
-
AA SSttrraattttoonn
2019 EIP RRs3
2020 EIP RRs4,6
2021 EIP RRs5,6
1 March 2020
30 Dec 2020
and 18 Aug
2022
1 March 2021
and 18 Aug
2022
23 Feb 2022
and 18 Aug
2022
13,221
19,353
36,600
-
-
-
(13,221)
33%
(6,451)
25%
(9,150)
25%
2022 EIP RRs
16 Feb 2023
-
38,910
-
-
MM BBllaacckkwweellll
2019 EIP RRs3
2020 EIP RRs4,6
2021 EIP RRs5,6
1 March 2020
30 Dec 2020
and 18 Aug
2022
1 March 2021
and 18 Aug
2022
23 Feb 2022
and 18 Aug
2022
13,511
19,333
37,634
-
-
-
(13,511)
33%
(6,445)
25%
(9,409)
25%
2022 EIP RRs
16 Feb 2023
-
38,064
-
-
SS TTiillkkaa
2019 EIP RRs3
2020 EIP RRs4,6
2021 EIP RRs5,6
1 March 2020
30 Dec 2020
and 18 Aug
2022
1 March 2021
and 18 Aug
2022
23 Feb 2022
and 18 Aug
2022
5,305
12,356
32,362
-
-
-
(5,305)
33%
(4,119)
25%
(8,091)
25%
2022 EIP RRs
16 Feb 2023
-
32,180
-
-
BBaallaannccee
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22002233
##
-
36,691
118,151
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-
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2200223322
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457,693
197,597
424,273
142,502
1,610,273
-
-
12,902
27,450
-
-
-
142,390
69,477
98,546
38,910
424,897
-
-
12,888
28,225
-
-
-
145,513
69,413
101,335
38,064
415,659
-
-
8,237
24,271
-
-
-
57,135
44,362
87,140
32,180
351,406
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
98
99
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
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##
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##
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##
SS TTiillkkaa
2019 EIP PRs4
2020 EIP PRs5,7
2021 EIP PRs6,7
1 March 2020,
30 Dec 2020
and 18 Aug
2022
1 March 2021
and 18 Aug
2022
23 Feb 2022
and 18 Aug
2022
2022 EIP PRs7
16 Feb 2023
2023 LTIP
1 May 2023
13,325
10,307
32,362
-
-
-
-
-
32,180
56,038
(13,325)
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
2
3
4
5
6
7
Performance rights granted in respect of the 2022 EIP, which form part of the share based payments for 2022 to 2026 inclusive and the 2023 LTIP, which form part of
the share based payments for 2023 to 2026
Fair Value of $8.06 at point of grant for KMP and for MDʼs grant is $8.24 for the 2022 EIP and a Fair Value of $8.45 at point of grant for KMP and $8.78 for MDʼs grant
for the 2023 Executive LTIP
Value at point of vest. Share price at 1 March 2023 was $10.77.
The initial grant date reflects the original date performance rights were allocated in relation to the 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. Additional "Top up"
rights were granted as a result of the Sierra Rutile Ltd demerger, in order to keep participants "whole" and further details can be found in section 7 of this report.
The initial grant date reflects the original performance were allocated in relation to the 2020 EIP award. "Top up" rights were granted in Aug 2022 as a result of the
Sierra Rutile Ltd demerger, in order to keep participants "whole" and further details can be found in section 7 of this report
The initial grant date reflects the original performance were allocated in relation to the 2021 EIP award. "Top up" rights were granted in Aug 2022 as a result of the
Sierra Rutile Ltd demerger, in order to keep participants "whole" and further details can be found in the 2022 Remuneration Report.
The 2020, 2021 and 2022 EIP Performance Rights are subject to a 5 year performance period, tested against a relative total shareholder return test against a
comparator group consisting of constituents of the S&P / ASX 200 Resources Index (excluding companies primarily engaged in the oil and gas sector and non-
mining activities) with vesting based on a sliding scale . The Performance Rights also attract dividend equivalent payments only on those rights that vest and are
subject to cessation of employment, change of control and clawback provisions consistent with those set out in section 2.
VVaalluuee
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143,510
-
-
-
-
$$
-
-
-
-
10,307
32,362
32,180
259,371
56,038
473,521
1
2
3
4
5
6
Value at point of grant, was $10.92 for KMP and $11.30 for MDʼs grant.
Value at point of vest. Share price at 1 March 2023 was $10.77
The initial grant date reflects the original date Restricted Rights 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 details can be found in the 2020 Remuneration Report. Additional “Top up” rights
were granted as a result of the Sierra Rutile Ltd demerger, in order to keep participants “whole” and further details can be found in section 7 of this report.
The initial grant date reflects the original Restricted Right were allocated in relation to the 2020 EIP award. “Top up” rights were granted in Aug 2022 as a result of the
Sierra Rutile Ltd demerger, in order to keep participants “whole” and further details can be found in section 7 of this report
The initial grant date reflects the original Restricted Right were allocated in relation to the 2021 EIP award. “Top up” rights were granted in Aug 2022 as a result of the
Sierra Rutile Ltd demerger, in order to keep participants “whole” and further details can be found in 2022 Remuneration Report.
The 2020 and 2021 EIP Restricted Rights are subject to time based restrictions, vesting in 4 equal tranches over 4 years from grant date. The rights also attract
dividend equivalent payments and are subject to cessation of employment, change of control and clawback provisions consistent with those set out in section 2.
Further detail can be found in the relevant yearʼs Remuneration Report.
Performance rights
The table below shows the number of performance rights (PRs) that were granted, vested and forfeited during the 2023 year
The terms and conditions of previous yearsʼ incentive awards are outlined in the relevant yearʼs Remuneration Report, available
at www.Iluka.com.:
NNuummbbeerr ooff ppeerrffoorrmmaannccee rriigghhttss
VVaalluuee ooff ppeerrffoorrmmaannccee
rriigghhttss
VVeesstteedd // eexxeerrcciisseedd iinnttoo
sshhaarreess iinn 22002233
LLaappsseedd dduurriinngg 22002233
BBaallaannccee
aatt
3311 DDeecc
22002233
GGrraanntteedd iinn
2200223322
##
%%
##
%%
##
AAwwaarrdd
GGrraanntt ddaattee
BBaallaannccee
aatt
11 JJaannuuaarryy
22002233 KKMMPP
ssttaarrtt ddaattee
GGrraanntteedd
dduurriinngg
2200223311
TT OO’’LLeeaarryy
2019 EIP PRs4
2020 EIP PRs5,7
2021 EIP PRs6,7
1 March 2020,
30 Dec 2020
and 18 Aug
2022
1 March 2021
and 18 Aug
2022
13 April 2022
and 18 Aug
2022
80,907
48,923
105,031
-
-
-
2022 EIP PRs7
10 May 2023
2023 LTIP
10 May 2023
-
-
95,001
160,928
AA SSttrraattttoonn
2019 EIP PRs4
2020 EIP PRs5,7
2021 EIP PRs6,7
1 March 2020,
30 Dec 2020
and 18 Aug
2022
1 March 2021
and 18 Aug
2022
23 Feb 2022
and 18 Aug
2022
27,849
17,203
36,600
-
-
-
2022 EIP PRs7
16 Feb 2023
2023 LTIP
1 May 2023
-
-
38,910
62,935
MM BBllaacckkwweellll
2019 EIP PRs4
2020 EIP PRs5,7
2021 EIP PRs6,7
1 March 2020,
30 Dec 2020
and 18 Aug
2022
1 March 2021
and 23 Sep
2022
23 Feb 2022
and 18 Aug
2022
2022 EIP PRs7
16 Feb 2023
2023 LTIP
1 May 2023
28,462
17,185
37,634
-
-
-
-
-
38,064
62,935
(80,907)
100%
-
-
-
-
-
-
-
-
(27,849)
100%
-
-
-
-
-
-
-
-
(28,462)
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
VVaalluuee
vveesstteedd //
eexxeerrcciisseedd
iinnttoo sshhaarreess
iinn 2200223333
$$
871,368
-
-
-
-
299,934
-
-
-
-
306,536
-
-
-
-
$$
-
-
-
-
48,923
105,031
95,001
782,808
160,928
1,412,948
-
17,203
36,600
-
-
-
38,910
313,615
62,935
531,801
-
17,185
37,634
-
-
-
38,064
306,796
62,935
531,801
100
101
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
6.2 Fair value of equity grants
The fair value of each restricted right or performance right and the vesting year for each incentive plan is set out below. The
maximum value of restricted rights and/or performance rights yet to vest is not able to be determined as it is dependent on
satisfaction of service and performance conditions and Ilukaʼs future share price. The minimum value of unvested restricted rights
and/or performance rights is nil.
IInncceennttiivvee PPllaann
GGrraanntt DDaattee
GGrraanntt TTyyppee
2019 EIP2
1 March 2020, 30 Dec
2020 and 18 Aug 2022
2020 EIP3
1 March 2021 and 23 Sep
2022
Restricted rights
Performance rights
Restricted rights
FFaaiirr VVaalluuee ppeerr
RRiigghhtt aatt GGrraanntt
DDaattee $$
11
9.19
6.83
7.47
VVeessttiinngg ((EExxppiirryy)) DDaattee
1 March 2021, 1 March 2022, 1
March 2023
1 March 2023
1 March 2022, 1 March 2023, 1
March 2024, 1 March 2025
6.3 Shareholdings of Executive KMP and their related parties
NNuummbbeerr ooff sshhaarreess
NNaammee
T OʼLeary
A Stratton
M Blackwell
S Tilka
BBaallaannccee hheelldd
aatt
11 JJaannuuaarryy
22002233
11
1,199,937
168,476
109,284
95,867
VVeessttiinngg//
eexxeerrcciissee ooff
sshhaarree rriigghhttss
ppuurrssuuaanntt ttoo
EEIIPP
80,907
27,849
28,462
13,325
AAwwaarrddeedd aass
RReessttrriicctteedd
rriigghhttss
ppuurrssuuaanntt ttoo
EEIIPP
142,502
38,910
38,064
32,180
OOtthheerr
cchhaannggeess
22
-
-26,168
-38,646
-20,901
BBaallaannccee hheelldd
aatt 3311
DDeecceemmbbeerr
22002233
11
1,423,346
209,067
137,164
120,471
MMiinniimmuumm
sshhaarreehhoollddiinngg
mmeett??
33
Yes
Yes
Yes
Yes
1
2
3
Includes shares held directly or through a nominee or agent (e.g. family trust).
Other changes may include those due to personal trades..
As at 31 December 2023 with share price of $6.60.
Performance rights
6.15/6.36
1 March 2025
6.4 Shareholdings of non-executive directors and their related parties
2021 EIP4
2021 EIP (MD)5
23 February 2022
Restricted rights
10.99
1 March 2023, 1 March 2024, 1
March 2025, 1 March 2026
23 February 2022
Performance rights
9.90
1 March 2026
13 April 2022
Restricted rights
12.54
1 March 2023, 1 March 2024, 1
March 2025,
1 March 2026
13 April 2022
Performance rights
11.45
1 March 2026
2022 EIP6
16 February 2023
Restricted rights
10.92
1 March 2024, 1 March 2025, 1
March 2026, 1 March 2027
Performance rights
8.06
1 March 2027
2022 EIP (MD)7
10 May 2023
Restricted rights
11.30
Performance rights
2023 STIP8
March 2024
Restricted shares
2023 LTIP9
1 May 2023
Performance rights
2023 LTIP (MD)10
10 May 2023
Performance rights
8.24
6.60
8.45
8.78
1 March 2024, 1 March 2025, 1
March 2026, 1 March 2027
1 March 2027
1 March 2025 (Tranche 1), 1
March 2026 (Tranche 2)
1 March 2027
1 March 2027
1
2
3
4
5
6
7
8
9
10
The fair value is calculated in accordance with the measurement criteria of Accounting Standard AASB 2 Share Based Payments.
Represents the fair value on the grant date of restricted rights, and fair value of performance rights to be awarded under the 2019 EIP for which the performance period
concluded on 31 December 2019 .
Represents the fair value on the grant date of restricted rights, 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 Directorʼs award under the 2020 EIP for which the performance period concluded on 31 December 2020. Shareholder approval for the
grant of restricted rights and performance rights to the Managing Director was obtained under ASX Listing Rule 10.14 at the 2020 Annual General Meeting.
Represents the share price on the grant date of restricted rights, and fair value of $9.90 for performance rights awarded to Executive KMP.
Represents the share price on the grant date of restricted rights and fair value of $11.45 for the Managing Directorʼs award under the 2021 EIP for which the performance
period concluded on 31 December 2021. Shareholder approval for the grant of restricted rights and performance rights to the Managing Director was obtained under
ASX Listing Rule 10.14 at the 2021 Annual General Meeting
Represents the share price on the grant date of restricted rights, and fair value of $8.06 for performance rights awarded to Executive KMP.
Represents the share price on the grant date of restricted rights and fair value of $8.24 for the Managing Directorʼs award under the 2022 EIP for which the performance
period concluded on 31 December 2022. Shareholder approval for the grant of restricted rights and performance rights to the Managing Director was obtained under
ASX Listing Rule 10.14 at the 2022 Annual General Meeting
Represents the estimated fair value of restricted rights and performance rights to be awarded under the 2023 Executive STIP for which the performance period
concluded on 31 December 2023, calculated using the closing share price of $6.60 at 31 December 2023. The fair value will be determined in 2024 following the release
of the companyʼs 2023 annual results.
Represents the fair value of $8.45 for performance rights awarded to Executive KMP for the 2023 LTIP at 1 May 2023
Represents the fair value of $8.78 for performance rights awarded to Managing Director for the 2023 LTIP at 10 May 2023. Shareholder approval for the grant of
performance rights to the Managing Director was obtained under ASX Listing Rule 10.14 at the 2022 Annual General Meeting
NNaammee
R Cole3
M Bastos3
S Corlett
L Saint
A Sutton
BBaallaannccee hheelldd
aatt
11 JJaannuuaarryy
22002233
37,000
23,664
16,040
18,441
22,000
NNuummbbeerr ooff sshhaarreess
11
NNeett mmoovveemmeenntt
BBaallaannccee hheelldd aatt
3311 DDeecceemmbbeerr 22002233
MMiinniimmuumm sshhaarreehhoollddiinngg
mmeett??
22
-
558
-
1,296
-
37,000
24,222
16,040
19,737
22,000
Yes
Yes
No
Yes
Yes
1
2
3
Non-executive Directors do not receive share based remuneration and movements in their shareholdings reflect on-market trades.
Minimum shareholding requirements changed in January 2022 and this assessment reflects these changes.
Includes shares held indirectly through a nominee or agent (e.g. family trust).
6.5 Other disclosures
On-market share purchases
Iluka issued 1,000,000 shares to satisfy employee incentive schemes in 2023, at an average price of $10.62 per share.
Transactions with key management personnel
During the financial year there were no product or services purchased by Executive KMP from the Group (2023: nil) and there are
no amounts payable at 31 December 2023 (2023: nil).
Loans with KMPs
There have been no loans to Executive KMP during the financial year (2023: nil).
END OF REMUNERATION REPORT
102
103
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
Auditor’s independence
declaration
Auditor’s Independence Declaration
As lead auditor for the audit of Iluka Resources Limited for the year ended 31 December 2023, 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.
This declaration is in respect of Iluka Resources Limited and the entities it controlled during the period.
Financial statements
ILUKA RESOURCES LIMITED ABN 34 0089 675 018
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated statement of profit or loss
Consolidated statement of comprehensive income
Consolidated statement of financial position
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
106
107
108
109
110
111
156
157
Helen Bathurst
Partner
PricewaterhouseCoopers
Perth
21 February 2024
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.
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 21 February 2024. 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.
Iluka Resources Limited
105
31 December 2023
105
ANNUAL REPORT 2023 ILUKA RESOURCES LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
CONTINUING OPERATIONS
Revenue
Other gains/(losses)
Expenses
Equity accounted share of profit - Deterra Resources
Interest and finance charges
Rehabilitation and mine closure provision discount unwind and rate changes
Total finance costs
Profit before income tax
Income tax expense
Notes
2023
$m
2022
$m
4
5
6
23
8
15
1,291.0
1,611.3
43.2
(850.8)
27.3
(7.8)
(31.4)
(39.2)
22.9
(922.7)
29.6
(6.0)
(5.0)
(11.0)
471.5
730.1
11
(128.9)
(212.8)
Profit after income tax for the year from continuing operations
342.6
517.3
DISCONTINUED OPERATIONS
Profit after tax from discontinued operations
Profit for the year, attributable to:
Equity holders of Iluka Resources Limited
Non-controlling interest
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 the ordinary equity holders of the parent
Basic earnings per share
Diluted earnings per share
22
22
19
19
19
19
-
71.2
342.6
342.6
-
588.5
584.5
4.0
Cents
Cents
80.5
79.8
80.5
79.8
116.9
115.9
139.3
138.1
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes.
Profit for the year
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss
Currency translation of foreign entities
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 profit/(loss) 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
22
The above consolidated statement of comprehensive income should be read with the accompanying notes.
Notes
2023
$m
2022
$m
342.6
588.5
17
17
17
22
(2.2)
4.9
-
0.5
3.2
345.8
345.8
-
345.8
-
(17.5)
(2.5)
11.0
(9.0)
579.5
575.5
4.0
504.3
71.2
Iluka Resources Limited
106
31 December 2023
Iluka Resources Limited
107
31 December 2023
106
107
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
ASSETS
Current assets
Cash and cash equivalents
Receivables
Inventories
Derivative financial instruments
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Inventories
Investments accounted for using the equity method - Deterra
Financial assets at fair value through profit or loss - Northern Minerals
Deferred tax assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Payables
Current tax payable
Derivative financial instruments
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
Notes
2023
$m
2022
$m
15
13
14
21
9
10
14
23
22
12
21
8
10
15
8
10
16
17
17
364.9
283.1
662.7
2.6
1,313.3
1,333.7
18.4
142.0
446.3
15.0
62.1
2,017.5
521.7
275.1
543.3
-
1,340.1
1,116.0
22.9
18.3
449.5
20.0
35.0
1,661.7
3,330.8
3,001.8
177.0
39.6
-
62.7
8.4
287.7
139.5
729.3
15.8
884.6
143.7
135.3
4.4
81.5
8.9
373.8
33.0
679.6
20.6
733.2
1,172.3
1,107.0
2,158.5
1,894.8
1,143.2
21.4
993.9
2,158.5
1,129.6
16.6
748.6
1,894.8
Attributable to owners of
Iluka Resources Limited
Share
capital
$m
Other
reserves
$m
Retained
earnings
$m
Notes:
Balance at 1 January 2022
Profit for the period
Other comprehensive loss
Total comprehensive income
Transfer of FCTR on demerger
17
17
17
Transactions with owners in their capacity as owners:
16
Shares issued
Issue of treasury shares, net of tax
Transfer of shares to employees, net of tax
Share-based payments, net of tax
Dividends paid
Transactions with non-controlling interests
Transfer of loss in ownership changes
Return of capital - SRL demerger
18
17
17
22
Balance at 31 December 2022
1,148.3
-
-
-
-
8.1
(5.8)
10.0
-
10.0
-
-
(41.0)
(18.7)
1,129.6
31.0
-
(20.0)
(20.0)
(17.5)
-
-
(10.0)
11.0
-
5.4
16.7
-
23.1
16.6
413.9
584.5
11.0
595.5
17.5
-
-
-
-
(261.6)
-
(16.7)
-
(278.3)
748.6
Total
$m
1,593.2
584.5
(9.0)
575.5
-
8.1
(5.8)
-
11.0
(251.6)
5.4
-
(41.0)
(273.9)
1,894.8
NCI
$m
1.4
4.0
-
4.0
-
-
-
-
-
-
(5.4)
-
-
(5.4)
-
Balance at 1 January 2023
Profit for the period
Other comprehensive loss
Total comprehensive income
Notes:
17
17
Transactions with owners in their capacity as owners:
16
Shares issued
Issue of treasury shares, net of tax
Transfer of shares to employees, net of tax
Share-based payments, net of tax
Dividends paid
18
Attributable to owners of
Iluka Resources Limited
Share
capital
$m
Other
reserves
$m
Retained
earnings
$m
Total
$m
NCI
$m
1,129.6
-
-
-
10.6
(7.8)
10.0
-
0.8
13.6
1,143.2
16.6
-
2.7
2.7
-
-
(10.0)
12.1
2.1
21.4
748.6
342.6
0.5
343.1
1,894.8
342.6
3.2
345.8
-
-
-
-
(97.8)
(97.8)
993.9
10.6
(7.8)
-
12.1
(97.0)
(82.1)
2,158.5
-
-
-
-
-
-
-
-
-
-
-
Total
equity
$m
1,594.6
588.5
(9.0)
579.5
-
8.1
(5.8)
-
11.0
(251.6)
-
-
(41.0)
(279.3)
1,894.8
Total
equity
$m
1,894.8
342.6
3.2
345.8
10.6
(7.8)
-
12.1
(97.0)
(82.1)
2,158.5
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Balance at 31 December 2023
Iluka Resources Limited
108
31 December 2023
Iluka Resources Limited
109
31 December 2023
108
109
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR-ENDED 31 DECEMBER 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Operating cash flow
Interest received
Interest paid
Income taxes paid
Exploration expenditure
Net cash inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Sale of property, plant and equipment
Payment for investment in listed securities - Northern Minerals
Dividends received - Deterra Royalties
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from borrowings
Dividends paid
Debt refinance costs
Principal element of lease payments
Settlement of put option - SRL demerger
Net cash outflow inflow 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 associated with SRL (demerged)
Cash and cash equivalents at year-end
Notes
2023
$m
2022
$m
1,278.1
(931.4)
346.7
18.5
(1.3)
(255.5)
(18.8)
89.6
(281.4)
10.1
-
30.5
(240.8)
100.0
(97.0)
-
(8.4)
-
(5.4)
1,674.7
(963.5)
711.2
6.2
(1.5)
(104.1)
(10.3)
601.5
(152.6)
0.1
(20.0)
35.7
(136.8)
40.7
(146.8)
(7.7)
(8.8)
(11.5)
(134.1)
(156.6)
330.6
521.7
(0.2)
-
364.9
294.8
1.9
(105.6)
521.7
29
22
23
15
18
10
22
22
15
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes
BASIS OF PREPARATION
Reporting entity
1.
Basis of preparation
2.
KEY NUMBERS
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Segment information
Revenue
Other gains/(losses)
Expenses
Impairment of assets
Provisions
Property, plant and equipment
Leases
Income tax
Deferred tax
Receivables
Inventories
CAPITAL
15.
16.
17.
18.
19.
Net cash and finance costs
Contributed equity
Reserves and retained earnings
Dividends
Earnings per share
RISK
20.
21.
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.
Contingent liabilities
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
112
112
114
117
118
119
121
122
124
126
127
129
130
131
132
134
135
136
137
138
140
142
146
148
148
149
150
151
152
153
154
155
155
Iluka Resources Limited
110
31 December 2023
Iluka Resources Limited
111
31 December 2023
110
111
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
BASIS OF PREPARATION
1. REPORTING ENTITY
Iluka Resources Limited (Company or parent entity) is a for-profit public company listed on the Australian Securities
Exchange Limited (ASX) incorporated in Australia and is primarily involved in mineral sands and rare earths exploration,
project development, mining operations, processing and marketing.
The consolidated financial statements of the Company comprise the Company and its controlled entities (‘Consolidated
Group’ or ‘Group’) and the Consolidated Entity’s interest in associates.
2. BASIS OF PREPARATION
These general purpose financial statements have been prepared in accordance with applicable Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.
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. The consolidated financial statements are presented in Australian
dollars, which is the Company's functional and presentation currency.
New and amended standards adopted by the Group, and their related impacts on the financial statements (if any), are
detailed in note 32.
a) Principles of consolidation
Subsidiaries
Subsidiaries are all entities (including structured entities) controlled by the Company. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity.
The consolidated financial statements are prepared by consolidating the financial statements of all entities within the Group
as defined in AASB 10 Consolidated Financial Statements. 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.
Associates
Associates are 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.
2. BASIS OF PREPARATION(CONTINUED)
a) Principles of consolidation (continued)
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) 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, unless otherwise
indicated.
c) 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 related actual results. This note provides an overview of areas that
involve a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted if estimates
or assumptions significantly differ from actual outcomes. Detailed information about each of these estimates and
judgements is included in other notes together with information about the basis of calculation for each affected line item in
the financial statements.
The areas involving significant estimates or judgements are:
Impairment of assets
Rehabilitation and mine closure provisions
Net realisable value and classification of product inventory
Note
7
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 lower 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.
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
KEY NUMBERS
3. 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 Kilns
1 and 2, located in Western Australia.
Rare Earths (RE) comprises the Eneabba Rare Earths Refinery currently being constructed in Western Australia and
associated feasibility studies alongside Phase 1 and 2 of the Eneabba development, and the Group's investment in
Northern Minerals Limited.
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; the rutile-rich deposit at West
Balranald (New South Wales), and certain idle assets located in Australia (Murray Basin).
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 2023 (2022: $nil).
b) Segment results
2023
Total segment sales of critical minerals
Total segment freight revenue
Depreciation and amortisation expense
Changes in rehabilitation recognised in profit or loss
Total segment result
Segment assets
Segment liabilities
Segment capital expenditure
Additions to non-current segment assets
JA/MW
$m
C/SW
$m
RE
$m
US/MB
$m
Total
$m
611.8
31.1
(52.2)
7.9
368.1
734.9
323.3
15.8
16.0
626.5
21.6
(111.7)
(1.2)
221.6
1,236.3
432.8
90.9
149.3
-
-
-
-
-
212.0
221.7
139.1
148.3
-
-
(0.9)
(2.4)
4.8
243.0
107.9
69.0
69.0
1,238.3
52.7
(164.8)
4.3
594.5
2,426.2
1,085.7
314.8
382.7
3. SEGMENT INFORMATION (CONTINUED)
b) Segment results (continued)
2022
Total segment sales of critical minerals
Total segment freight revenue
Depreciation and amortisation expense
Changes in rehabilitation recognised in profit or loss
Total segment result
Segment assets
Segment liabilities
Segment capital expenditure
Additions to non-current segment assets
JA/MW
$m
C/SW
$m
RE
$m
US/MB
$m
Total
$m
778.9
58.6
(49.3)
3.0
462.6
661.3
344.9
15.8
33.8
753.5
28.9
(91.4)
(4.9)
363.0
1,025.1
359.3
60.7
97.6
-
-
-
-
-
113.6
81.1
42.2
93.3
0.4
-
(0.8)
(9.2)
(17.1)
172.0
139.0
20.0
20.0
1,532.8
87.5
(141.5)
(11.1)
808.5
1,972.0
924.3
138.7
244.7
Critical minerals 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
2023
$m
402.8
237.7
341.8
252.6
3.4
1,238.3
2022
$m
524.3
253.5
343.9
337.8
73.3
1,532.8
Revenue of $202.8 million and $105.2 million was derived from two external customers of the mineral sands segments,
which individually account for greater than 10% of the total segment revenue (2022: revenues of $294.1 million and $150.8
million from two external customers).
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
3. SEGMENT INFORMATION (CONTINUED)
b) Segment results (Continued)
Segment result is reconciled to profit before income tax as follows:
Segment result
Interest income
Marketing and selling
Corporate and other costs
Revaluation loss on investment in Northern Minerals
Projects, innovation and exploration
Depreciation
Interest and finance charges
Net foreign exchange gain
Share of profits in associate
Profit before income tax from continuing operations
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
Total liabilities as per the balance sheet
2023
$m
594.5
18.4
(13.1)
(79.7)
(5.0)
(61.2)
(3.0)
(4.6)
(2.1)
27.3
471.5
2023
$m
2,426.2
31.3
364.9
62.1
446.3
3,330.8
1,085.7
47.0
39.6
1,172.3
2022
$m
808.5
7.4
(11.6)
(73.9)
-
(37.0)
(2.9)
(4.5)
14.5
29.6
730.1
2022
$m
1,972.0
23.6
521.7
35.0
449.5
3,001.8
924.3
47.4
135.3
1,107.0
4. REVENUE
CONTINUING OPERATIONS
Sales revenue
Sale of goods
Freight revenue
a) Sale of mineral sands
Notes:
4(a)
4(b)
2023
$m
2022
$m
1,238.3
52.7
1,291.0
1,523.8
87.5
1,611.3
The Group earns revenue by mining, processing, and subsequently selling mineral sands (including zircon, rutile, synthetic
rutile and ilmenite) 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 Australian Dollars 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 $nil million relating to contracts in place at the end of the prior year (2022: $3.8 million), and
excludes $0.6 million which has been deferred at the end of the current year in relation to unfulfilled shipping obligations
(2022: $nil million).
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
5. OTHER GAINS/(LOSSES)
Interest income
Foreign exchange (losses)/gains, net
Gain on sale of fixed assets
a)
Interest income
Notes:
5(a)
5(b)
5(c)
2023
$m
18.4
(2.1)
26.9
43.2
2022
$m
7.4
14.5
1.0
22.9
Interest income is recognised in profit or loss using the effective interest method, net of capitalised borrowing costs.
b) Foreign exchange (losses)/gains
Transactions in foreign currencies are translated into Australian dollars using the spot exchange rate when the transaction
occurs. 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. Non-monetary items that are measured based on historical
cost in a foreign currency are not re-translated.
Foreign currency differences are recognised in profit or loss (and included in other gains/(losses)) to the extent that they
are not part of a designated hedging relationship or form part of the net investment in a foreign operation (notes 17 and 21,
respectively).
c) Gain on sale of fixed assets
Iluka previously operated mineral sands mining and processing facilities in the US, including those in Virginia, which ceased
operations in 2015. Subsequent efforts have been focused on rehabilitation and reclamation.
During the current reporting period, the Group sold certain assets (with a $nil carrying value) together with related
rehabilitation obligations in Virginia of $16.6 million for cash proceeds of $10.3 million.
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
By-product costs
Depreciation (idle, corporate and other)
Idle capacity charges
Rehabilitation (credits) or costs for closed sites
Government royalties
Marketing and selling costs
Corporate and other costs
Projects, exploration and innovation
Revaluation on investments - Northern Minerals
Net loss on sales of assets
Notes:
2023
$m
2022
$m
6(a)
6(b)
6(c)
6(d)
6(e)
6(f)
6(g)
605.2
156.4
(173.6)
(51.7)
536.3
11.2
11.4
20.1
(4.3)
47.1
80.1
79.7
61.2
5.0
3.0
850.8
508.3
141.1
(29.1)
(9.9)
610.4
12.7
3.3
12.5
11.1
47.2
116.5
72.0
37.0
-
-
922.7
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 royalties which are reported separately.
b) Cost of goods sold
Cost of goods sold is the inventory value of each tonne of finished zircon, rutile, synthetic rutile and ilmenite sold. All
production is added to inventory at cost, which includes direct costs and a 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) By-product costs
By-product costs include the costs of processing iron concentrate, processing activated carbon, monazite treatment, wet
high intensity magnetic separation (WHIMS), and other transport costs.
d)
Idle capacity charges
Idle capacity charges reflect ongoing costs incurred during periods of no or restricted production.
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
6. EXPENSES (CONTINUED)
e) Rehabilitation costs for closed sites
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 $33.4 million (2022: $25.1 million) of centralised support costs to serve the operations, including resource
development and mine planning, procurement and logistics, information technology, human resources support, and
insurance premiums.
g) Projects, exploration and innovation
These costs relate to activities associated with developing our resources, including exploration and mine planning.
h) Other required disclosures
Expenses also include the following:
Employee benefits (excluding share-based payments)
Share-based payments
Exploration expenditure
Expenses for short term, low value leases and leases with variable payments
Inventory NRV write-downs/(reversals) - finished goods and WIP
2023
$m
195.0
16.8
10.6
2.0
0.5
2022
$m
194.1
15.7
10.9
0.8
0.9
7.
IMPAIRMENT OF ASSETS
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 all CGUs for the presence of impairment indicators at the reporting date, including those which may
have arisen due to the economic impacts of ongoing conflicts, climate change, and the COVID-19 pandemic.
Impairment indicators were found to be present in the Cataby/South West CGU, predominantly due to uncertain market
conditions resulting in the decision to idle the SR1 kiln through 2024, and increases in sustaining capital expenditure for the
next phase of Cataby development.
The Group did not note any conditions that suggest previously recognised impairments can be reversed.
b)
Impairment testing – Cataby/South West CGU
The Cataby/South West CGU has a net asset carrying value of $802.9 million at 31 December 2023 (2022: $665.1 million),
including $608.4 million of working capital and $373.4 million of rehabilitation provision liabilities.
In assessing impairment, the Group is required to determine the recoverable amount as the higher of the value in use, being
the net present value of expected future cashflows of the CGU in its current condition, and the fair value less cost of disposal
(FVLCD). The Group has used the FVLCD approach to assess the recoverable amount of the Cataby/South West CGU.
The Group estimated the recoverable amount of the Cataby/South West CGU, and determined that it exceeds its carrying
amount. Accordingly, no impairment is required to be recognised in the current reporting period.
Key estimate: recoverable amount calculations
In determining the recoverable amount of the Cataby/South West CGU, estimates have been made regarding the present
value of future cash flows in the absence of quoted market prices.
These estimates require significant levels of judgement and are subject to risk and uncertainty that may be beyond the
control of the Group, including political risk, climate change risk, and other global uncertainty risks.
The estimates of discounted future cash flows used in determining the Cataby/South West CGU recoverable amount are
based on significant assumptions including:
•
•
•
•
•
•
estimates of the quantities of mineral reserves and ore resources for which there is a high degree of confidence
of economic extraction and the timing of access to these reserves and ore resources;
future production levels and the ability to sell that production;
future product prices and exchange rates, determined using external market analyst forecasts,
successful development and operation of new mining areas consistent with forecasts and life of mine plans;
future cash costs of production (including those related to compliance with the safeguard mechanism
associated with greenhouse gas emissions by the CGU’s synthetic rutile kilns), sustaining capital expenditure,
rehabilitation and mine closure; and
an asset specific discount rate applicable to the CGU.
Given the nature of the Group’s mining activities, changes in assumptions upon which these estimates are based may
give rise to material adjustments. This could lead to recognition of new impairment charges in the future, or the reversal
of impairment charges already recognised.
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ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
8. PROVISIONS
Current
Rehabilitation and mine closure
Employee benefits - long service leave
Workers compensation and other provisions
Non-current
Rehabilitation and mine closure
Employee benefits - long service leave
Retirement benefit obligations
Notes:
8(a)
8(b)
8(a)
8(b)
28
2023
$m
45.7
14.8
2.2
62.7
716.8
4.8
7.7
729.3
2022
$m
66.8
13.4
1.3
81.5
668.6
3.4
7.6
679.6
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 expenses to settle the obligation and a reliable estimate can be made of the amount of the
obligation.
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
Amounts spent during the year
Rehabilitation and mine closure provision unwind
Change in provisions - additions to property, plant and equipment
Change in provisions - profit or loss impact of closed sites - continuing operations
Change in provisions - sale of assets
Foreign exchange rate movements
Balance at 31 December
Notes:
15(d)
5(c)
2023
$m
735.4
(41.9)
31.4
57.4
(4.3)
(16.6)
1.1
762.5
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 total rehabilitation and mine closure provision of $762.5 million (2022: $735 million) includes $233.3 million (2022:
$253.1 million) for assets no longer in use. Changes in the expected rehabilitation liability that relate to closed sites are
recognised as a credit to or expense in profit or loss (refer to note 6).
Open site rehabilitation liabilities increased by $57.4 million in the current reporting period (2022: increased by $122.2
million), predominantly due to an increase in disturbed area and higher earth moving rates at Cataby. An increased mining
footprint at Eneabba Rare Earths also contributed, due to progress on construction of the Eneabba Rare Earths Refinery.
Jacinth-Ambrosia and Cataby comprise $191.6 million and $268.8 million of the rehabilitation provision balance,
respectively.
8. PROVISIONS (CONTINUED)
a) Rehabilitation and mine closure (continued)
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 and the US are remeasured at each reporting date 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.
A change of one percent in only the discount rate used to calculate rehabilitation and mine closure provisions would
result in a decrease to their closing balance of $71.2 million. Of this amount, $52.3 million would be recognised as a
decrease in rehabilitation assets for open sites, and $18.9 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.
Iluka Resources Limited
122
31 December 2023
Iluka Resources Limited
123
31 December 2023
122
123
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
9. PROPERTY, PLANT AND EQUIPMENT
At 1 January 2022
Cost
Accumulated depreciation¹
Opening written down value
Additions
Depreciation
Exchange differences²
Impairment reversal - SRL
Demerger of SRL
Closing written down value
At 31 December 2022
Cost
Accumulated depreciation¹
Closing written down value
Plant
Year ended 31 December 2023
Additions
Disposals
Depreciation
Exchange differences²
Closing written down value
Plant
At 31 December 2023
Cost
Accumulated depreciation¹
Closing written down value
Land &
buildings
$m
311.8
(175.2)
136.6
3.6
(1.8)
3.3
-
(1.1)
140.6
196.8
(56.2)
140.6
12.1
(4.6)
(1.8)
0.1
146.4
187.7
(41.3)
146.4
Plant,
machinery &
equipment
$m
Mine
reserves &
development
$m
2,482.7
(2,116.2)
366.5
100.7
(65.7)
0.2
-
(2.8)
398.9
2,120.4
(1,721.5)
398.9
284.0
(0.6)
(78.4)
0.3
604.2
1,288.9
(793.3)
495.6
150.1
(70.5)
0.2
24.6
(34.6)
565.4
1,122.9
(557.5)
565.4
88.3
(0.1)
(80.9)
(0.3)
572.4
2,302.9
(1,698.7)
604.2
1,211.0
(638.6)
572.4
Exploration &
evaluation
$m
35.5
(24.7)
10.8
0.1
-
0.2
8.7
(8.7)
11.1
27.2
(16.1)
11.1
-
(0.1)
-
(0.3)
10.7
27.2
(16.5)
10.7
Total
$m
4,118.9
(3,109.4)
1,009.5
254.5
(138.0)
3.9
33.3
(47.2)
1,116.0
3,467.3
(2,351.3)
1,116.0
384.4
(5.4)
(161.1)
(0.2)
1,333.7
3,728.8
(2,395.1)
1,333.7
1 Accumulated depreciation includes cumulative impairment charges
2 Exchange 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.
a) Property, plant and equipment
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 $57.4
million (2022: $96.8 million) relating to rehabilitation.
9. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
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)
(ii)
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
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
$318.5 million, $49.2 million and $0.9 million, respectively, relating to assets under construction which are currently not
being depreciated (including those related to the Rare Earths operating segment) as the assets are not ready for use (2022:
$60.5 million, $48.5 million and $0.9 million, respectively).
In addition, within property, plant and equipment, excluding exploration and land assets, are amounts totalling $99.1 million
which have not been depreciated in the year as mining of the related area of interest has not yet commenced (2022: $99.1
million).
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) Capitalised borrowing costs
Refer to note 15 for details on capitalised borrowing costs.
g)
Impairment of PPE
Refer to note 7 for details on impairment testing.
Iluka Resources Limited
124
31 December 2023
Iluka Resources Limited
125
31 December 2023
124
125
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
10.LEASES
10. LEASES (CONTINUED)
a) Amounts recognised in the statement of financial position
b) Amounts recognised in the statement of profit or loss (continued)
Right-of-use assets
Buildings
Plant, machinery and equipment
Lease Liabilities
Current
Non-current
2023
$m
7.0
11.4
18.4
8.4
15.8
24.2
2022
$m
7.2
15.7
22.9
8.9
20.6
29.5
Additions to the right-of-use assets during the reporting period were $1.6 million (2022: $1.7million). Right-of-use assets are
reflected net of incentives received. The maturity analysis of lease liabilities is included in note 19(d).
b) Amounts recognised in the statement of profit or loss
Amortisation charge of right-of-use assets
Buildings
Plant, machinery and equipment
Borrowing costs
Expenses relating to short term leases, low value leases and leases with variable
payments
2023
$m
1.0
5.7
6.7
0.8
2.0
2022
$m
1.0
6.3
7.3
1.0
0.8
Payments for the principal element of leases of $8.4 million (2022: $8.8 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 4.8% (2022: 4.2%).
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.
Right-of-use assets
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 previous years
2023
$m
158.9
(26.6)
(3.4)
128.9
2022
$m
202.0
10.7
0.1
212.8
Iluka Resources Limited
126
31 December 2023
Iluka Resources Limited
127
31 December 2023
126
127
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
11. INCOME TAX EXPENSE (CONTINUED)
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% (2022: 30%)
Tax effect of amounts not deductible (taxable) in calculating taxable income:
Equity accounted share of profit - Deterra
Non-assessable income
Remeasurement loss on Northern Minerals
Non-deductible expenses
Other items
(Gains)/losses not recognised by overseas operations
Demerger distribution
Difference in overseas tax rates
(Over)/under provision in prior years
Income tax expense
2023
$m
471.5
-
471.5
2022
$m
730.1
71.2
801.3
141.5
240.4
(8.2)
-
1.5
0.1
0.4
(3.0)
-
132.3
-
(3.4)
128.9
(8.9)
(0.5)
-
1.8
(25.8)
1.2
4.5
212.7
-
0.1
212.8
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 and federal tax losses are not
considered probable. Unrecognised US state and federal tax losses for which no deferred tax asset has been recognised
are US$679.4 million (equivalent to $995.2 million) at 31 December 2023 (2022: US$562.2 million, equivalent to $830.2
million).
Unused capital losses for which no deferred tax asset has been recognised are approximately $101.5 million (2022: $81.1
million) (tax at the Australian rate of 30%: $30.4 million (2022: $24.3 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.
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
2023
$m
(2.1)
(0.2)
(2.3)
2022
$m
0.7
(3.3)
(2.6)
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.
12. DEFERRED TAX
Deferred tax asset:
The balance comprises temporary differences attributable to:
Employee provisions
Rehabilitation provisions
Lease liabilities
Other
Gross deferred tax assets
2023
$m
11.2
219.4
7.0
17.0
254.6
2022
$m
9.0
204.8
8.9
9.3
232.0
Amount offset from deferred tax liabilities pursuant to set-off provision
Net deferred tax assets
(192.5)
62.1
(197.0)
35.0
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/(charged) to the income statement
Over provision in prior years
Charged directly to equity
Transfers
Balance at 31 December
Deferred tax policy
(171.2)
(14.0)
(0.3)
(5.3)
(0.4)
(1.3)
(192.5)
192.5
-
35.0
26.6
4.5
(4.0)
-
62.1
(168.9)
(17.4)
(1.6)
(8.3)
(0.5)
(0.3)
(197.0)
197.0
-
39.1
(10.7)
3.4
3.5
(0.3)
35.0
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.
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.
Iluka Resources Limited
128
31 December 2023
Iluka Resources Limited
129
31 December 2023
128
129
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
13.RECEIVABLES
Trade receivables
Other receivables
Prepayments
2023
$m
254.8
12.0
16.3
283.1
2022
$m
248.0
8.0
19.1
275.1
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 1). 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 58 days of
the invoice being issued (2022: 53 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 2023 (2022: 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 of $nil are included in other expenses (2022: $nil).
There was $4.0 million overdue at balance date (2022: $18.8 million), of which $nil million is more than 28 days overdue
(2022: $nil 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. Sold trade receivables are not derecognised because
the majority of the risks and rewards of ownership, including credit risk, are retained by the Group. Instead, the amount of
sold receivables is reflected as a continuing involvement asset (included in other receivables) with a corresponding
continuing involvement liability (included in payables) for the same amount. Trade receivables include $nil of sold trade
receivables at the reporting date (2022: $nil million).
b) Credit risk
At 31 December 2023 the trade receivables balance was $254.8 million, with $63.4 million secured by letters of credit. As a
result, the Group had $191.4 million of uninsured receivables at the reporting date (2022: $209.0 million uninsured
receivables). 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
Consumables stores
Total current inventories
Non-Current
Finished goods
Work in progress
Total non-current inventories
Total Inventories
2023
$m
194.0
412.7
56.0
662.7
16.9
125.1
142.0
2022
$m
304.8
205.6
32.9
543.3
-
18.3
18.3
804.7
561.6
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 $nil (2022: $1.2 million) is carried at net realisable value, with all other finished goods and
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.
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 $0.5 million were reversed for work in progress or finished goods (2022: $0.9
million write-down reversal). If finished goods future selling prices were 5% lower than expected, an inventory write-down
of $0.1 million would be required at 31 December 2023 (2022: $0.1 million).
Inventory of $142.0 million (2022: $18.3 million) was classified as non-current as it is not expected to be processed and
sold within 12 months of the balance sheet date.
Iluka Resources Limited
130
31 December 2023
Iluka Resources Limited
131
31 December 2023
130
131
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
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)
EFA loan facility
Deferred borrowing costs
Total interest-bearing liabilities
2023
$m
129.7
235.2
364.9
(145.9)
6.4
(139.5)
2022
$m
116.7
405.0
521.7
(40.7)
7.7
(33.0)
Net cash
225.4
488.7
a) Cash and cash equivalents
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 5.3% (2022: 0.1% and 4.4%) on Australian and foreign
currency denominated deposits.
b)
Interests-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.
The Group has access to the following facilities at the reporting date:
(i) Multi Option Facility Agreement (MOFA)
The Multi Optional Facility Agreement comprises a series of unsecured committed five year bilateral revolving credit
facilities with several domestic and foreign institutions. No amounts were drawn down against the MOFA at the current or
comparative reporting dates. The Group cancelled $70 million of the MOFA prior to its expiry during the current reporting
period. Undrawn MOFA facilities at 31 December 2023 were $570.0 million (2022: $640.0 million). The table below details
the facility expiries:
$m
At 31 December 2023
At 31 December 2022
Total Facility
570
640
2024
-
70
Facility Expiry
2025
-
-
2026
-
-
2027
570
570
15.NET CASH AND FINANCE COSTS (CONTINUED)
b)
Interests-bearing liabilities (continued)
(ii) Export Finance Australia
The Group (via Iluka Eneabba Pty Ltd, a special purpose entity) has access to funds for construction and commissioning of
the Eneabba Rare Earths Refinery (ERER) under a risk sharing agreement with the Australian Government (as part of its
Critical Minerals Facility initiative). The facility is administered by Export Finance Australia (EFA).
The total facility amounts to $1,250 million, is non-recourse to Iluka, is secured against the ERER asset, and has a variable
interest rate equal to the BBSY + 3% with a total term of up to 16 years expiring in 2038. Facility repayments commence on
project completion. In addition to the facility, the Group will contribute cash equity of $200 million (provided on a 1:3 ratio
basis with initial loan drawdowns).
At 31 December 2023, $145.9 million was drawn against the facility, leaving $1,104.1 million undrawn (2022: $40.7 drawn,
$1,209.3 million undrawn).
c)
Interest rate exposure
As at the reporting date, $145.9 million was drawn down (2022: $40.7 million) on the EFA facility and is subject to an effective
weighted average floating interest rate of 7.2% (2022: 6.3%). 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
Amortisation of deferred borrowing costs
Bank fees and similar charges
Lease borrowing costs
Rehabilitation and mine closure provision discount unwind
Rehabilitation provision discount rate changes
Total finance costs
(i) Capitalisation of borrowing costs
2023
$m
0.6
0.9
5.5
0.8
31.4
-
39.2
2022
$m
0.5
0.4
4.1
1.0
15.3
(10.3)
11.0
The Group capitalises borrowing costs incurred on the EFA facility to the extent they are incurred for the construction of the
Eneabba Rare Earths Refinery. Borrowing costs comprise interest and related amortisation of deferred borrowing costs on
the EFA facility, net of interest income. The Group capitalised $4.4 million to the cost of the Eneabba Rare Earths Refinery
during the current reporting period (2022: $0.1 million), which is included in additions to property, plant and equipment.
(ii) Amortisation of deferred borrowing costs
Fees paid on establishment of borrowing facilities are recognised as transaction costs and amortised over the shorter of
the loan term or expected repayment (or modification) date through profit or loss to the extent they are not capitalised to
qualifying assets.
(iii) 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).
(iv) Rehabilitation provision discount rate changes
Differences arising from changes to the discount rates used to calculate rehabilitation provisions are recognised in profit or
loss as finance costs. There was no change to the risk free discount rates used in calculating rehabilitation provisions in
the current reporting period. Refer to note 8.
Iluka Resources Limited
132
31 December 2023
Iluka Resources Limited
133
31 December 2023
132
133
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
16.CONTRIBUTED EQUITY
17.RESERVES AND RETAINED EARNINGS
Balance on 1 January, comprising
Ordinary shares - fully paid
Treasury shares - net of tax
Movement in ordinary share capital
2023 Interim Dividend - DRP
2022 Final Dividend - DRP
2022 Interim Dividend - DRP
2021 Final Dividend - DRP
Share issue
Capital return - SRL demerger
2023
Shares
2022
Shares
424,932,151
(467,535)
424,464,616
423,202,342
(1,211,152)
421,991,190
19,496
80,655
-
-
1,000,000
-
-
-
695,704
304,105
730,000
-
Movements in treasury shares, net of tax
Employee share allocations
Treasury share purchases
1,367,892
(1,000,000)
1,473,617
(730,000)
2023
$m
1,132.5
(2.9)
1,129.6
0.6
0.2
-
-
10.6
-
10.0
(7.8)
Balance on 31 December, comprising
Ordinary shares - fully paid
Treasury shares - net of tax
425,932,659
426,032,302
(99,643)
424,464,616
424,932,151
(467,535)
1,143.2
1,143.9
(0.7)
2022
$m
1,155.5
(7.2)
1,148.3
-
-
6.9
3.1
8.1
(41.0)
10.0
(5.8)
1,129.6
1,132.5
(2.9)
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:
2022 final
2023 interim
b) Treasury Shares
Date issued
Price per share
30 March 2023
27 September 2023
10.09
8.11
Number of ordinary
shares issued
80,655
19,496
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.
Asset revaluation reserve
Balance at 1 January
Transfer to retained earnings on disposal
Balance at 31 December
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 at 31 December
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
Foreign currency translation
Balance at 1 January
Currency translation of US operation
Currency translation of SRL up to demerger
Transfer of FCTR on demerger of SRL
Translation differences on other foreign operations
Balance at 31 December
Other reserves
Balance at 1 January
Transactions with non-controlling interests
Transfer of loss in ownership changes
Balance at 31 December
Total reserves
Retained earnings
Balance at 1 January
Net profit for the year attributable to the equity holders of the parent
Dividends paid
Transfer of FCTR on demerger of SRL
Actuarial gains on retirement benefit obligation, net of tax
Transactions with non-controlling interest
Balance at 31 December
Notes:
17(a)
17(b)
17(c)
17(d)
17(e)
2023
$m
10.7
-
10.7
(3.5)
11.7
(4.7)
(2.1)
1.4
8.3
12.1
(10.0)
10.4
1.1
(2.3)
-
-
0.1
(1.1)
-
-
-
-
2022
$m
10.7
-
10.7
(1.0)
(8.8)
5.2
1.1
(3.5)
7.3
11.0
(10.0)
8.3
36.2
(8.4)
(13.6)
(17.5)
4.4
1.1
(22.1)
5.4
16.7
-
21.4
16.6
748.6
342.6
(97.8)
-
0.5
-
993.9
413.9
584.5
(261.6)
17.5
11.0
(16.7)
748.6
a) Asset revaluation reserve
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 instruments as part of its foreign currency risk management strategy associated with its US
dollar denominated sales, as described in note 21. The foreign currency instruments 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.
Iluka Resources Limited
134
31 December 2023
Iluka Resources Limited
135
31 December 2023
134
135
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
17.RESERVES AND RETAINED EARNINGS (CONTINUED)
19.EARNINGS PER SHARE
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 15) to the share-
based payment reserve.
d) Foreign currency translation reserve
Exchange differences arising on translation of the net investment in foreign operations are recognised in the foreign
currency translation reserve net of applicable income tax and reclassified to retained earnings 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.
There were no such transactions in the current reporting period.
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
2023
Cents
80.5
-
80.5
79.8
-
79.8
2022
Cents
116.9
22.4
139.3
115.9
22.2
138.1
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 Sierra Rutile
Limited, which was demerged in the comparative reporting period – refer to note 22(c).
Total basic EPS is calculated on the profit for the period of $342.6 million (2022: profit of $585.7 million) divided by the
weighted average number of shares on issue during the year, excluding treasury shares, being 425,610,795 shares (2022:
422,342,323 shares).
Total diluted EPS takes into account the dilutive effect of all outstanding share rights vesting as ordinary shares.
18.DIVIDENDS
Final dividend
for 2022 of 20 cents per share, fully franked
for 2021 of 12 cents per share, fully franked
Interim dividend
for 2023 of 3 cents per share, fully franked
for 2022 of 25 cents per share, fully franked
Distributions
SRL demerger dividend
Total Dividends
Notes
2023
$m
85.0
-
12.8
-
2022
$m
-
50.7
-
106.1
22
-
104.8
97.8
261.6
Of the total $12.8 million interim dividend declared for 2023 and the total $85 million final dividend declared for 2022,
shareholders respectively took up $0.2 million and $0.6 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 2023 of 4 cents per share, fully franked. The dividend
is payable on 28 March 2024 for shareholders on the register as at 7 March 2024. The aggregate amount of the proposed
dividend is $17.0 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 2023 is $685.5 million (2022: $458.8 million). This balance is
based on a tax rate of 30% (2022: 30%).
Iluka Resources Limited
136
31 December 2023
Iluka Resources Limited
137
31 December 2023
136
137
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
RISK
20.FINANCIAL RISK MANAGEMENT
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
Derivative financial instruments
2023
$m
12.2
251.9
(68.9)
2.6
197.8
2022
$m
35.6
218.8
(63.5)
(4.4)
186.5
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.
Derivative financial instruments amounts above reflect those recognised in the financial statements; gross foreign exchange
exposure and notional amounts are outlined in note 21.
(ii) Group sensitivity
The average US dollar exchange rate during the year was 0.6647 (2022: 0.6950). The US dollar spot rate at 31 December
2023 was 0.6827 (31 December 2022: 0.6766). Based on the Group's net financial assets at 31 December 2023, 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
15.2
14.8
Equity
$m
(9.8)
16.8
+10%
Weaken
Profit (loss)
$m
(17.6)
(12.1)
Equity
$m
10.2
(9.9)
31 December 2023
31 December 2022
20.FINANCIAL RISK MANAGEMENT (CONTINUED)
a) Market risk (Continued)
(iii) Interest rate risk
Interest rate risk arises from the Group’s borrowings and cash deposits. During 2023 and 2022, the Group's borrowings at
variable rates were denominated in Australian dollars and US dollars. At 31 December 2023, 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 2023
31 December 2022
-1%
$m
-
0.1
+1%
$m
-
(0.1)
The sensitivity is calculated using the average month end debt position for the year ended 31 December 2023. The interest
charges in note 15(d) of $0.6 million (2022: $0.5 million) reflect interest-bearing liabilities in 2023 that range between $40.7
million and $145.9 million (2022: $nil and $40.7 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 institutions and policies limit the
amount of credit exposure to any one financial institution.
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. Customers who wish
to trade on credit terms are subject to credit verification procedures, including an 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.
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 facility of $570.0 million and EFA facility of $1,104.1
million at balance date (refer note 14(b)), cash and cash equivalents of $364.9 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 facility, the contractual maturity dates and contractual
cash flows are until the next contractual re-pricing date in 2027. For the EFA facility, the contractual maturity dates and
contractual cash flows are until the facility expires in 2038. 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 received for foreign exchange collar contracts.
Iluka Resources Limited
138
31 December 2023
Iluka Resources Limited
139
31 December 2023
138
139
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
20.FINANCIAL RISK MANAGEMENT (CONTINUED)
d) Maturities of financial liabilities (continued)
21.HEDGING (CONTINUED)
c) Hedge accounting
Weighted
average rate
< 1 year
1 < 2 years 2 < 5 years
> 5 years
%
$m
$m
$m
$m
Total
contractual
cash flows
$m
Carrying
amount in
liabilities
$m
4.8
7.2
4.2
6.3
177.0
7.6
-
184.6
143.7
7.9
-
151.6
-
6.6
-
6.6
-
7.9
-
7.9
-
11.8
-
11.8
-
8.6
145.9
154.5
177.0
34.6
145.9
357.5
177.0
24.2
145.9
347.1
-
12.8
-
12.8
-
0.9
33.0
33.9
143.7
29.5
33.0
206.2
143.7
29.5
33.0
206.2
At 31 December 2023
Non-derivatives
Payables
Lease liabilities
Interest-bearing variable rate
Total non-derivatives
At 31 December 2022
Non-derivatives
Payables
Lease liabilities
Interest-bearing variable rate
Total non-derivatives
Derivatives
Foreign exchange collar contracts
4.4
-
-
-
4.4
4.4
Refer to note 21 for detail on derivative instruments.
21.HEDGING
Current assets
Foreign exchange collar hedges
Current liabilities
Foreign exchange collar hedges
2023
$m
2.6
2022
$m
-
-
4.4
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 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
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.
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 2024, remain open at the reporting date. The foreign exchange collar hedges cover US$157.9 million of expected
USD revenue to 31 December 2024 and comprise US$157.9 million worth of purchased AUD call options with a weighted
average strike price of 70.1 cents and US$157.9 million of AUD put options with a weighted average strike price of 63.7
cents.
The Group entered into US$334.9 million in foreign exchange collars consisting of US$334.9 million of bought AUD call
options with weighted average strike prices of 72.1 cents and US$334.9 million of sold AUD put options with weighted
average strike prices of 64.0 cents.
US$328.6 million in foreign exchange collar contracts consisting of US$328.6 million of bought AUD call options with
weighted average strike prices of 74.7 cents and US$328.6 million of sold AUD put options with weighted average strike
prices of 65.3 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.
Iluka Resources Limited
140
31 December 2023
Iluka Resources Limited
141
31 December 2023
140
141
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
GROUP STRUCTURE
22.CONTROLLED ENTITIES AND DEED OF CROSS GUARANTEE
a) Subsidiaries
The consolidated financial statements incorporate the following subsidiaries
Note
Place of business/
country of
incorporation
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 (MRO) Pty Ltd
Iluka International (Netherlands) 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
Iluka WA Investments Pty Ltd
Lion Properties Pty Limited
NGG Holdings Ltd
PURE Exploration Pty 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
Iluka Exploration (Canada) Limited
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i),(iv)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i),(ii)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
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
Canada
Ownership interest held
by the group
2023
%
2022
%
-
-
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
100
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
22.CONTROLLED ENTITIES AND DEED OF CROSS GUARANTEE (CONTINUED)
a) Subsidiaries (continued)
Iluka Trading (Shanghai) Co., Ltd
Iluka International (Eurasia) Pte. Ltd
Neurika Innovations SLU
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 (UK) Ltd
Iluka Technology (UK) Ltd
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
(i) Deed of cross guarantee
Note
(iii)
(v)
Place of business/
country of
incorporation
China
Singapore
Spain
Sri Lanka
Sri Lanka
Tanzania
The Netherlands
The Netherlands
United Kingdom
United Kingdom
USA
USA
USA
USA
USA
USA
USA
Ownership interest held
by the group
2023
%
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
2022
%
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
These 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.
(ii)
Incorporated in July 2023
(iii) Acquired in March 2023 (formerly Arundel ITG SL)
(iv) Formerly Iluka International (South Africa) Pty Ltd
(v) Sold in November 2023
Iluka Resources Limited
142
31 December 2023
Iluka Resources Limited
143
31 December 2023
142
143
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
22.CONTROLLED ENTITIES AND DEED OF CROSS GUARANTEE (CONTINUED)
22.CONTROLLED ENTITIES AND DEED OF CROSS GUARANTEE (CONTINUED)
b) Condensed financial statements of the extended closed group
b) Condensed financial statements of the extended closed group (continued)
Condensed statement of profit or loss and other comprehensive income
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 year
Net profit after tax for the year
Dividends provided for or paid
Retained earnings at the end of the year
Condensed balance sheet
Current assets
Cash and cash equivalents
Receivables
Inventories
Derivative financial instruments
Total current assets
Non-current assets
Property, plant and equipment
Deferred tax assets
Inventories
Other financial assets - investments in non-closed group entities
Investments accounted for using the equity method
Financial assets at fair value through profit or loss
Right-of-use assets
Total non-current assets
2023
$m
1,261.0
(789.8)
(36.6)
27.3
(128.9)
333.0
-
333.0
(4.9)
328.1
809.4
332.9
(97.8)
1,044.5
286.5
280.8
662.7
2.6
1,232.6
1,086.8
62.2
142.0
152.4
446.3
15.0
18.4
1,923.2
2022
$m
1,609.7
(889.4)
(13.0)
29.6
(214.0)
522.9
(23.6)
499.3
2.6
501.9
571.7
499.3
(261.6)
809.4
463.8
274.2
543.3
-
1,281.3
1,005.7
34.1
18.3
120.5
449.5
20.0
22.9
1,671.0
Total assets
3,155.7
2,952.3
Condensed balance sheet
Current liabilities
Payables
Derivative financial instruments
Current tax payable
Provisions
Lease liabilities
Total current liabilities
Non-current liabilities
Provisions
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
2023
$m
2022
$m
146.7
-
39.6
51.0
8.4
245.7
685.7
15.8
701.5
132.4
4.4
135.3
46.6
8.9
327.6
636.1
20.6
656.7
947.2
984.3
2,208.6
1,968.0
1,143.2
20.9
1,044.5
2,208.6
1,129.6
29.0
809.4
1,968.0
c) Demerger of Sierra Rutile (SRL) in the comparative period
The Group demerged a previously held subsidiary, SRL, in the comparative period as outlined in the demerger booklet
released on the ASX on 19 June 2022.
SRL comprised mineral sands mining and processing operations in Sierra Leone. The financial position and performance of
SRL are reflected as a discontinued operation in the prior year comparative figures within this financial report.
The impact of the demerger on the comparative period is outlined in note 23 to the 2022 Annual Report.
d)
Investment in Northern Minerals Limited – at fair value through profit or loss
The Group has a strategic partnership with Northern Minerals, in terms of which it holds an investment in that company
(comprising a convertible note and share placement). The Group is also party to a number of call and put options in relation
to Northern Minerals.
Details of the strategic partnership are outlined in the ASX announcement released on 26 October 2022, and details of the
convertible note, share placement and options are outlined in note 25 to the 2022 Annual Report.
The fair value of the investment is determined with reference to the closing share price of Northern Minerals at each
reporting date. The Group recognised a $5 million loss on remeasurement for the year ended 31 December 2023 (2022: No
remeasurement gain or loss), which is included in expenses. Refer to note 6.
The option contracts are financial instruments which have been classified as held at fair value through profit or loss. The
fair value of the options is determined with reference to the closing share price of Northern Minerals at each reporting date
(a level 1 input). The fair value of the options was $nil at 31 December 2023, as their strike price exceeds the closing share
price (2022: $nil, strike price exceeded closing price).
Iluka Resources Limited
144
31 December 2023
Iluka Resources Limited
145
31 December 2023
144
145
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
23.EQUITY ACCOUNTED ASSOCIATE – DETERRA ROYALTIES LIMITED (DETERRA)
Deterra 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. 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
Gross equity accounted profit
Depreciation
Dividends received
Balance at the end of the year
2023
$'m
449.5
33.7
(6.4)
(30.5)
446.3
2022
$'m
455.7
35.9
(6.4)
(35.7)
449.5
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. At the reporting date, the expected remaining life
of mine was 46 years.
The Group initially recognised its investment at its cost to the Group, which was equal to the carrying value of the net assets
of Deterra immediately prior to demerger in 2020. 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 (as at 31 December)
The following is a summary of the financial information presented in the financial statements of Deterra, amended to include
adjustments made by the Group in applying the equity method:
23. EQUITY ACCOUNTED ASSOCIATE – DETERRA ROYALTIES LIMITED (DETERRA)
(CONTINUED)
b) Summarised financial information of Deterra (continued)
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
Closing net assets
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
2023
$'000
2022
$'000
65,888
167,493
1,437
(152,502)
82,316
63,104
179,339
1,875
(178,430)
65,888
20%
20%
16,463
429,837
446,300
13,154
436,346
449,500
Deterra is a listed ASX royalty company. The market value of Iluka's interest at 31 December 2023 was $557.0 million (2022:
$484.1 million).
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
Prepayments
Right-of-use assets
Total non-current assets
Current liabilities
Trade and other payables
Provisions
Lease liability
Total current liabilities
Non-current liabilities
Lease liability
Deferred tax
Total non-current liabilities
Net assets
2023
$'000
24,938
62,888
1,771
1,714
91,311
8,135
171
586
522
9,414
350
159
87
596
2022
$'000
21,485
45,883
698
1,322
69,388
8,445
24
1,408
204
10,081
368
175
70
613
450
17,363
17,813
154
12,814
12,968
82,316
65,888
Iluka Resources Limited
146
31 December 2023
Iluka Resources Limited
147
31 December 2023
146
147
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
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 2023, the total value of performance commitments
and guarantees was $157.6 million (2022: $153.7 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) 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.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
2023
$m
19.9
63.8
40.5
124.2
2022
$m
10.7
47.3
22.1
80.1
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 $247.0 million (2022: $174.6 million). All
of the commitments relate to the purchase of property, plant and equipment of which $180.5 million is payable within one
year and $66.5 million is payable between one to five years of the reporting date.
26.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 demerger of Sierra Rutile
Other assurance services
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
2023
$'000
2022
$'000
680
42
722
-
25
25
47
167
214
961
650
-
650
352
149
501
52
67
119
1,270
318
12
330
294
16
310
Iluka Resources Limited
148
31 December 2023
Iluka Resources Limited
149
31 December 2023
148
149
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
28.POST-EMPLOYMENT BENEFIT OBLIGATIONS
a) Superannuation plans
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 contribution plan receives an employee's elected contribution and an employer's match-up to a fixed
percentage. Iluka’s legal or constructive obligation is limited to these contributions.
The defined benefit plan provides a monthly benefit based on average salary and years of service. The Group is in the
process of settling the defined benefit superannuation plan. Immediately prior to settlement, Iluka will remeasure plan
assets to their fair values and plan liabilities to their updated carrying values (using applicable actuarial techniques) and any
surplus or deficit that arises will be recognised as an employee cost in profit or loss.
b) Financial position
At the reporting date, the deficit between the fair value of plan assets and the carrying value of liabilities is $7.7 million
(2022: deficit of $7.6 million), determined with reference to information supplied from the plans' actuarial advisors, and 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
2023
$m
(29.8)
22.1
(7.7)
2022
$m
(33.8)
26.2
(7.6)
2021
$m
(57.5)
30.9
(26.6)
2020
$m
(51.8)
25.0
(26.8)
2019
$m
(46.7)
24.3
(22.4)
c) Defined benefits superannuation expense
In 2023, $0.9 million (2022: $1.1 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.
27.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.
The share-based payment expense recognised in profit or loss of $16.8 million (2022: $15.7 million) results from several
schemes summarised below
Schemes
Grant date
Vesting date
Fair value
Shares /
rights at
Expense
2023
Shares /
rights at
Expense
2022
$
31 Dec 2023
$m
31 Dec 2022
$m
STIP (i)
2023
2022
2021
2020
Mar-24
Mar-23
Mar-22
Mar-21
Mar-25/26
Mar-24/25
Mar-23/24
Mar-22/23
6.60
9.53
10.10
6.62
-
-
-
-
EIP (ii)
Restricted Share Plan (iii)
Mar-19/20/21/22/23 Mar-23/24/25/26
9.30
1,555,528
-
-
-
-
2,563,333
0.4
1.8
0.6
-
7.0
7.0
16.8
-
2.2
1.8
0.2
6.0
5.5
15.7
(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) 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 (2022: $nil), the share price at grant date of $10.92 for KMP other than T O’Leary and $11.30 for T
O’Leary (2022: $12.28), the expected share price volatility (based on historical volatility) of 40% (2022: 38%), the expected
dividend yield of 0% (2022: 0%), the risk free rate of return of 3.51% for KMP other than T O’Leary and 3.16% for T O’Leary
(2022: 2.64%), 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.
(iii) Restricted share plan
No restricted shares were issued to eligible employees (2022: no restricted shares issued to eligible employees) who
participated in the plan.
Iluka Resources Limited
150
31 December 2023
Iluka Resources Limited
151
31 December 2023
150
151
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
29.RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM
30.KEY MANAGEMENT PERSONNEL
OPERATING ACTIVITIES
Profit for the year
Depreciation and amortisation
Amortisation of right-of-use assets
Loss on disposal of property, plant and equipment
Gain on disposal of property, plant and equipment - US
Net exchange differences and other
Rehabilitation and mine closure provision discount unwind
Non-cash share-based payments expense
Amortisation of deferred borrowing costs
Equity accounted share of profit
Inventory NRV write-down
Changes in rehabilitation provisions for closed sites
Borrowing costs on leases
Demerger loss
Impairment reversal
Change in operating assets and liabilities
(Increase)/decrease in receivables
(Increase) in inventories
(Decrease)/increase in net current tax liability
(Increase) in net deferred tax
Increase/(decrease) in payables
(Decrease) in provisions
Net cash inflow from operating activities
Notes:
9
10
5
8
27
15
23
14
8
10
22
22
2023
$m
342.6
161.2
6.7
3.0
(26.9)
(4.6)
31.4
16.8
-
(27.3)
0.5
(4.3)
0.8
-
-
(8.0)
(243.1)
(27.1)
(67.3)
30.9
(95.7)
89.6
2022
$m
588.5
136.2
7.3
-
-
(6.6)
(5.0)
15.7
-
(29.6)
0.9
9.5
1.0
23.6
(33.3)
13.5
(5.0)
106.7
(100.8)
(69.3)
(51.8)
601.5
a) Key Management Personnel
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 78 to 103.
The below provides a summary:
Short-term benefits
Post-employment benefits
Share-based payments
Total
2023
$000
5,980
105
3,641
9,726
2022
$000
5,295
195
3,262
8,752
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) 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 arm’s length with an
unrelated individual;
(ii)
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
(iii) the transactions are trivial or domestic in nature.
Iluka Resources Limited
152
31 December 2023
Iluka Resources Limited
153
31 December 2023
152
153
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
ILUKA RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR-ENDED 31 DECEMBER 2023
32.RELATED PARTY TRANSACTIONS
The only related party transactions are with Directors and Key Management Personnel (refer note 30). 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.
33.NEW AND AMENDED STANDARDS
New standards and amendments adopted
There are no new or amended accounting standards that required the Group to change its accounting policies in the current
reporting period.
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.
31.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
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.
b) Contingent liabilities of the parent entity
2023
$m
664.2
1,745.2
2,409.4
442.5
980.6
1,423.1
2022
$m
821.1
1,529.3
2,350.4
221.8
1,043.2
1,265.0
986.3
1,085.4
1,143.9
23.5
482.3
(663.4)
986.3
1,132.5
21.4
594.9
(663.4)
1,085.4
149.7
184.5
5.0
154.7
2.5
187.0
The parent had contingent liabilities for performance commitments and guarantees of $15.6 million as at 31 December
2023 (2022: $12.2 million).
c) Contractual commitments for the acquisition of property, plant or equipment
As at 31 December 2023, the parent entity had contractual commitments for the acquisition of property, plant or equipment
totalling $33.7 million (2022: $24.3 million).
d) Parent entity financial information
The financial information for the parent entity has been prepared on the same basis as the consolidated financial
statements, except as set out below.
(i)
Investments in subsidiaries
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.
Iluka Resources Limited
154
31 December 2023
Iluka Resources Limited
155
31 December 2023
154
155
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED Directors’ Declaration
ILUKA RESOURCES LIMITED
DIRECTORS’ DECLARATION
In the directors' opinion:
a)
the financial statements and notes set out on pages 105 to 155 are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
complying with Accounting Standards and other mandatory professional reporting requirements as
detailed above, and the Corporations Regulations 2001; and
giving a true and fair view of the Group's financial position as at 31 December 2023 and of its performance
for the financial year ended on that date, and
b)
c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable, and
at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed
group identified in note 22 will be able to meet any obligations or liabilities to which they are, or may become,
subject by virtue of the deed of cross guarantee described in note 22.
Note 2 confirms that the financial statements also comply with International Financial Reporting Standards as issued by
International Accounting Standards Board.
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
R Cole
Chairman
T O’Leary
Managing Director
21 February 2024
156
Iluka Resources Limited
156
31 December 2023
Independent auditor’s report
Independent auditor’s
report
To the members of Iluka Resources Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Iluka Resources Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 31 December 2023 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
•
•
•
•
•
•
•
the consolidated statement of financial position as at 31 December 2023
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of profit or loss for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, including material accounting policy
information and other explanatory information
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
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.
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
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.
ILUKA RESOURCES LIMITED
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.
Audit Scope
Our audit focused on where the Group made subjective judgements; for example, significant
accounting estimates involving assumptions and inherently uncertain future events.
The Group's operational and financial processes are managed by a corporate function in Perth, where
substantially all of our audit procedures were performed.
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
Mine closure and rehabilitation provisions
(Refer to note 8 to the financial report)
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. The Group recognised provisions
for rehabilitation and closure obligations of $762.5
million as at 31 December 2023.
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 and timing of performing the work
and economic assumptions such as the discount
rate applied to future liabilities.
We performed the following procedures over the
Group’s closure and rehabilitation provisions,
amongst others:
• 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.
• Assessed provision movements in the year
relating to closure and rehabilitation
obligations to determine whether they were
consistent with our understanding of the
Group’s operations and associated
rehabilitation plans.
• Compared the estimated future rehabilitation
costs to actual costs being incurred at a
sample of 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 costs provision to comparable data
Key audit matter
How our audit addressed the key audit matter
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 2023, where
applicable, to those forecast as part of the
provision in previous years.
• Assessed the appropriateness of the discount
rates utilised in calculating the provision by
comparing them to current market
information.
We performed the following procedures over the
impairment assessment of the Cataby/South-
West CGU, amongst others:
• Developed an understanding of the process
by which the cash flow forecasts were
prepared to assess the recoverable amount
of the CGU.
• Assessed the mathematical accuracy and
logic of the discounted cash flow model and
assessed whether the methodology utilised to
determine the recoverable amount was
consistent with Australian Accounting
Standards.
• Assessed the reasonableness of the CGU by
determining whether the included assets,
liabilities and cash flows are directly
attributable to the CGU, and in line with our
knowledge of the Group’s operations and in
accordance with Australian Accounting
Standards.
• Assessed the appropriateness of the
significant assumptions used, including
assessing:
o The forecasted mineral sands
product price assumptions, by
comparing them to independent
industry forecasts,
o Forecast mineral sands production
over the CGU’s life of mine by
comparing them to the Group's most
recent reserves and resources
Impairment assessment of Cataby / Southwest
Cash Generating Unit (CGU)
(Refer to note 7 to the financial report)
During the year, the Group identified indicators of
impairment in its Cataby/South-West CGU.
Accordingly, an impairment assessment was
completed which resulted in no impairment
expense being recognised.
The recoverable amount of the CGU was
determined using the higher of value in use
(being the net present value of expected future
cash flows of the CGU in its current condition)
and the fair value less cost of disposal (‘Fair
Value’). The Group has used the Fair Value
methodology.
The Group prepared a discounted cash flow
model in determining the recoverable amount of
the CGU which involved the estimation of several
assumptions as described in note 7.
This was a key audit matter due to the financial
significance of the carrying value of the CGU
relative to the consolidated statement of financial
position and the judgement exercised by the
Group in calculating the recoverable amount of
the CGU and whether an impairment is required.
Key audit matter
How our audit addressed the key audit matter
statement,
o Whether the operating cost forecasts
are consistent with the most up-to-
date budgets and life of mine model;
and
o The discount rate used, by assessing
the cost of capital for the Group,
assisted by PwC valuations experts,
and comparing the rate to market
data and industry research.
• Assessed the reasonableness of the
disclosures made in the financial report
against the requirements of Australian
Accounting Standards.
Other information
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 2023, 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 through our opinion on the financial report. We
have issued a separate opinion on the remuneration report.
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.
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 the directors’ report for the year ended 31
December 2023.
In our opinion, the remuneration report of Iluka Resources Limited for the year ended 31 December
2023 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
21 February 2024
PHYSICAL,
FINANCIAL AND
CORPORATE
INFORMATION
In this section
• Five year summary
• Operating mines data
• Ore Reserves and Mineral Resources statement
• Shareholder and investor information
• Corporate information
Five year summary
Production volumes (kt)
2023
2022
2021
2020
2019
Production volumes (kt)
- Zircon
- Rutile
- Synthetic rutile
Total Z/R/SR
- Ilmenite
- Monazite concentrate
Sales volumes (kt)
- Zircon
- Rutile
- Synthetic rutile
Total Z/R/SR
- Ilmenite
- Monazite concentrate
Weighted average annual prices (US$/t)
- Zircon (premium and standard)
- Zircon (all products)
- Rutile (excluding HYTI and TIC)
- Synthetic rutile
Average AUD:USD spot exchange
rate (cents)
327.0
52.7
259.5
302.7
139.1
237.6
324.2
196.6
198.7
185.2
172.6
227.4
322.1
184.1
196.2
639.2
679.4
719.5
585.2
702.4
460.2
590.9
0
0
234.7
48.3
211.0
333.6
140.2
246.1
563.7
57.7
354.7
207.2
305.9
455.9
44.4
239.6
162.1
115.8
318.6
0
274
200.1
206.7
494.0
719.9
867.8
517.5
680.8
148.8
218.2
0
0
1,943
1,850
1,550
2,066
1,849
1,887
1,258
189.6
62.4
1,414
1,330
1,264
256.1
44.4
1,319
1,217
1,220
170.8
0
1,487
1,380
1,142
Not
Not
Not
Not
disclosed
disclosed
disclosed
disclosed
66.5
69.5
75.2
69.1
69.5
Unit revenue and cash cost ($/t)
Revenue per tonne Z/R/SR sold (A$/t)
Unit cash costs of production per tonne
Z/R/SR produced excluding by-products
2023
2,314
2022
2,215
947
938
Unit cost of goods sold per tonne of Z/R/SR
1,040
1,031
2021
1,593
777
916
2020
1,625
918
1,032
z
2019
1,654
753
889
162
163
ANNUAL REPORT 2023ILUKA RESOURCES LIMITED Summary financials ($m)
2023
2022
2021
2020
2019
Financial ratios
2023
2022
2021
2020
2019
Z/R/SR revenue
1,143.2
1,416.3
1,381.9
Ilmenite and other revenue
95.1
107.5
103.9
Revenue from operations
1,238.3
1,523.8
1,485.8
841.0
106.0
947.0
1,128.7
64.4
1,193.1
Cash costs of production
(605.2)
(508.3)
(579.2)
(558.7)
(539.6)
Inventory movement –
cash costs of production
Restructure and idle capacity charges
Government royalties
Marketing and selling costs
Asset sales and other income
Corporate and other costs
Major projects, exploration and innovation
Mineral sands EBITDA
Mining Area C EBITDA
Underlying Group EBITDA1
173.6
(20.1)
(47.1)
(27.4)
23.9
(79.7)
(61.2)
581.8
-
29.1
(67.0)
142.3
63.4
(12.5)
(47.2)
(29.0)
0.9
(61.4)
(49.1)
549.4
-
(33.4)
(38.0)
(34.4)
2.0
(64.3)
(45.2)
633.9
-
(20.9)
(22.3)
(27.7)
(1.5)
(54.6)
(62.3)
342.0
81.1
423.1
(19.7)
(39.4)
(35.0)
(3.5)
(64.5)
(25.7)
530.9
85.1
616.0
609.1
879.0
652.3
Underlying Group EBITDA/revenue margin %
Mineral sands EBITDA/revenue margin %
Basic earnings (loss) per share (cents)
Free cash flow per share (cents)
Return on shareholders’ equity4 %
Return on capital5 %
Gearing (net debt/net debt + equity) %
Financial position as at 31 December ($m)
Total assets
Total liabilities
Net assets
49.2
47.0
80.5
(37.5)
17.1
41.8
n/a
57.4
55.4
138.6
100.0
32.8
88.8
n/a
43.9
42.7
86.7
71
25.9
69.1
n/a
41.2
36.1
570.4
9
283.7
311.3
n/a
51.6
44.5
-71
33
-24.5
6.8
n/a
3,330.8
3,001.8
2,636.2
2,361.7
1,894.5
(1,172.3)
(1,107.0)
(1,041.6)
(1,069.4)
(1,182.8)
2,158.5
1,894.8
1,594.6
1,292.3
Shareholders’ equity
2,158.5
1,894.6
1,594.6
1,292.3
Net tangible asset backing per share ($)
3.80
3.27
2.60
3.00
711.6
711.6
1.60
Rehabilitation and holding costs
for closed sites
Demerger loss and transaction costs
4.3
-
(11.1)
60.8
7.2
(3.2)
-
-
(13.3)
-
Depreciation and amortisation
(167.8)
(144.6)
(171.2)
(184.8)
(163.2)
Inventory movement –
non-cash production costs
Gain on demerger of Deterra Royalties
Significant non-cash items
Net interest and finance charges
51.7
9.9
(12.6)
39.9
15.5
-
-
12.3
-
-
3.1
-
-
(5.7)
2,260.1
-
(7.1)
-
(414.3)
(51.8)
Income tax (expense) benefit
(128.9)
(212.8)
(139.1)
(95.5)
(298.7)
Net profit (loss) after tax for the period
(NPAT)
342.6
588.5
365.7
2,410.0
(275.8)
Operating cash flow
346.7
681.72
Capital expenditure (capex)
Free cash (outflow) inflow2 ($m)
Net (debt) cash
(160.7)
(159.6)
225.4
(141.8)
430.6
488.6
527.7
(53.6)
299.6
294.8
183.8
(71.2)
36.3
50.2
408.1
(197.5)
139.7
43.3
Capital and dividends
2023
2022
2021
2020
2019
Ordinary shares on issue (millions)
426.0
424.5
422.0
422.8
422.6
Dividends per share in respect of the
year (cents)
Franking level %
Opening year share price ($)3
Closing year share price ($)3
4
100
9.65
6.60
20
100
9.76
9.53
24
100
6.58
9.73
2
100
4.7
6.49
13
100
3.8
4.73
Employees, as at 31 December
2023
2022
2021
2020
2019
Full-time equivalent employees
1035
950
3,252
3,354
3,427
Iluka Ore Reserves and Mineral
Resources
Mineral Resources In Situ HM million tonnes
Ore Reserves In Situ HM million tonnes
HM Grade (%) Ore Reserves
Assemblage6 (%)
Zircon
Rutile
Ilmenite
Monazite + xenotime
2023
2022
2021
2020
2019
171
18.4
5.5
17
5
41
2.6
176
9.0
5.6
17
3
53
2
185
10.6
5.8
17
3
55
2
119
11.2
5.7
17
3
55
-
165
13
5.6
18
3
56
-
Notes:
(1) 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.
(2) Free cash flow is determined as cash flow before any debt refinance costs, proceeds/repayment of borrowings and
dividends paid in the year.
(3) Share prices prior to November 2020 have been adjusted by a factor of 0.51 for the capital reduction from the Deterra
Royalties demerger.
(4) Calculated as NPAT for the year as a percentage of the average monthly shareholders’ equity over the year.
(5) 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.
164
165
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023
Operating mines data
Summary financials ($m)
Mining
Overburden moved kbcm
Ore mined kt
Ore fed/treated 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 product2 kt
Zircon
Rutile
Ilmenite (saleable/upgradeable)
Synthetic rutile produced
Jacinth-
Cataby/
Ambrosia/
Mid-West
South
West
Group
Total
2023
Group
Total
2022 1
4,238
9,919
9,762
3.9%
3.6%
345.7
319.0
92.2%
61.9%
8.3%
22.0%
450.3
276.7
21.1
99.0
-
15,539
12,302
10,070
5.2%
4.5%
552.1
432.6
78.4%
10.1%
5.9%
62.4%
458.5
50.2
31.6
361.6
259.5
19,777
22,221
19,832
4.5%
4.1%
897.9
751.6
83.7%
30.0%
6.8%
46.9%
908.8
326.9
52.7
460.6
259.5
13,349
24,520
24,409
4.4%
3.9%
1,049
872
83.1%
23.1%
14.4%
45.6%
1,224
303
139
591
238
Notes:
(1) 2022 Group Total includes Sierra Rutile Limited, which was demerged from the Group in August 2022
(2) 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.
Ore mined (thousands of tonnes) refers to material moved containing heavy mineral ore.
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.
VHM produced and the VHM assemblage - provided to enable an indication of the valuable heavy mineral
component in HMC.
HMC processed provides an indication of material emanating from each mining operation 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
166
167
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 Ore Reserves and
Mineral Resources
statement
HM ORE RESERVES
Ore Reserves are estimated 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 the consideration of all of the ‘Modifying Factors’ in accordance with the JORC Code 2012
guidelines 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.
ILUKA HM ORE RESERVE BREAKDOWN BY COUNTRY, REGION AND JORC CATEGORY
AT 31 DECEMBER 2023
Summary of Ore Reserves for Iluka(1,2,3,6)
HM Assemblage(4)
Country
Region
Category
Ore
In Situ HM
HM
Ilmenite
Zircon
Rutile
Ore Reserve
(M+X)(7)
Change
HM
Tonnes
Millions
Tonnes
Millions
Grade
%
Grade
%
Grade
%
Grade
%
Grade
%
Tonnes
Millions
For the year ending 2023, HM Ore Reserves increased by 9.4Mt HM associated with the additions of new
deposits, mining depletion and adjustments, and are up from 9.0Mt HM to 18.4Mt HM.
The main factors contributing to the movement in Iluka’s HM Ore Reserves during 2023 include:
• The Eucla Basin Ore Reserves decreased by 0.32Mt HM associated with mining depletion, pit optimisation
and re-design at Jacinth (-0.03Mt) and Ambrosia (-0.29Mt)
• The Murray Basin Ore Reserves increased by 9.9Mt HM as a result of reporting the inaugural Ore Reserve
estimate at WIM100 (+9.9Mt)
• The Perth Basin Ore Reserves decreased by 0.15Mt HM as a result of mine depletion, pit optimisation and
adjustment at Cataby (-0.57Mt), additional tailings stockpiled at the MSP by-product stockpile deposit
(+0.06Mt), and the updated Ore Reserve estimate at Tutunup (+0.36Mt)
HM ORE RESERVES MINED AND ADJUSTED
ILUKA HM ORE RESERVES MINED AND ADJUSTED BY COUNTRY AND REGION
AT 31 DECEMBER 2023
Summary of Ore Reserve Depletion(1)
Country
Region
Category
In Situ
In Situ
In Situ
In Situ
In Situ
In Situ
In Situ
HM
Tonnes
Millions
HM
Grade
%
HM
Tonnes
Millions
HM
Tonnes(2)
Millions
HM
Tonnes
Millions
HM
Grade
%
HM
Tonnes(3)
Millions
2022
2022
Mined
2023
Adjusted
2023
2023
2023
Net
Change
0.4
0.6
Australia
Eucla Basin
Active Mines
1.5
2.9
(0.4)
(0.0)
1.1
2.6
(0.4)
Non-active
Sites
-
-
-
0.1
0.1
2.3
0.1
0.4
(0.3)
Total
Eucla Basin
1.5
2.9
(0.4)
0.0
1.1
2.6
(0.3)
Australia
Eucla
Basin
Proved
Probable
42
2
1.1
0.0
2.6
1.8
Total
Total
Total
Total
Total
Eucla
Basin
Murray
Basin
Murray
Basin
Perth
Basin
Perth
Basin(5)
Grand
Total
44
1.1
2.6
Proved
-
-
-
Probable
183
9.9
5.4
183
9.9
5.4
Proved
Probable
64
43
4.3
3.1
6.8
7.2
106
7.4
7.0
Proved
105
5.4
Probable
228
13.0
5.2
5.7
333
18.4
5.5
22
17
22
-
29
29
57
62
59
50
37
41
51
56
51
-
17
17
11
11
11
19
15
17
5
3
5
-
6
6
4
2
3
4
5
5
-
2.6
2.6
9.9
3.4
2.1
2.9
(0.1)
2.8
2.5
2.6
9.4
Notes:
(1) Competent Person - Ore Reserves: A Walkenhorst (MAusIMM).
(2) Ore Reserves are a sub-set of Mineral Resources.
(3) Rounding may generate differences in last decimal place.
(4) Mineral assemblage is reported as a percentage of in situ HM content.
(5) Rutile component in Perth Basin South West operations is sold as a leucoxene product.
(6) The quoted figures are stated as at 31 December 2023 and have been depleted for all production conducted to this date.
(7) M+X comprise rare earth element-bearing minerals monazite and xenotime.
Murray Basin
Active Mines
Non-active
Sites
Total
Murray
Basin
-
-
-
-
-
-
-
-
-
-
-
-
-
9.9
9.9
5.4
9.9
9.9
9.9
5.4
9.9
Perth Basin
Active Mines
5.7
5.7
(0.5)
(0.1)
5.1
5.6
(0.6)
Non-active
Sites
1.9
17.8
-
0.4
2.3
15.0
0.4
Total
Total
Total
Total
Perth
Basin(5)
Active
Mines
Non-active
Sites
Ore
Reserves
7.6
6.8
(0.5)
0.3
7.4
7.0
(0.1)
7.2
4.7
(0.9)
(0.1)
6.2
4.7
(1.0)
1.9
17.8
-
10.4
12.2
6.1
10.4
9.0
5.6
(0.9)
10.3
18.4
5.5
9.4
Notes:
(1) Rounding may generate differences in last decimal place.
(2) Adjusted figure includes write-downs and modifications in mine design.
(3) Net change includes depletion by mining and adjustments.
168
169
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 HM MINERAL RESOURCES
ILUKA MINERAL RESOURCE BREAKDOWN BY COUNTRY, REGION AND JORC CATEGORY
AT 31 DECEMBER 2023
Summary of Mineral Resources for Iluka(1,2,3)
HM Assemblage(4)
Country
Region
Resource
Material
In Situ HM In Situ HM
Ilmenite
Zircon
Rutile
Mineral
(M+X)(7)
Change
HM
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. Mineral Resource estimates are
determined by consideration of geology, HM cut-off grades, mineralisation thickness versus overburden
ratios and consideration of the potential mining and extraction methodology, and are prepared in accordance
with the guidelines of the 2012 JORC Code. These factors may vary significantly between deposits.
For the year ending 31 December 2023, HM Mineral Resources decreased by 5.2Mt HM net of mining
depletion and adjustments (exploration discovery, development and write-down) down from 176Mt HM to
171Mt HM. The change in Mineral Resources for 2023 was driven by:
• Eucla Basin Mineral Resources decreased by 0.3Mt HM as a result of mining depletion, adjustment and
Category
Tonnes
Millions
Tonnes
Millions
Grade
%
Grade
%
Grade
%
Grade
%
Grade
%
Tonnes
Millions
remodelling at Ambrosia (-0.3Mt HM)
Australia Eucla Basin
Measured
176
Indicated
Inferred
Total
Eucla Basin
Murray Basin
Measured
Indicated
97
49
322
235
252
Inferred
1,083
4
9
2
16
15
26
61
2.5
9.1
5.1
4.9
6.4
10.4
5.6
34
68
61
57
40
51
35
40
18
19
24
16
12
14
Total
Murray
Basin
Perth Basin
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Total
USA
Perth
Basin(5)
Atlantic
Seaboard
Total
Atlantic
Seaboard(6)
Total
Measured
Total
Indicated
Total
Inferred
1,569
102
6.5
40
14
454
304
193
27
16
9
5.9
5.4
4.9
58
53
55
11
10
9
951
53
5.5
56
10
-
-
-
-
864
653
1,325
-
-
-
-
46
51
73
-
-
-
-
5.4
7.9
5.5
6.0
-
-
-
-
50
55
38
46
-
-
-
-
15
13
14
14
Grand Total
2,842
171
• Murray Basin Mineral Resources increased by 0.2Mt HM as a result of re-estimation at WIM100 (+0.14Mt
HM), Ki Downs (+0.05Mt HM) and Dunkirk (+0.01Mt HM)
• Perth Basin Mineral Resources decreased by 0.8Mt HM as a result of re-estimation, mining depletion and
write-down at Cataby and Cataby ROM (-0.5Mt HM), additional tailings stockpiled at Eneabba (+0.07Mt HM)
and write-downs at South Tails (-0.3Mt HM) and Yellow Dam (-0.03Mt HM) due to site works associated with
the Eneabba rare earth refinery
• Atlantic Seaboard Resources decreased by 4.4Mt HM as a result of the sale of all assets within the Atlantic
Seaboard region.
3
2
2
2
7
12
6
8
5
5
5
5
-
-
-
-
5
8
6
6
0.3
0.4
0.3
0.3
(0.3)
2.3
1.3
1.9
1.8
0.2
1.1
0.9
0.8
1.0
0.8
-
-
-
-
1.4
1.0
1.7
(4.4)
1.4
(5.2)
Notes:
(1) Competent Person - Mineral Resources: B Gibson (MAIG).
(2) Mineral Resources are inclusive of Ore Reserves.
(3) Rounding may generate differences in last decimal place.
(4) Mineral assemblage is reported as a percentage of the in situ HM component.
(5) Rutile component in Perth Basin South West operations is sold as a leucoxene product.
(6) Atlantic Seaboard assets sold as at 1 November 2023.
(7) M+X comprise the rare earth element-bearing minerals monazite and xenotime.
170
171
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 HM MINERAL RESOURCES MINED AND ADJUSTED
ANNUAL STATEMENT OF
ILUKA MINERAL RESOURCES MINED AND ADJUSTED BY COUNTRY AND REGION
MINERAL RESOURCES AND ORE RESERVES
AT 31 DECEMBER 2023
Summary of Mineral Resource Depletion(1)
Country
Region
Category
In Situ
In Situ
In Situ
In Situ
In Situ
In Situ
In Situ
HM
Tonnes
Millions
HM
Grade
%
HM
Tonnes
Millions
HM
Tonnes(2)
Millions
HM
Tonnes
Millions
HM
Grade
%
HM
Tonnes(3)
Millions
2022
2022
Mined
2023
Adjusted
2023
2023
2023
3
13
2.0
(0.4)
(0.1)
7.3
-
0.2
2
13
1.8
7.2
Net
Change
(0.5)
0.2
Australia
Eucla Basin
Active Mines
Non-active
Sites
Total
Eucla Basin
16
4.9
(0.4)
0.1
16
4.9
(0.3)
Murray Basin
Active Mines
-
-
Non-active
Sites
102
6.5
Total
Murray Basin
Perth Basin
Active Mines
Non-active
Sites
102
12
41
6.5
4.3
6.1
-
-
-
-
-
-
-
0.2
102
6.5
0.2
0.2
102
(0.5)
(0.0)
-
(0.3)
12
41
6.5
4.2
0.2
(0.5)
6.1
(0.3)
Total
Perth Basin
54
5.5
(0.5)
(0.3)
53
5.5
(0.8)
USA
Total
Total
Atlantic
Seaboard(4)
Atlantic
Seaboard(4)
Active Mines
Non-active
Sites
-
4
4
-
4.8
4.8
-
-
-
-
(4.4)
(4.4)
-
-
-
-
-
-
-
(4.4)
(4.4)
Total
Active Mines
15
3.5
(0.9)
(0.2)
14
3.4
(1.0)
Total
Total
Non-Active
Sites
Mineral
Resources
161
6.4
-
(4.2)
157
6.4
(4.2)
176
6.0
(0.9)
(4.4)
171
6.0
(5.2)
Notes:
(1) Rounding may generate differences in last decimal place.
(2) Adjusted figure includes write-downs and modifications in mine design.
(3) Net difference includes depletion by mining and adjustments.
(4) Atlantic Seaboard assets sold as at 1 November 2023.
The Annual Statement of Mineral Resources and Ore Reserves as at 31 December 2023 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.
Competent persons statement
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 Limited.
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. At the
reporting date, 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 2023 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 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. 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 2023.
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).
172
173
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 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 systems 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 Mineral Resources and Ore 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 program 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 registered
as members of the Australasian Institute of Mining and Metallurgy (AusIMM) or the Australian Institute of
Geoscientists (AIG).
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.
Shareholder and
investor information
As at 31 January 2024
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 426,032,302 shares on issue as at 31 January 2024. A total of 491,503 ordinary shares are
restricted pursuant to the Directors, Executives and employees share acquisition plan, equity incentive plan,
and employee share plan.
Shareholdings
There were 25,849 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
Unmarketable parcels
174
175
RANGETOTAL HOLDERSUNITS% UNITS1 – 1,00015,3585,814,9041.361,001 – 5,0008,20219,406,5834.565,001 – 10,0001,3519,883,8112.3210,001 – 100,00088419,130,6664.49100,001 – 1,000,0004010,752,6592.521,000,001 +14361,043,67984.75Rounding0.00Total25,849426,032,302100.00MINIMUM PARCEL SIZEHOLDERS% UNITSMinimum $500.00 parcel at $7.2500 per unit692,09965,275ANNUAL REPORT 2023ILUKA RESOURCES LIMITED Top 20 Shareholders (Nominee Company Holdings)
Substantial shareholders
(As provided in disclosed substantial shareholder notices to the company)
Calendar of key events
176
177
RANKNAMEUNITS% UNITS1HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED166,116,89738.992J P MORGAN NOMINEES AUSTRALIA PTY LIMITED74,212,57917.423CITICORP NOMINEES PTY LIMITED69,103,54516.224NATIONAL NOMINEES LIMITED10,693,6862.515BNP PARIBAS NOMINEES PTY LTD 10,366,1252.436BNP PARIBAS NOMS PTY LTD 7,252,5811.707UBS NOMINEES PTY LTD6,761,8651.598HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 4,716,1431.119HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 24,233,9660.9910CITICORP NOMINEES PTY LIMITED 1,971,3300.4611HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED1,885,8240.4412BNPP NOMS PTY LTD HUB24 CUSTODIAL SERV LTD1,483,1360.3513MR THOMAS O’LEARY1,126,0020.2614R O HENDERSON (BEEHIVE) PTY LIMITED1,120,0000.2615NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>913,8070.2116NETWEALTH INVESTMENTS LIMITED 882,7320.2117BNP PARIBAS NOMS (NZ) LTD716,3720.1718HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA 525,7750.1219MR ANGUS MACKAY481,2500.1120WARBONT NOMINEES PTY LTD 458,3530.11Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total)365,021,968 85.68 Total remaining holders balance61,010,33414.3221 FebruaryAnnouncement of financial results14 MarchClose of nominations5 May 9:30am (WST)Close of acceptances of proxies for AGM7 May 9:30am (WST)Annual General Meeting*All dates are indicative and subject to change. Shareholders are advised to check with the company to confirm timings.SHAREHOLDERSHAREHOLDING% OF ISSUED CAPITALYarra Capital Management40,919,9879.60%Perpetual Limited35,917,9888.40%BlackRock Group34,086,5078.00%State Street Corporation26,172,1756.10%Aware Super Pty Ltd21,425,5295.00%Vanguard Group 21,230,4255.00%ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 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.
Corporate information
Investor Relations Enquiries
Investor Relations
Level 17, 240 St Georges Terrace,
Perth, Western Australia, 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 17, 221 St Georges Terrace,
Perth, Western Australia, 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, Victoria, 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.
Company Details
Iluka Resources Limited
ABN: 34 008 675 018
Company secretary
Ben Martin, Company Secretary
Nigel Tinley, Joint Company Secretary
Registered office
Level 17
240 St Georges Terrace
Perth, Western Australia
6000
GPO Box U1988
Postal address
Perth, Western Australia
6845
Phone
+61 8 9360 4700
Facsimile
+61 8 9360 4777
www.iluka.com
Website
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.
Notice of annual general meeting
Iluka’s 69th Annual General Meeting of Shareholders (AGM) will be held as a hybrid meeting, online and in the
Perth Conference and Exhibition Centre, 21 Mounts Bay Road, Perth, Western Australia, on Tuesday 7 May
2024, commencing at 9:30am (WST).
Shareholders and proxyholders who would prefer to attend the meeting remotely may do so through the
Computershare online platform, which offers the ability to view a live webcast, ask questions (written or oral)
and vote online during the meeting.
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 encouraged to lodge proxy votes in advance of the meeting to ensure that their voting
instructions will be received and votes cast even if they cannot attend on the day, 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 69th Annual General Meeting of Shareholders must be
received in writing no later than Thursday 14 March 2024 in order to be valid under IIuka’s constitution.
178
179
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 Forward-looking statements
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.
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”, “believe”, “estimate”, “anticipate”, “outlook” “guidance”, “target”,
“ambition”, or similar expressions, and may include, without limitation, statements regarding the 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;
statements regarding climate change (including those relating to future demands and uses for Iluka’s
products, Iluka’s targets and ambitions, technological developments and other external enablers, and climate,
environmental and energy transition scenarios); and statements regarding the expectation of future Mineral
Resources and Ore Reserves.
These forward-looking statements reflect Iluka’s expectations at the date of this report and reflect
judgements, assumptions, estimates and other information available as at the date of this document and/
or the date of Iluka’s planning processes. They are not guarantees or predictions of future performance or
statements of fact. The information is based on Iluka’s forecasts and as such is subject to variation related to,
but not restricted to, economic, market demand/supply and competitive factors.
There are inherent limitations with scenario analysis and it is difficult to predict which, if any, of the scenarios
might eventuate. Scenarios do not constitute definitive outcomes or probabilities, and scenario analysis
relies on assumptions that may or may not be, or prove to be, correct and may or may not eventuate.
Scenarios may also be impacted by additional factors to the assumptions disclosed.
Forward-looking statements are only predictions and are subject to known and unknown risks, uncertainties,
assumptions, contingencies and other important factors, many of which are beyond Iluka’s control, 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. The
information contained in this report has not been prepared as financial or investment advice. Readers are
cautioned not to place undue reliance on these forward-looking statements, particularly in light of the time
horizons which this document discusses and the inherent uncertainty in possible policy, regulatory, market
and technological developments in the future.
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 current global geopolitical
tensions and the ongoing impacts of COVID-19.
Information on likely developments in the Group’s business strategies, prospects, financial position 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.
180
181
ILUKA RESOURCES LIMITEDANNUAL REPORT 2023 WWW.ILUKA.COM