WA govt approves Iluka extension

The state government has approved a plan to extend the life of Iluka Resources Ltd's mineral sands processing facility near Geraldton by more than 10 years.

The plan will allow Iluka to import 600,000 tonnes of heavy mineral concentrate from South Australia and process it at the Narngulu facility.

Premier Alan Carpenter said legislation would be introduced into the spring session of state parliament to amend the State Agreement covering Iluka's Mid-West operations and allow the plan to be adopted.

"This arrangement will allow Iluka to maintain its considerable presence in the Mid-West region, despite the expected decline in production from its Eneabba mining leases as known reserves are exhausted," Mr Carpenter said.

Mr Carpenter said Iluka had also proposed a $60 million upgrade of its processing facilities to accommodate the plan.

He said this expansion would predominantly use local contractors and suppliers.

Resources Minister Francis Logan said Iluka's Jacinth-Ambrosia deposit in South Australia contained an estimated six million tonnes of heavy mineral concentrate.

Mr Logan said shipments from the South Australian port of Ceduna to Geraldton were expected to begin in early 2010, with up to 350,000 tonnes of zircon to be produced at Narngulu each year.

"This plan has broad support from industry and government and will significantly increase the $120 million Iluka already spends in the Mid-West each year," he said.