AFTER a poor March 2012 quarter, mineral sands major Iluka Resources has refinanced its debt by entering into $800 million-worth of five-year bilateral revolving credit facilities. The debt restructure replaces a $445 million syndicated term loan facility that was in place. In March 2012, $100 million of that facility had matured, with the remaining $345 million expected to mature next March.
“Iluka is pleased to secure expanded debt capacity, with the new facilities recognising Iluka’s enhanced credit quality and favourable growth prospects,” Iluka chief financial officer Alan Tate said.
“The new facilities will be available for general corporate purposes and provide flexibility for future investment decision making,” Mr Tate added.
The debt restructure comes after Iluka posted a 13 per cent drop in mineral sands revenue for the March 2012 quarter to $196.3 million, compared to $226.3 million for the same period in 2011.
Iluka had previously advised the market that a drop in fi rst quarter production would lead to lower sales revenue.
Zircon production for the three months to March 2012 was 115,700t, compared to 141,800t in the previous March period.
In the corresponding periods, Rutile output was 50,700t, compared to 63,000t, and synthetic rutile was 50,600, compared to 78,500t. Reduced zircon production was the result of a drop in the processing of mineral concentrate from the company’s Jacinth-Ambrosia project in South Australia’s Eucla Basin.
The dip in rutile output was a result of winding down mining at the Douglas, Kulwin and Murray Basin deposits, and stepping up mining at the Woornack, Rownack and Pirro deposits.
Lower synthetic rutile volumes were due to outages from scheduled major maintenance works at Iluka’s synthetic rutile kiln. “Iluka has stated on several occasions that it expected a soft quarter or two of zircon demand associated with the following factors: the impact of global economic conditions on customer confidence; the effect of measures by the Chinese Government to control inflation and temper speculative activity in some parts of the Chinese property market; the timing of Chinese New Year; and the need for a destocking period, especially for ceramic manufacturers,” the company stated in its March 2012 quarter report.
“As anticipated, first quarter zircon sales figures were low as many customers did not reactivate their plants until February, and in the case of some ceramic manufactures in China, plants remained closed through part or all of March,” the company said.
By Lorna Seatter
