Iluka starts SA project under budget

Mineral sands miner Iluka Resources has brought its Jacinth-Ambrosia project in South Australia into production and under budget by $30 million.

The Perth-based company today said it expected capital expenditure for the development of the project to come in at just under $390 million, compared with an approved budget of $420 million.

The heavy mineral concentrate project, in combination with the Marray Basin Stage 2 operation, will represent the majority of Iluka's zircon and rutile production output from mid 2010, following the ramp-up periods.

"....completion of both projects consolidates Iluka's position as not only a major supplier of titanium dioxide feedstocks internationally but also as the principal supplier of zircon, the medium term demand characteristics for both of which are positive, especially in developing and urbanising economies," managing director David Robb said.

The Jacinth-Ambrosia project is expected to produce 2.8 million tonnes of zircon, 350,000t of rutile and 1.5mt of ilmenite over a 10-year mine life.

Initial production from the project will replace production from Iluka's Western Australian operations, which was reduced materially this year.

Shares in Iluka were up four cents to $3.44 at 22:48 AEDT.