Half Year 2026 Iluka Resources Ltd Earnings Call

August 18, 2026

Speaker #1: Thank you for standing by, and welcome to the Iluka Resources Limited 2026 Half-Year Results Call. All participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session.

Operator: Thank you for standing by, and welcome to the Iluka Resources Limited 2026 H1 results call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Tom O'Leary, Managing Director and CEO. Please go ahead.

Operator: Thank you for standing by, and welcome to the Iluka Resources Limited 2026 H1 results call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Tom O'Leary, Managing Director and CEO. Please go ahead.

Speaker #1: If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Tom O'Leary, Managing Director and CEO.

Speaker #1: Please go ahead.

Speaker #2: Good morning, and thank you for joining us. With me are Adele Stratton and Luke Woodgate. Over the first half, we marked important milestones, advanced key growth projects, and delivered a financial result that outperformed our expectations from the beginning of the year.

Tom O'Leary: Good morning, and thank you for joining us. With me, Adele Stratton and Luke Woodgate. Over the H1, Iluka marked important milestones, advancing key growth projects, and delivered a financial result that outperformed our expectations from the beginning of the year. While demand conditions were mixed, supply tightness in the zircon market drove strong sales and pricing outcomes. This in turn led to strong cash generation and a significant reduction in our mineral sands net debt, with commissioning of the Balranald project delivered in parallel. In rare earths, we executed our first offtake agreement, strengthened our long-term feedstock position, and progressed construction of the Eneabba refinery to 60% complete. Adele will talk to the financials in a moment, but before that, a few words on mineral sands markets, Balranald, and Eneabba. On markets, we were pleased with our volume and pricing outcomes for zircon.

Speaker #2: While demand conditions were mixed, supply tightness in the zircon market drove strong sales and pricing outcomes. This, in turn, led to strong cash generation and a significant reduction in our mineral sands net debt.

Speaker #2: With commissioning of the Bell Reynolds project delivered in parallel, in rare earths we executed our first off-take agreement, strengthened our long-term feedstock position, and progressed construction of the Eneabba refinery to 60% complete.

Speaker #2: Adele will talk to the financials in a moment, but before that, a few words on mineral sands markets, Balranald, and Eneabba. On markets, we were pleased with our volume and pricing outcomes for zircon.

Speaker #2: It's mainly supply tightness that supported these. With our contracted sand prices increasing to around $1,760 per ton for Q3, many of you were aware of the fire at Aramint's facility in Senegal back in February. This, along with lower Indonesian exports, operational challenges at some of our peers, and our own supply discipline, have contributed to the dynamic.

Tom O'Leary: It is mainly supply tightness that supported these, with our contracted sand prices increasing to around AUD 1,760 per ton for Q3. Many of you are aware of the fire at Eramet's facility in Senegal back in February. This, along with lower Indonesian exports and operational challenges at some of our peers, and our own supply discipline, have contributed to the dynamic. Demand remains mixed across regions, subdued in China, and stable in Europe. Absent any change in demand or to the supply situation, we expect prices broadly to hold at the Q3 level for the remainder of the year. We have managed to identify some zircon stocks at Narngulu and plan to blend these with some sand volumes and bring them to market in the H2. While that zircon concentrated a lower-grade product, it generates a good margin.

Speaker #2: Demand remains mixed across regions—subdued in China and stable in Europe. Absent any change in demand or the supply situation, we expect prices broadly to hold at the Q3 level for the remainder of the year.

Speaker #2: We've managed to identify some zinc stocks at Nangaloo, and plan to blend these with some sand volumes and bring them to market in the second half.

Speaker #2: While that zircon in concentrate is a lower-grade product, it generates a good margin. Our high-grade titanium feedstocks are second-half weighted in terms of sales this year, a function of both our operational settings—having less natural rutile available to sell while Cavities is idle and Balranald is ramping up—as well as a customer entering into administration last year and other adjustments to take-or-pay contracts to support customers in challenging market conditions.

Tom O'Leary: Our high-grade titanium feedstocks are H2 weighted for sales this year, a function of both our operational settings, having less natural rutile available to sell while Cataby is idle and Balranald is ramping up. As well as a customer entering into administration last year and other adjustments to take-or-pay contracts to support customers in challenging market conditions. These elements were factored into our decision to idle Cataby and SR2, our second kiln, late last year. We have 110,000 tons of take-or-pay contracts for synthetic rutile this year, and most of those sales will fall in the Q4. Pigment demand is yet to show clear signs of a recovery, although we are seeing higher input costs in China flowing through to higher pigment prices there, as well as some further pigment capacity rationalization.

Speaker #2: These elements were factored into our decision to idle Cavity and SR2, our second kiln, late last year. We have 110,000 tons of take-or-pay contracts for synthetic rutile this year, and most of those sales will fall in the fourth quarter.

Speaker #2: Pigment demand is yet to show clear signs of a recovery, although we're seeing higher input costs in China flowing through to higher pigment prices there, as well as some further pigment capacity rationalization.

Speaker #2: On top of this, the widespread tariff protection announced over recent years appears to be offering some protection to multinational pigment producers. Iluka’s customers have announced some modest gains in price or volume in their recent results.

Tom O'Leary: On top of this, the widespread tariff protection announced over recent years appears to be offering some protection to multinational pigment producers, Iluka's customers, which have announced some modest gains in price or volume in their recent results. We are monitoring conditions closely and retain the flexibility to respond to renewed demand growth and any improvement in conditions. On Balranald, the commissioning was an important milestone. We were ambitious in our schedule and on reflection, perhaps we should have allowed for more time and effort to be expended, given that issues can arise where technologies are being applied in a new environment at commercial scale. We have had to spend time and effort in Q2 addressing seal failures within the inner pipes, as well as improving the mud's recipe to preserve stope integrity. Nevertheless, two mining rigs are now operational.

Speaker #2: We are monitoring conditions closely and retain the flexibility to respond to renewed demand growth and any improvement in conditions. On Bell Reynolds, the commissioning was an important milestone.

Speaker #2: We were ambitious in our schedule and, on reflection, perhaps we should have allowed for more time and effort to be expended, given that issues can arise where technologies are being applied in a new environment at commercial scale.

Speaker #2: We've had to spend time and effort in the second quarter addressing seal failures within the inner parts, as well as improving the mud's recipe to preserve stoke integrity.

Speaker #2: Nevertheless, two mining rigs are now operational. We've achieved much better consistency in developing stoke lengths to their full potential, and we're transitioning our rigs more effectively from development mode to mining mode.

Tom O'Leary: We have achieved much better consistency in developing stope lengths to their full potential, and we are transitioning our rigs more effectively from development mode to mining mode. At the concentrator, both magnetic and non-magnetic heavy mineral concentrates are being produced on specification. Our focus is now on ramping up production, particularly ore extraction rates and recoveries. Moving to Eneabba, which I know is the key for many shareholders. If you have not looked at the latest drone flyover on our website, I would really encourage you to do that. You will see that the refinery is increasingly taking shape. Just last week, the roaster kiln was raised from its holding area and positioned in place, and we have included a picture of that on slide 17 in today's presentation. We have also again reaffirmed the total capital budget for the refinery and are increasing in confidence on both budget and schedule. Construction is 60% complete.

Speaker #2: At the concentrator, both magnetic and non-magnetic heavy mineral concentrates are being produced on specification. Our focus is now on ramping up production, particularly ore extraction rates and recoveries.

Speaker #2: Moving to Eniaba, which I know is the key for many shareholders, if you haven't looked at the latest drone flyover on our website, I'd really encourage you to do that.

Speaker #2: You'll see that the refinery is increasingly taking shape. Just last week, the roaster kiln was raised from its holding area and positioned in place, and we've included a picture of that on slide 17 in today's presentation.

Tom O'Leary: You will see that the refinery is increasingly taking shape. Just last week, the roaster kiln was raised from its holding area and positioned in place, and we have included a picture of that on slide 17 in today's presentation. We have also again reaffirmed the total capital budget for the refinery and are increasing in confidence on both budget and schedule. Construction is 60% complete.

Speaker #2: We've also again reaffirmed the total capital budget for the refinery, and our confidence is increasing in both the budget and schedule. Construction is 60% complete, the vast majority of major equipment has been delivered to site, and piping, electrical, and instrumentation installation are underway.

Tom O'Leary: The vast majority of major equipment has been delivered to site, and piping, electrical, and instrumentation installation are underway. Commissioning has already begun. The high-voltage power supply and distribution network have been energized together with several low-voltage transformers supplying key process areas. This milestone enables progressive commissioning of plant equipment and supports the transition from construction activities to operational testing. Mineral commissioning, that is the delivery of first feedstock into the completed refinery, will occur in 2027. From a strategic and commercial perspective, we have delivered our first rare earths offtake agreement with a global automotive company and also strengthened the refinery's long-term feedstock position through the concentrate supply agreement with VHM Resources, which we announced in July. Both developments are consistent with our approach to building a rare earths business based on diversified feedstock and pricing outcomes that are protected from the industry's existing monopoly structure.

Speaker #2: Commissioning has already begun. The high-voltage power supply and distribution network have been energized, together with several low-voltage transformers supplying key process areas. This milestone enables progressive commissioning of plant equipment and supports the transition from construction activities to operational testing.

Speaker #2: Mineral commissioning—that is, the delivery of first feedstock into the completed refinery—will occur in 2027. From a strategic and commercial perspective, we've delivered our first rare earths off-take agreement with a global automotive company, and also strengthened the refinery's long-term feedstock position through the concentrate supply agreement with VHM Resources, which we announced in July.

Speaker #2: Both developments are consistent with our approach to building a rare earths business based on diversified feedstock and pricing outcomes that are protected from the industry's existing monopoly structure.

Speaker #2: You'll see on slide 21 a summary of our internal and third-party feedstock options, and slide 22 covers some illustrative production scenarios. Clearly, external developments continue to reinforce the strategic rationale for our rare earths diversification.

Tom O'Leary: You will see on slide 21 a summary of our internal and third-party feedstock options, and slide 22 covers some illustrative production scenarios. Clearly, external developments continue to reinforce the strategic rationale for our rare earths diversification. We continue to see evidence of industries and governments seeking secure and reliable sources of rare earths with transparent supply chains. We have been talking about this shift for many years. Momentum is only building, and it is becoming evident that Eneabba will play an important role in the evolution of this industry. The refinery coming online in 2027 is also well-timed from a supply and demand perspective. It is one of very few facilities outside China that, by design, will produce separated light and heavy rare earth oxides at meaningful scale. Over to you, Adele.

Speaker #2: We continue to see evidence of industries and governments seeking secure and reliable sources of rare earths, with transparent supply chains. We've been talking about this shift for many years.

Speaker #2: Momentum is only building, and it's becoming evident that Eneabba will play an important role in the evolution of this industry. The refinery coming online in 2027 is also well timed from a supply and demand perspective.

Speaker #2: It's one of very few facilities outside China that, by design, will produce separated light and heavy rare earth oxides at meaningful scale. Over to you, Adel.

Speaker #3: Thanks, Tom, and good morning, everyone. The mineral sands business generated strong cash flow during the half, supported by improved work on pricing, inventory drawdown, and continued operational discipline.

Adele Stratton: Thanks, Tom, and good morning, everyone. The Mineral Sands business generated strong cash flow during the half, supported by improved zircon pricing, inventory drawdown, and continued operational discipline. Mineral Sands net debt reduced by 42% to AUD 273 million at 30 June, with the business generating AUD 247 million of operating cash flow and AUD 200 million of free cash flow. These outcomes were achieved while completing the development of Balranald, which accounts for the vast majority of the AUD 94 million of Mineral Sands capital expenditure in H1. As we set out in the quarterly, that figure included AUD 35 million that had previously been expected to be recognized as operating costs for Balranald. As a result, we've provided updated guidance on cash costs of production for 2026, and we expect those to be AUD 380 million for the year.

Speaker #3: Mineral sands net debt reduced by 42% to $273 million at 30 June. With the business generating $247 million of operating cash flow and $200 million of free cash flow, these outcomes were achieved while completing the development of Balranald.

Speaker #3: Which accounts for the vast majority of the $94 million of mineral sands capital expenditure in H1. As we set out in the quarterly, that figure included $35 million that had previously been expected to be recognized as operating costs for Balranald.

Speaker #3: As a result, we've provided updated guidance on cash costs of production for 2026, and we expect those to be $380 million for the year.

Speaker #3: Full-year mineral sands capex is now expected to be $150 million, and we'll spend an additional $25 million on studies for Wimmera and rare earths metallisation.

Adele Stratton: Full-year Mineral Sands CapEx is now expected to be AUD 115 million, and we'll spend an additional AUD 25 million on studies for Wimmera and rare earth metallization. Our ability to invest in these initiatives is supported by our strong cash generation and improved Mineral Sands balance sheet. We've reported a statutory loss for the period, which includes AUD 156 million of cash and non-cash inventory movement and AUD 41 million in idle charges, which we flagged at the results in February. On inventory, obviously, we had a significant finished goods unwind this half, down 74,000 tons for zircon sand and 37,000 for synthetic rutile. Our HMC stocks were down modestly, and what we retain is predominantly ilmenite-bearing work in progress for kiln feed, enough to feed the SR kiln for around 12 months. The kiln restart timing remains subject to market conditions.

Speaker #3: Our ability to invest in these initiatives is supported by our strong cash generation and improved mineral sands balance sheet. We've reported a statutory loss for the period, which includes $156 million of cash and non-cash inventory movement, and $41 million in idle charges, which we flagged at the results in February.

Speaker #3: On inventory, obviously, we had a significant finished goods unwind this half—down 74,000 tons for zircon sand and 37,000 for synthetic rutile. Our HMC stocks were down modestly, and what we retain is predominantly ilmenite, varying work-in-progress for kiln feed.

Speaker #3: That's enough to feed the SR kiln for around 12 months. The kiln restock timing remains subject to market conditions. Any potential restart of Caddy would be later, given our stocks of ilmenite and varying HMC.

Adele Stratton: Any potential restart of Cataby would be later given our stocks of ilmenite-bearing HMC. The company declared a 3-cent fully franked dividend in line with our capital allocation framework to distribute receipts from our 20% stake in the Deterra Royalties. And with that, back to you, Tom.

Speaker #3: The company declared a 3-cent fully franked dividend, in line with our capital allocation framework, to distribute receipts from our 20% stake in Deterrent Royalties.

Speaker #3: And with that, back to you, Tom.

Speaker #2: Thanks, Adel. Looking ahead, execution remains our focus. At Bell Reynolds, this means achieving ramp-up and delivering first final products. Our first heavy mineral concentrate shipment to Nangaloo is scheduled for September.

Tom O'Leary: Thanks, Adele. Looking ahead, execution remains our focus. At Balranald, this means achieving ramp up and delivering first final products. Our first heavy mineral concentrate shipment to Narngulu is scheduled for September. At Eneabba, construction continues as we work towards mineral commissioning and operations next year. We continue to have strong engagement with potential customers and feedstock suppliers and are progressing discussions with several credible counterparties across different geographies. Finally, across the broader business, we remain disciplined on costs and capital allocation. We look forward to sharing with you further progress over the year. And with that, we'll move to questions.

Speaker #2: At Eniaba, construction continues as we work towards mineral commissioning and operations next year. We continue to have strong engagement with potential customers and feedstock suppliers, and are progressing discussions with several credible counterparties across different geographies.

Speaker #2: Finally, across the broader business, we remain disciplined on capex costs and capital allocation. We look forward to sharing with you further progress over the year, and with that, we'll move to questions.

Speaker #1: Thank you. If you wish to ask a question, please press *1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press *2. If you're on a speakerphone, please pick up the handset to ask your question.

Operator: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Rahul Anand from Morgan Stanley. Please go ahead.

Speaker #1: Your first question comes from Rahul Anand from Morgan Stanley. Please go ahead.

Speaker #4: Oh, good morning, team. Thanks for the call. I have a couple of questions. Perhaps if we start with zircon markets first, and then I'll come back to Bell Reynolds.

Rahul Anand: Good morning, team. Thanks for the call. Couple of questions from me. Perhaps if we start with zircon markets first, and then I will come back to Balranald. Obviously, some really good signs in the zircon market. We have seen both volume and price improvements. Tom, as you highlighted, these are in some part driven by these disruptions that we have had in Senegal and also Indonesia. I guess my question is, from your perspective, where do you think we currently sit on prices after these increases? Are those prices enough for perhaps the Indonesian side to provide more exports into the market? Are you thinking about the price as such, that once these disruptions go away, is there downside pressure, or are you seeing some green shoots now that we should be able to hold this level of pricing and volumes? That is the first one on zircon. Thanks.

Speaker #4: Obviously, there are some really good signs in the zircon market. We've seen both volume and price improvements. But Tom, as you highlighted, these are in part driven by the disruptions we've had in Senegal and also Indonesia.

Speaker #4: Now, I guess my question is: from your perspective, where do you think we currently sit on prices after these increases? Are those prices enough for perhaps the Indonesian side to provide more exports into the market? And are you thinking about the price such that once these disruptions go away, there is downside pressure, or are you seeing some green shoots now that suggest we should be able to hold this level of pricing and volumes?

Speaker #4: That's the first one on zircon. Thanks.

Speaker #2: Yeah, just specifically on Indonesia, I'm not sure they're waiting so much for a price signal as more policy constraints around the export of zircon.

Tom O'Leary: Well, just specifically on Indonesia, I am not sure they are waiting so much for a price signal as more policy constraints around the export of zircon, so not expecting to see a material change there. Well, look, zircon has, for a long time, been a supply-side story, and it continues to be that. I think while the Senegal interruption may be rectified in time, there are other producers who continue to struggle, and you know them as well as I, Rahul. So I am not expecting a material improvement in the supply side anytime soon, and that is why we think that absent any material change to current settings, we are seeing prices pretty stable through the remainder of the year.

Speaker #2: So, not expecting to see a material change there. Yeah, look, zircon has for a long time been a supply-side story, and it continues to be that.

Speaker #2: I think while the Senegal interruption may be rectified in time, there are other producers who continue to struggle, and you know them as well as I, Rahul.

Speaker #2: So, I'm not expecting a material improvement in the supply side anytime soon, and that's why we think that, absent any material change to current settings, we're seeing prices remain pretty stable through the remainder of the year.

Speaker #4: Excellent. Okay, that's very clear. Thanks, Tom. And the second one's on Bell Reynolds. I believe the ore extraction rates and recoveries have been a bit below expectations there, or are at the moment?

Rahul Anand: Excellent. Okay. That is very clear. Thanks, Tom. The second one is on Balranald. I believe the ore extraction rate and recoveries have been a bit below expectations there, or are at the moment. Can you share your views on what is driving it? I remember during trials there was an issue with greater wear rates from what I remember. Is that the same problem that is ongoing currently, or is there something else? What type of rectification is going on, and when should we expect for that performance to pick up?

Speaker #4: But I guess, can you share your views on what's driving it? I mean, I remember during trials there was an issue with greater wear rates, from what I remember.

Speaker #4: Is that the same problem that's ongoing currently, or is there something else? What type of rectification is going on, and when should we expect that performance to pick up?

Speaker #2: Yeah, thanks, Rahul. Look, what we've been spending time on really over the last half, particularly in the second quarter, is around resolving issues we've had with the seal connections between the 10-meter lengths of three-core pipe.

Tom O'Leary: Yeah. Thanks, Rahul. Look, what we've been spending time on really over the last H1, particularly in the Q2, is around resolving issues we've had with the seal connections between the 10-meter lengths of three core pipe. What we are focused on going forward is making some in-the-field optimizations to make that mining equipment really easier to deploy. In that example, we're simplifying the connection to avoid the possibility of seal damage in the field. I've also touched on the mud recipes to ensure that we manage to get our mining unit to the full potential of stope lengths. Those two issues, I think around seals and pipe connections, as well as around being able to exploit the full lengths of stopes, have largely been resolved in the H1.

Speaker #2: So, what we are focused on going forward is making some in-the-field optimizations to make that mining equipment really easier to deploy. In that example, we're simplifying the connection to avoid the possibility of seal damage in the field.

Speaker #2: I also touched on the mud recipes to ensure that we manage to get our mining unit to the full potential of stoke lengths. And those two issues—I think, around the seals and pipe connections, as well as around being able to exploit the full lengths of stokes—have largely been resolved in the first half.

Speaker #2: So we're looking forward to really getting on and increasing our rates of extraction over the second half. That's really the objective.

Tom O'Leary: We're looking forward to really getting on and increasing our rates of extraction over the H2. That's really the objective.

Speaker #3: Yeah. And just to add to that, Rahul, in terms of your question— is it a wear issue? So as you say, when we did some of those trials, was it the mining nozzle that was wearing down a lot quicker?

Adele Stratton: Yeah, and just to add to that, Rahul, in terms of your question, is it a wear issue? As you say, when we did some of those trials, it was the mining nozzle that was wearing down a lot quicker. We're not experiencing that same issue. We've talked about the fact those further trials that we did to test the materials of construction, they've all proven to be sufficient for the application.

Speaker #3: We're not experiencing that same issue. We've talked about the fact that those further trials we did to test the materials of construction have all proven to be sufficient for the application.

Speaker #4: Excellent. That's very clear. Thank you, team. I'll pass it on.

Rahul Anand: Excellent. That's very clear. Thank you, team. I'll pass it on.

Speaker #2: Thanks, Rahul.

Tom O'Leary: Thanks, Rahul.

Speaker #1: Thank you. Your next question comes from Paul Young from Goldman Sachs. Please go ahead.

Operator: Thank you. Your next question comes from Paul Young from Goldman Sachs. Please go ahead.

Speaker #4: Yeah, thanks. Morning, Tom and Adele. Hope you're well. A few questions on any other things. I mean, first of all, just based on the photos and construction, it looks like it's going really well.

Paul Young: Yeah, thanks. Morning, Tom and Adele. Hope you're well. A few questions on Eneabba, thanks. I mean, first of all, just based on the photos and construction, looks like it's going really well. So, well done getting to this point. Project's really well managed, really well estimated, and construction's going really well. Also noticed you paid back some of the MOFA facility during the H1, which is great from a balance sheet standpoint. But the first question is actually on just committed remaining CapEx. You've done a great job of disclosing your contingency along the way and being transparent there. You've used a little bit of it, though. So just curious around where you've used the contingency and growth allowances so far and do you expect, when you look at the forward, to use a bit more within the 0.6 to 0.7 of committed remaining? Thanks.

Speaker #4: So, well done getting to this point. The project's really well managed, really well estimated. Our construction's going really well. I also noticed you paid back some of the MoFA facility during the half, which is great from a balance sheet standpoint.

Speaker #4: But the question—the first question—is actually on just committed remaining capex. I mean, you've done a great job of disclosing your contingency along the way and being transparent there.

Speaker #4: You've used a little bit of it, though. So, just curious around where you've used the contingency and growth allowances so far, and do you expect, when you look forward, to use a bit more within the $0.6 to $0.7 billion of committed remaining?

Speaker #4: Thanks.

Speaker #3: Hi, Paul. Yeah, the terms of it, as you say, we're really pleased with regards to the progress that the team is making. And we've reiterated once again the guidance on the full capital cost expected for the refinery.

Adele Stratton: Hi, Paul. Well, look, in terms of it, as you say, we're really pleased with regards to the progress that the team is making, and we've reiterated once again the guidance on the full capital cost expected for the refinery, so that's AUD 1.7 to AUD 1.8 billion. And we have tried to be really transparent in terms of the funds that are set aside for the contingency growth and escalation, and you would expect some of those funds to be utilized. Growth and escalation comes from inflation, et cetera. So, the purpose of the disclosure is really to provide that transparency that you've still got sizable contingency for the remaining spend to go. In terms of utilization, it's a whole range of factors. There's been a little bit, as everyone can imagine, in terms of diesel prices and getting stuff to site. So transport costs, that's a little bit of it.

Speaker #3: So that's $1.7 to $1.8 billion, and we have tried to be really transparent in terms of the funds that are set aside for the contingency, growth, and escalation.

Speaker #3: And you would expect some of those funds to be utilized. Growth and escalation come from inflation, etc. So the purpose of the disclosure is really to provide that transparency that you've still got a sizable contingency for the remaining spend to go.

Adele Stratton: Growth and escalation comes from inflation, et cetera. So, the purpose of the disclosure is really to provide that transparency that you've still got sizable contingency for the remaining spend to go. In terms of utilization, it's a whole range of factors. There's been a little bit, as everyone can imagine, in terms of diesel prices and getting stuff to site. So transport costs, that's a little bit of it.

Speaker #3: In terms of utilization, it's a whole range of factors. There's been a little bit, as everyone can imagine, in terms of diesel prices and getting stuff to sites, or transport costs.

Speaker #3: That's a little bit of it. And it's just the normal puts and takes in terms of as you progress through the project, so there's nothing specific that I'd call out.

Adele Stratton: It is just the normal cuts and takes in terms of as you progress through the project. There is nothing specific that I would call out. As Tom mentioned, we have now got all of the major equipment on site. We have let all of the major contracts. We announced in the quarter the award of the SMPE&I, so the structural and mechanical piping, electrical, and instrumentation contract. That was the last major contract that we had to do. We are really comfortable with regards to the disclosed capital of AUD 1.7 billion to AUD 1.8 billion for the project in total.

Speaker #3: As Tom mentioned, we've now got all of the major equipment on site. We've let all of the major contracts. So, we announced in the quarter the award of these SMPEIs—that's the structural, mechanical, piping, electrical, and instrumentation contract.

Speaker #3: That was the last major contract that we had to do. So, yeah, we're really comfortable. We're obviously the disclosed capital of $1.7 to $1.8 billion for the project in total.

Speaker #4: Yeah. Okay. Great. And then can you remind us just with respect to commissioning, great to see the kilns in place at the moment. It's still lots to do around pumping and piping and instrumentation and etc.

Paul Young: Yeah. Okay, great. Can you remind us, just with respect to commissioning, great to see the kiln is in place at the moment. There is still lots to do around pumping and piping and instrumentation and et cetera, installation. When is first monazite scheduled to go through the kiln with respect to the schedule?

Speaker #4: Installation—when is first Monazite scheduled to go through the kiln, with respect to the schedule?

Speaker #2: Yeah, look, as you've kind of alluded to in your question there, Paul, commissioning is a bit of a continuum. And as I called out in the opening, we've begun commissioning in several areas already.

Tom O'Leary: Well, as you have kind of alluded to in your question there, Paul, commissioning is a bit of a continuum, and as I called out in the opening, we have begun commissioning in several areas already. What we have said about mineral commissioning is that it will be in 2027. I think that is sufficient guidance for the moment.

Speaker #2: What we've said about mineral commissioning is that it will be in 2027, and I think that's sufficient guidance for the moment.

Speaker #4: Yeah, that's quite broad guidance, Tom. But anyway, we can maybe explore a little bit more. But just one last question from me, just on the equity contributions—Adele, when you look at the capex profile, when do you expect to make additional equity contributions?

Paul Young: Yeah, that is quite broad guidance, Tom. Anyway, we can maybe explore a little bit more. Last question from me, just on the equity contributions, Adele, when you look at the CapEx profile, when do you expect to make additional equity contributions? That AUD 214 million, just the spread of that. Thanks.

Speaker #4: Is that $214 million just the spread of that? Thanks.

Speaker #3: Yeah. So just a reminder, everyone, in terms of the composition of the $214 million, $82 million of that relates to working capital.

Adele Stratton: Yeah. Just to remind everyone in terms of the composition of the AUD 214 million, AUD 82 million of that relates to working capital. Paul, you'd expect that to be towards the end of the project rather than the beginning, as you start to pull in new reagents, et cetera. The next equity contribution is expected at the beginning of next year. So in 2027, from a capital perspective. For the rest of this year, we'll be drawing down on the Export Finance Australia loan. In terms of where we are with that loan, we've got full access to the AUD 1.65 billion, having satisfied the EFA's conditions around satisfactory offtake sensitivity.

Speaker #3: So, Paul, you'd expect that to be towards the end of the project rather than the beginning, as you start to pull in your reagents, etc.

Speaker #3: And so the next equity contribution is expected at the beginning of next year. So in 2027, from a capital perspective, so for the rest of this year, we'll be drawing down on the export finance Australia loan and in terms of where we are with that the 1.65 billion dollars, having satisfied the EFA's condition around satisfactory off-take centered into.

Speaker #4: Yeah. Okay, great. Okay, thank you.

Paul Young: Yeah. Okay, great. Okay. Thank you.

Speaker #2: Thanks, Paul.

Tom O'Leary: Thanks, Paul.

Speaker #1: Thank you. Your next question comes from Glen Lowcock from Barrenjoey. Please go ahead.

Operator: Thank you. Your next question comes from Glyn Lawcock from Barrenjoey. Please go ahead.

Speaker #4: Morning, Tom. And Adele. Tom, can we just go back to the off-take agreement first, and just the confusion that was caused when you made that announcement about a month ago or so?

Glyn Lawcock: Morning, Tom and Adele. Tom, can we just go back to the offtake agreement first and just the confusion that was caused when you made that announcement about a month ago or so. You weren't trying to give four-year production guidance when you said 1.2 thousand tonnes is effectively 10%. Can we just clear that up and, how should we think about it? Obviously, it's really your first couple of years will be just on the Eneabba stockpile, but then it will just depend on third-party feed. If you could clear that up, that'd be great. Thanks.

Speaker #4: Just to clarify, you weren't trying to give four-year production guidance when you said 1.2 thousand tons is effectively 10%. Can we just clear that up, and how should we think about it?

Speaker #4: I mean, obviously, your first couple of years will be just on the Annie Abbott stockpile, but then it will just depend on third-party feed.

Speaker #4: If you could clear that up, that would be great. Thanks.

Speaker #2: Yeah, that's right. No, Glen, you're right. We weren't intending to give four-year production guidance, particularly given, as we've just discussed, we're commissioning the asset next year.

Tom O'Leary: Yeah. That's right. No, Glyn, you're right. We weren't intending to give four-year production guidance, particularly given, as we've just discussed, we're commissioning the asset next year. So that estimate was really around, using the Eneabba stockpile only. As we've set out in the presentation today, there are many prospects for other feedstocks coming into the refinery beyond the Eneabba stockpile, which quite obviously will give rise to higher production outcomes. So, really kind of in response to concerns around potential early years production, we've sought to allay that somewhat, with the disclosure we've made today.

Speaker #2: So that estimate was really around using the Annie Abbott stockpile only. And as we've set out in the presentation today, there are many prospects for other feedstocks coming into the refinery beyond the Annie Abbott stockpile.

Speaker #2: Which, quite obviously, will give rise to higher production outcomes. So really, kind of in response to concerns around potential early years production, we sought to allay that somewhat with the disclosure we've made today.

Speaker #4: Yeah, much clearer. Thanks, Tom. And then maybe just on the inventory position—obviously, you're now down to 260,000 tons of finished goods. You've got 73,000 tons of SR slated to sell in the next six months as well.

Glyn Lawcock: Yep. Much clearer. Thanks, Tom. Then maybe just on the inventory position, obviously you're now down to 260,000 tonnes of finished goods. You've got 73,000 tonnes of SR slated to sell in the next six months as well. I know you don't break it down by product, but at this rate now, when do you envisage turning the SR kiln back on and, what is your thinking now around staging and, is it the big kiln, the small kiln? When do you start making decisions on restarts and what does it look like in your mind at the moment?

Speaker #4: I mean, I know you don't break it down by product, but at this rate now, when do you envisage turning the SR kiln back on?

Speaker #4: And what is your thinking now around staging? Is it the big kiln or the small kiln? When do you start making decisions on restarts, and what does it look like in your mind at the moment?

Speaker #2: Yeah. I mean, as you well know, Glen, the larger kiln SR2 obviously has some heat recycling, some purge generation, so it's obviously a much more efficient kiln.

Tom O'Leary: Yeah. As you well know, Glyn, the larger kiln, SR2, obviously has some heat recycling for cogeneration. So it's obviously a much more efficient kiln than SR1. But we've said that the restart is very much dependent on market conditions in the titanium space. We're monitoring those really closely, and we're retaining the flexibility to restart pretty quickly. But really, that is dependent on I think, improved housing markets in North America and Europe, which will drive pigment demand, which in turn will see pull-through in feedstock demand. The other driver, potentially, of restart and an uplift in demand for feedstocks more generally, is disruptions to feedstock supply. We've seen the impact that a relatively small disruption, small in terms of number of suppliers at least, in the zircon space can have on zircon feedstock consumption.

Speaker #2: And SR1. But we've said that the restart is very much dependent on market conditions in the titanium space. We're monitoring those really closely, and we're retaining the flexibility to restart pretty quickly.

Speaker #2: But really, that is dependent on, I think, improved housing markets in North America and Europe, which will drive pigment demand, which in turn will see pull-through in feedstock demand.

Speaker #2: Another potential driver of a restart and an uplift in demand for feedstocks more generally is disruptions to feedstock supply. We've seen the impact that a relatively small disruption—or small in terms of number of suppliers, at least in the zircon space—can have on zircon feedstock consumption.

Speaker #2: And it's a similar industry structure, if you like, in the titanium space. So, some interruptions there could see quite extensive pull-through and changes to requirements for the likes of our feedstocks.

Tom O'Leary: It is a similar industry structure, if you like, in the titanium space. Some interruptions there could see quite extensive pull-through and changes to requirements for the likes of our feedstocks. When we look at the titanium feedstock industry, look at the financial viability of some of the participants. We also look at, for example, strategic reviews underway from some major producers, which I know you are well aware of. Also a lack of investment among some in the industry that could also lead to further operational outages. But at the end of the day, you can expect us to be a pretty disciplined supplier into the market and have a focus on sustainable returns. We are just looking at that market and we will make a judicious decision around restart at the right time.

Speaker #2: When we look at the titanium feedstock industry, you look at the financial viability of some of the participants. We also look at, for example, strategic reviews underway from some major producers, which I know you're well aware of.

Speaker #2: And also a lack of investment among some in the industry that could also lead to further operational outages. But at the end of the day, you can expect us to be a pretty disciplined supplier into the market and have a focus on sustainable returns.

Speaker #2: So we're just looking at that market, and we'll make a judicious decision around restart at the right time.

Speaker #4: All right, thanks. And could I squeeze in just a follow-up, Tom, on Baranel?

Glyn Lawcock: All right. Thanks. Could I squeeze in just a follow-up, Tom, on Barrenjoey?

Speaker #2: Sure.

Tom O'Leary: Sure.

Speaker #4: Just, obviously, back at the start of the year, six months ago, you said the first rig had achieved target extraction rates back in February, I think it was.

Glyn Lawcock: Obviously back at the start of the year, six months ago, you said the first rig had achieved target extraction rates back in February, I think it was, you said that.

Speaker #4: You said that, so obviously you had some issues in Q2 with the seals. I didn’t quite pick up, in your answer to our rules question, but what rate are we at now?

Tom O'Leary: Yeah.

Glyn Lawcock: Obviously you had some issues in Q2 with the seals. I did not quite pick up in your answer to Rahul's question, but what rate are we at now? Because obviously we were at nameplate, you said back in February, we had some issues in Q2. Where is Balranald now and when, I did not quite pick up when you said, actually, you now expect to be back at full extraction rates across the two rigs.

Speaker #4: Because, obviously, we were at nameplate, you said, back in February. We had some issues in Q2. Where is Baranel now? And I didn't quite pick up when you said you'd actually expect to be back at full extraction rates across the two rigs.

Speaker #2: Yeah. Good question, Glen. I didn't disclose a precise rate, but what I said back in February is that we'd achieved targeted extraction rates. But the key is achieving them continuously over a long period of time.

Tom O'Leary: Yeah. Good question, Glyn. I didn't disclose a precise rate, but what I said back in February is that we'd achieved targeted extraction rates, but the key is achieving them continuously over a long period of time. That's what we need to do, and we need to continue to apply effort to get to in the H2, to get our extraction rates up to targeted rates permanently, as it were. That's the volatility. It's the failure to achieve it on a continuous, reliable basis that we need to work on over the H2.

Speaker #2: And that's what we need to do, and we need to continue to apply effort to get to, in the second half, to get our extraction rates up to targeted rates permanently, as it were.

Speaker #2: And so that's the volatility. It's the failure to achieve it on a continuous, reliable basis that we need to work on over the second half.

Speaker #4: So, no fatal flaws, Tom, in your mind?

Glyn Lawcock: No fatal flaws, Tom, in your mind?

Speaker #2: No, I don't think so, Glen. I mean, we've said that, with the benefit of hindsight, we probably should have allocated more time and effort to ramping up what is—it's an existing technology, but in a new context.

Tom O'Leary: Well, I don't think so, Glyn. We've said that with the benefit of hindsight, we probably should have allocated more time and effort to ramping up what is an existing technology, but in a new context. In that environment, we probably should have allocated a bit more time to address these sorts of issues.

Speaker #2: So, in that environment, we probably should have allocated a bit more time to address these sorts of issues.

Speaker #4: So you don't envisage a third rig being needed, then, to get to the ultimate output rates? You think you can still do it with two?

Glyn Lawcock: You don't envisage a third rig being needed then to get to the ultimate output rates? You think you can still do it with two?

Speaker #2: Yeah, I think so. Yeah, that's very focused. We're not contemplating additional rigs.

Tom O'Leary: Yeah, I think so. Yeah, that's-

Glyn Lawcock: All right.

Tom O'Leary: That's very focused. We're not contemplating additional rigs.

Speaker #4: All right. Thanks for your time, Tom.

Glyn Lawcock: All right. Thanks for your time, Tom.

Speaker #2: No trouble. Thank you, Glen.

Tom O'Leary: No trouble. Thank you, Glyn.

Speaker #1: Thank you. Your next question comes from Jim Aria Singer from UBS. Please go ahead.

Operator: Thank you. Your next question comes from Dim Aryasinghe from UBS. Please go ahead.

Speaker #5: Thanks, Tom. Thanks, Dell. Just on the off-take, can we talk more broadly now on the strategy going forward? Do you expect to do more off-takes?

Dim Aryasinghe: Thanks, Tom. Thanks, Dale. Just on the off-take, can we talk more broadly now on the strategy going forward? Do you expect to do more off-takes? How does that inform your thought process in terms of how to eventually feed the plant?

Speaker #5: And I guess, how does that inform your thought process in terms of how to eventually feed the plant?

Speaker #2: So Jim, you're talking about off-takes from rarer concentrate suppliers, yeah?

Tom O'Leary: Dim, you are talking about off-takes from rare earths concentrate suppliers, yeah?

Speaker #5: Sorry, the other way, in terms of...

Dim Aryasinghe: Sorry, the other way. In terms of

Speaker #2: Oh, okay. So you're talking about off-takes of refined rare earth oxides from our refinery?

Tom O'Leary: Oh, okay.

Dim Aryasinghe: Yeah.

Tom O'Leary: You are talking about off-takes of refined rare earth oxides from our refinery?

Speaker #5: Correct. Yeah.

Dim Aryasinghe: Correct. Yeah.

Speaker #2: Yeah. Okay. Look, as I've kind of alluded to in the past, a couple of things really: as we get closer to commissioning and operational steady-state production, and having material on the ground, I think our negotiating position—our credibility—increases.

Tom O'Leary: Yeah. Okay. Look, as I have kind of alluded to in the past, a couple of things really. As we get closer to commissioning and operational steady state production and having material on the ground, I think our negotiating position, our credibility increases pretty dramatically. The other thing to bear in mind is that the overall context for rare earths geopolitically and as a consequence, from a supply security perspective, that is only improving from our perspective and deteriorating from a global perspective. So, I think as time goes by, our position improves. We needed to put in place an arrangement, as we have disclosed, satisfactory to government to unlock the funding, and we have done that with a relatively small volume.

Speaker #2: Pretty dramatically. The other thing to bear in mind is that the overall context for rare earths, geopolitically and as a consequence from a supply security perspective, that's only improving from our perspective and deteriorating from a global perspective.

Speaker #2: So, I think as time goes by, our position improves. We needed to put in place an arrangement, as we've disclosed, satisfactory to government to unlock the funding, and we've done that.

Speaker #2: With a relatively small volume. And we're very much open to locking in further volumes, but only bearing in mind those couple of factors I mentioned.

Tom O'Leary: We are very much open to locking in further volumes, but only bearing in mind those couple of factors I mentioned and recognizing that the products we will be producing are highly sought after and are not being produced reliably in meaningful quantities in the West at the moment. Particularly, I am referring to the heavy rare earths. So we are very much open to entering into arrangements, but they need to recognize those factors and be on attractive terms.

Speaker #2: And recognizing that the products we will be producing are highly sought after and are not being produced reliably in meaningful quantities in the West at the moment—particularly, I'm referring to the heavy rare earths.

Speaker #2: So we're very much open to entering into arrangements, but they need to recognize those factors and be on attractive terms.

Dim Aryasinghe: Understood. Just maybe on the working cap piece, so you guys have been pretty transparent on and disciplined on capital allocation with Eneabba recently, but how do you see that working capital piece evolve given what are happening with reagent prices, as an example? Is there any risk to the upside there or any broader comments you would share?

Speaker #5: Understood. And just maybe on the working cap piece—so, you guys have been pretty transparent and disciplined on capital allocation with any other recently—but how do you see that working capital piece evolving, given what is happening with reagent prices, as an example?

Speaker #5: Is there any risk to the upside there, or any broader comments you can share?

Speaker #2: Yeah, so I'll hand over to Dell in a moment. But just to remember—and we've disclosed it in the pack as well—that the remaining equity contribution from Iluka is expected over '27 and '28.

Tom O'Leary: Yeah. So I will hand over to Adele in a moment, but just to remember that, and we have disclosed it in the pack as well, that the remaining equity contribution from Iluka is expected over 2027 and 2028. That contemplates, in part, the working capital requirements of the early years. But Adele, to you.

Speaker #2: And that contemplates, in part, the working capital requirements of the early years that Adele’s been on it.

Speaker #3: Yeah. It's a riddle, as you can imagine. We keep a very close eye on our working capital requirements. We're confident in the assumptions underpinning those expected funding needs.

Adele Stratton: Yeah. Rahul, as you can imagine, we keep a very close eye in terms of the working capital requirements. We are confident in terms of our assumptions underpinning those expected funding needs. Obviously, you are referring to the sulfuric acid price increases. We obviously do use that along with the nitric acid and other reagents. But yeah, we remain confident in terms of the working capital that we have allocated, and we keep it under close monitoring. To Tom's point, we are commissioning next year, and so you will be starting to bring in those reagents in six to nine months' time.

Speaker #3: Obviously, you're referring to the sulfuric acid price increases. We do use that along with nitric acid and other reagents. But yes, we remain confident in terms of the working capital that we've allocated, and we keep it under close monitoring, to Tom's point.

Speaker #3: We're commissioning next year, and so you'll be starting to bring in those reagents in six to nine months' time.

Speaker #5: Yeah. Okay. Okay. Cool. Okay. Thanks.

Dim Aryasinghe: Yep. Okay, cool. Okay, thanks.

Speaker #1: Thank you. Your next question comes from Austin Young from Macquarie. Please go ahead.

Operator: Thank you. Your next question comes from Austin Yun, from Macquarie. Please go ahead.

Speaker #5: Morning, Tom and team. Yeah, most of my questions have been asked. Maybe just one follow-up on Ferranote. Tom, you mentioned that it seems like you prefer to have more time to look at a project to work on the challenges at the SEAL and improve the mother recipe.

Austin Yun: Morning, Tom and team. Yeah, most of my question has been asked. Maybe just one follow-up on Balranald. Tom, you mentioned that it seems like you prefer to have more time to look at a project, to work on the challenges at the seal, improve the mud recipe. Just keen to understand, it sounds like this whole project will be in the ramp-up for the remaining of this calendar year. Would just like to have some color on how should I think about 2027. Should we anticipate Balranald to get close to the target production rate or run rate in calendar year 2027? Thank you.

Speaker #5: I just came to understand—it sounds like this whole project will be in ramp-up for the remainder of this calendar year. I would just like to have some color on how we should think about 2027?

Speaker #5: Should we anticipate Ferrano to get close to the target production rate, or run rate, in calendar year '27? Thank you.

Speaker #2: Yeah. Thanks. Thanks, Austin. That's a good opportunity to clarify that, yeah, that's certainly our expectation that we're going to be getting to those rates for calendar '27, '27.

Tom O'Leary: Yeah, thanks, Austin. It is a good opportunity to clarify that. Yeah, that is certainly our expectation that we are going to be getting to those rates for calendar 2027.

Speaker #5: Okay. Cool. Thank you. Second one, if I may—just on any other, yeah, the project is in execution, and are you still targeting commissioning in 2027?

Austin Yun: Okay, cool. Thank you. Second one, if I may, just on Eneabba. Yeah, the project is in execution and you are still targeting commissioning in 2027. Yet we are still working with quite broad ranges of different scenarios. Just keen to understand, how should you think about the kind of key milestones that when we should anticipate a more concrete production profile, or do I need to just work with all three different scenarios until six months into the commissioning? Thank you.

Speaker #5: Yet, we're still working with quite broad ranges of different scenarios. I just wanted to understand how should we think about the key milestones for when we might anticipate a more concrete production profile, or do we need to continue working with all three different scenarios until six months into the commissioning?

Speaker #5: Thank you.

Speaker #2: Yeah. What we've disclosed in the pack today, a scenario showing Ennio, plus Bell, Reynolds, and that's probably a pretty reasonable estimate for the, certainly, the operation in '27.

Tom O'Leary: Yeah. We have disclosed in the pack today a scenario showing Eneabba plus Balranald, and that is probably a pretty reasonable estimate for certainly the operation in 2027 and probably a good deal of 2028 as well. Beyond that, I think the opportunity for different feeds is much more open.

Speaker #2: And probably a good deal of '28 as well. Beyond that, I think the opportunity for different feeds is much more open.

Speaker #5: Okay. Thank you, Tom. I'll pass that on.

Austin Yun: Okay. Thank you, Tom. I will pass it down.

Speaker #2: Thanks, Austin.

Tom O'Leary: Thanks, Austin.

Speaker #1: Thank you. Your next question comes from Chen Zhang from Bank of America. Please go ahead.

Operator: Thank you. Your next question comes from Chen Zheng from Bank of America. Please go ahead.

Chen Zheng: Morning, Tom and Adele. Thank you for taking my questions. Two questions from me on rare earths, please. Firstly, for your Wimmera project, just checking if Iluka is still on the right track to provide the DFS, including the CapEx detail, by end of this year, which is in 3 to 4 months' time, as Iluka previously announced. Also for this Wimmera project, do you consider it as a mineral sands project, or it is a rare earths concentrate or upstream project? If there is any color you can share with us how Iluka is going to fund if this is a mineral sands project. Thank you. I have another one after this.

Chen Jiang: Morning, Tom and Adele. Thank you for taking my questions. Two questions from me on rare earths, please. Firstly, for your Wimmera project, just checking if Iluka is still on the right track to provide the DFS, including the CapEx detail, by end of this year, which is in 3 to 4 months' time, as Iluka previously announced. Also for this Wimmera project, do you consider it as a mineral sands project, or it is a rare earths concentrate or upstream project? If there is any color you can share with us how Iluka is going to fund if this is a mineral sands project. Thank you. I have another one after this.

Speaker #4: Morning, Tom and Adele. Thank you for taking my questions. Two questions from me on rare earths, please. So firstly, for your Waymora project, just checking if Iluka is still on track to provide the DFS, including the capex detail, by the end of this year, which is in three to four months' time, as Iluka previously announced.

Speaker #4: And also, for this Waymora project, do you consider it as a mineral sands project, or is it a rare earth concentrate or upstream project? And if there is any color you can share with us on how Iluka is going to fund this if it is a mineral sands project?

Speaker #4: Thank you. I have another one after this.

Speaker #2: Yeah, thanks, Chen. In the quarterly, we actually talked about the Waymora DFS being first half '27 rather than the end of this year.

Tom O'Leary: Yeah. Thanks, Chen. In the quarterly, we actually talked about the Wimmera DFS being H1 2027, rather than the end of this year. So that is what we are targeting now. The other question was really whether we see it as a rare earths or a mineral sands project. We actually declared a re-

Speaker #2: So that's what we're targeting now. The other question was really whether we see it as a rare earth or mineral sands project. We actually declared a

Chen Zheng: As well. Yes, sorry. Yes.

Chen Jiang: As well. Yes, sorry. Yes.

Speaker #4: Yeah. Sorry. Yes. Yeah. Yeah.

Tom O'Leary: Funding as well.

Chen Zheng: Yeah.

Chen Jiang: Yeah.

Tom O'Leary: Yes. Thank you. On the rare earths and mineral sands, it has obviously got both attributes, but we declared a reserve a few years ago based on the rare earths side of it. I think it would be a challenging project to develop on the base of mineral sands without certainty about the outcomes for rare earths. I think it is fair to say we are probably seeing it more as a rare earths project than a mineral sands project. But yes, quite obviously it has got attributes, both. In terms of funding, it obviously would be a very material capital expenditure. I think that is one we would only embark on once we are a little further down the track in terms of the Eneabba refinery and having that commissioned and working well. So, I think the outlook is going to be quite different at that point.

Speaker #2: Yeah, that was the third part. Thank you. So, on the rare earth and mineral sands, it's obviously got both attributes, but we declared a reserve a few years ago based on the rare earth side of it.

Speaker #2: I think it would be a challenging project to develop on the base of mineral sand, without certainty about the outcomes for rare earth. I think it's fair to say we're probably seeing it more as a rare earth project than a mineral sand project, but yeah, as quite obviously, it's got attributes.

Speaker #2: But in terms of funding, look, it obviously would be a very material capital expenditure. I think that's one we would only embark on once we were a little further down the track in terms of any other refinery.

Speaker #2: And having that commissioned and working well, I think the outlook is going to be quite different at that point. But the beauty of any other monazite stockpile is that it provides us tremendous flexibility in terms of when we would feel a need to press the button on a project like Waymora. The other beauty of the feedstock supply arrangements we've entered into is that the refinery provides us the ability to give others a market for their projects, and the BHM deal is obviously an example of that.

Tom O'Leary: But the beauty of the Eneabba monazite stockpile is that it provides us tremendous flexibility in terms of when we would feel a need to press the button on a project like Wimmera. The other beauty of the feedstock supply arrangements we have entered into is that the refinery provides us the ability to give others a market for their projects, and the VHM deal is obviously an example of that. So in some circumstances, it might be that others would spend the capital, and we would process the material. So again, the context we are in provides a lot of flexibility around the timing of Wimmera.

Speaker #2: So, in some circumstances, it might be that others would spend the capital and we'd process the material. So, again, the context we're in provides a lot of flexibility around the timing of Waymora.

Speaker #4: Your understanding. Thanks for the color. So, just to summarize, it seems to me to make economic sense, this—Waymora is more like a rare earth upstream project.

Chen Zheng: Sure, understand. Thanks for the color. Just to summarize, it seems to me, to make economic sense, Wimmera is more like a rare earth upstream project with CapEx to be announced with the DFS. I am just checking what is the delay in the DFS from end of this calendar year to next year?

Chen Jiang: Sure, understand. Thanks for the color. Just to summarize, it seems to me, to make economic sense, Wimmera is more like a rare earth upstream project with CapEx to be announced with the DFS. I am just checking what is the delay in the DFS from end of this calendar year to next year?

Speaker #4: With CAPEX to be announced with the DFS, I'm just checking, what's the delay in the DFS from the end of this calendar year to next year?

Speaker #2: Yeah. Look, it's an important project, so we're making sure that we evaluate all of the aspects of that carefully.

Tom O'Leary: Yeah. Look, it is an important project, so we are making sure that we evaluate all of the aspects of that carefully.

Speaker #4: Okay. All right. Thank you. And then, just the second one, sorry. On the rare earth phase talk—so again, for the rare earth phase talk, from other states like Balranald in New South Wales, Wimmera in Victoria, and your third-party Lindian from Africa, I'm just thinking, have you got any exceptions to transport, or is that in your base case that you're considering, to transport radioactive rare earth concentrate from other states to the refinery and back, with the residuals or the tailings back to the producing states or producing country according to the regulation, Class 7?

Chen Zheng: Okay. All right. Thank you. Then, just second one. Sorry. On the rare feedstock. Again, for the rare feedstock from other states like Balranald in New South Wales, Wimmera in Victoria, and your third party, Lynas Dam from Africa. I am just thinking, have you got any exemption to transport, or is that in your base case, that into your consideration to transport radioactive rare earth concentrate from other states to the refinery in WA? Do you have to send back the residues or the tailings back to the producing states or producing country according to the regulation Class VII? Thank you.

Chen Jiang: Okay. All right. Thank you. Then, just second one. Sorry. On the rare feedstock. Again, for the rare feedstock from other states like Balranald in New South Wales, Wimmera in Victoria, and your third party, Lynas Dam from Africa. I am just thinking, have you got any exemption to transport, or is that in your base case, that into your consideration to transport radioactive rare earth concentrate from other states to the refinery in WA? Do you have to send back the residues or the tailings back to the producing states or producing country according to the regulation Class VII? Thank you.

Speaker #4: Thank you.

Speaker #2: Yeah. Just in terms of the waste products from the refinery, we have all environmental approvals in place to permanently dispose of those waste products on site, so no, we're not going to be taking material from anywhere else or taking any other waste material.

Tom O'Leary: Yeah. Just in terms of the waste products from the refinery, we have all environmental approvals in place to permanently dispose of those waste products on-site at Eneabba. So no, we are not going to be taking material anywhere from Eneabba, any waste material. I am not sure. Does that answer all the questions? It does? Yeah, I think so. Yeah.

Speaker #2: I'm not sure—does that answer all the questions? It does? Yeah, I think so. Yeah.

Speaker #4: Yeah. So, do you think there’s no limitation for you to transport? Because for rare earth concentrate from mineral sand, as a byproduct, the radioactives like uranium, thorium is pretty high.

Chen Zheng: Yeah. So you think there is no limitation for you to transport, because for rare earth concentrate from mineral sand, as a by-product, the radioactive, like uranium, thorium, is pretty high. So there is no limitation for you to transport among different states to WA for your internal feedstock?

Chen Jiang: Yeah. So you think there is no limitation for you to transport, because for rare earth concentrate from mineral sand, as a by-product, the radioactive, like uranium, thorium, is pretty high. So there is no limitation for you to transport among different states to WA for your internal feedstock?

Speaker #4: So there's no limitation for you to transport among different states to WA for your phase talk, for your internal phase talk?

Speaker #2: Yeah. Okay. So you’re talking about transport of—

Tom O'Leary: Yeah, okay. So you are talking about transport of the feedstock to Eneabba as well?

Speaker #1: The feed to any other as well. And yeah, yeah, yeah, yeah.

Chen Zheng: Yeah.

Chen Jiang: Yeah.

Tom O'Leary: And yeah.

Chen Zheng: As well as the residual. Yeah.

Chen Jiang: As well as the residual. Yeah.

Tom O'Leary: Yeah.

Chen Zheng: Because there are two things.

Chen Jiang: Because there are two things.

Speaker #2: So firstly ,

Tom O'Leary: Yeah.

Chen Zheng: Firstly is to transport

Chen Jiang: Firstly is to transport

Speaker #1: Yeah .

Tom O'Leary: Yeah

Chen Zheng: feedstock from other states to WA, and another thing is, I think according to regulation, you have to send back the radioactive residues to the producing place.

Chen Jiang: feedstock from other states to WA, and another thing is, I think according to regulation, you have to send back the radioactive residues to the producing place.

Speaker #2: From other states to WA. And another thing is, I think according to a regulation, you have to send back the radioactive residuals to the producing place.

Speaker #1: Yeah . No I just to be clear on the transport of feedstocks to Eneabba We're we're very comfortable with our ability to get approvals to , to move that product to the refinery , remembering that at a concentrate level , it's very , very , very low concentrations of any of the the products you mentioned the uranium and thorium and so on .

Tom O'Leary: Yeah. No. Just to be clear, on the transport of feedstocks to Eneabba, we are very comfortable with our ability to get approvals to move that product to the refinery. Remembering that at a concentrate level, it is very low concentrations of any of the products you mentioned, uranium, thorium, and so on.

Speaker #3: Yeah . So , you know , just in terms of let's use bulk Reynolds as an example , we transport heavy mineral concentrate all around Australia .

Adele Stratton: Yeah. Chen, just in terms of, let us use Balranald as an example, we transport heavy mineral concentrate all around Australia currently. It is no different to Balranald, in terms of our normal business. This is business as usual for Iluka.

Speaker #3: Currently, there's no difference to Val Reynolds, you know, in terms of our normal business. So this is business as usual for Iluka.

Speaker #2: Okay. Great to hear, because I'm just concerned about those uranium, thorium content, transportation amount stays in Australia. And I think according to regulations, like you've got to send back.

Chen Zheng: Okay, great to hear. Because I am just concerned of those uranium and thorium content, transportation among states in Australia, and then I think according to regulations, you have got to send them back, but-

Chen Jiang: Okay, great to hear. Because I am just concerned of those uranium and thorium content, transportation among states in Australia, and then I think according to regulations, you have got to send them back, but-

Speaker #3: But yeah , we . Yeah , no , we transport heavy mineral concentrate all around the country today . So , you know , from Jacynthe Ambrosia and South Australia .

Adele Stratton: Yeah. No, we transport heavy mineral concentrate all around the country today. From Jacinth-Ambrosia in South Australia, the Balranald material is on its way in H2, the HMC from New South Wales. All of that is part of our normal project approval. So yeah, there are no concerns there, Chen.

Speaker #3: You know , the Balranald material is on its way in the second half . The HNC from New South Wales . So you know , all of that is part of our normal project approval .

Speaker #3: So, yeah, there are no concerns there.

Speaker #2: Yeah . Thank you for your thanks , Tom . And Adele . I'll pass it on .

Chen Zheng: Yeah. Thank you for your clarification, Adele. Thanks, Tom and Adele. I will pass it on.

Chen Jiang: Yeah. Thank you for your clarification, Adele. Thanks, Tom and Adele. I will pass it on.

Speaker #1: Thanks , Jim .

Tom O'Leary: Thanks, Chen.

Speaker #4: Thank you. Your next question comes from Matt Hope. Please go ahead.

Operator: Thank you. Your next question comes from Matt Hope from Ord Minnett. Please go ahead.

Speaker #5: Hi . Yeah , thanks . As you mentioned , Tom , some others who are going to provide you with offtake for Eneabba are putting a lot of capital .

Matt Hope: Yeah. Thanks. As you mentioned, Tom, some others who are going to provide you with offtake for Eneabba are putting out a lot of capital. I was just wondering, who decides when that material arrives? VHM and Wolverine, for instance, if you are still ramping up and using Eneabba and Balranald, do you have to take that feed, when it is supplied and, obviously pay the suppliers or how does that work?

Speaker #5: I was just wondering who decides when that material arrives . So , you know , BHM and Wolverine , for instance , if you're still ramping up and using Eneabba and Al Reynolds , do you have to take that feed when it's supplied and obviously pay the suppliers ?

Speaker #5: Or how does that work?

Speaker #1: Yeah , look , all of the all of the supply arrangements are , are individually negotiated . So they're all slightly different terms , but the , the , I think probably as good a guide as any , in short , is that we , we have obligations to take and pay for that material when it's delivered .

Tom O'Leary: Yeah. Look, all of the supply arrangements are individually negotiated, so they are all slightly different terms. I think probably as good a guide as any, in short, is that we have obligations to take and pay for that material when it is delivered. Not precisely when it is delivered in terms of working capital and so on. But yeah, when it is available and ready to be shipped to us, it is shipped to us, and we will pay for it the normal course.

Speaker #1: Not , not , not precisely when it's delivered in terms of , you know , working capital and so on , but but yeah , when it's when it's available and ready to be shipped to us , it is shipped to us .

Speaker #1: And we'll pay for it in the normal course.

Speaker #5: Okay . Thank you . And then just in terms of , so some of the agreements have upside , you know , sharing , upside , sharing arrangements .

Matt Hope: Okay. Thank you. Then just in terms of, so some of the agreements have upside sharing arrangements. Are you planning to sort of pay a base rate and then when you find out what the actual level the material is sold at, then you upscale potentially the payment? Is that how it would work?

Speaker #5: So are you planning to sort of pay a base rate ? And then when you find out what the , the actual level , the material is sold at , then you , you know , upscale , potentially the payment , is that how it would work ?

Speaker #1: Yeah . Again , each of the , each of the contracts is heavily negotiated around those sorts of terms . But that is the , the principle that that we tend to apply in that , you know , we're not providing a , you know , a forecast of what price we're going to be able to get for particular products for the benefit of those suppliers .

Tom O'Leary: Yeah. Again, each of the contracts is heavily negotiated around those sorts of terms. But that is the principle that we tend to apply in that, we are not providing a forecast of what price we are going to be able to get for particular products for the benefit of those suppliers. They are going to get a price for their concentrate, which kind of reflects the sort of price that we are able to achieve in the market with a payability percentage and so on applied to it. So that is broadly how it works. There is a level of confidence in our ability to get attractive pricing in the market. That confidence is based on our historic track record in mineral sands marketing, I think to some extent. Obviously our interests are very, very aligned with the interests of our concentrate suppliers.

Speaker #1: They are they're going to get a , a , a price for their concentrate , which kind of reflects the sort of price that we're able to achieve in the market , you know , with a payability percentage and so on applied to it .

Speaker #1: So that's broadly how it works. You know, there's a level of confidence in our ability to get attractive pricing in the market.

Speaker #1: And that confidence is based on our historic track record in mineral Sands marketing . I think to , to some extent and , and obviously , our interests are very , very aligned with the interests of our of our concentrate suppliers .

Speaker #1: We want to achieve the very , very best price . We can for their product . And , and that that gives a that gives a , a good outcome for both us and our supplier .

Tom O'Leary: We want to achieve the very, very best price we can for their product. That gives a good outcome for both us and our supplier.

Speaker #5: Okay , thanks . And just one last question . If I could , on slide 22 , you have a third chart there with HR plus yttrium .

Matt Hope: Okay, thanks. Just one last question, if I could. On slide 22, you have a third chart there with HRE plus yttrium. I was just wondering what exactly is that showing? Because you have no, as I understand it, you have no plans to produce yttrium. Is this something that you are planning to sell to others? If so, who? Is it China?

Speaker #5: I was just wondering, what exactly is that showing? Because you have no— As I understand it, you have no plans to provide or produce yttrium.

Speaker #5: Is this something that you're planning to sell to others? And if so, who is it? China.

Speaker #1: Yeah . Look , we're we're going to be selling a a mix of of products which include yttrium , you know , obviously we're going to have a look at our , our assemblage .

Tom O'Leary: Yeah. Look, we are going to be selling a mix of products, which include yttrium. Obviously, we are going to. If you have a look at our assemblage, and we have very high assemblage of yttrium, particularly some of the more heavy dominant feeds are very, very high in terms of yttrium content. So we are going to be producing yttrium, as you can see on the following slide 23, we are producing that yttrium as part of a mixture, in a carbonate form. As the refinery is currently configured, we will be selling that heavy rare earth plus yttrium mix as a carbonate. We have flagged the potential on slide 23 there at some stage in the future. We may add the capability to separate that yttrium out and then produce an yttrium oxide, in a separate form.

Speaker #1: And we've got a very high assemblage of yttrium, particularly some of the more heavies. Dominant feeds are very, very high in terms of yttrium content.

Speaker #1: So, we are going to be producing yttrium. And as you can see on the following slide, slide 23, we're producing yttrium as part of a mixture in a carbonate form.

Speaker #1: And as the refineries are currently configured, we'll be selling that heavy rare earth plus yttrium mix as a carbonate. You know, we've flagged the potential on slide 23 there at some stage in the future.

Speaker #1: You know , we may add the capability to separate that yttrium out and then , you know , and then produce a , an yttrium oxide in a separate form .

Speaker #1: So that's a potential for the future . But certainly at the moment we're , we're looking to sell the heavy rare earth and yttrium carbonate mixture to , you know , the there are players in the West who are very , very anxious to get supply of that material in that form for separation .

Tom O'Leary: So that is a potential for the future, but certainly at the moment, we are looking to sell the heavy rare earth and yttrium carbonate mixture. There are players in the West who are very, very anxious to get supply of that material in that form for separation, so we are engaging with those extensively.

Speaker #1: And so we're engaging with those extensively.

Speaker #5: Okay, thanks very much, Tom.

Matt Hope: Okay. Thanks very much, Tom.

Speaker #1: Thank you

Tom O'Leary: Pleasure.

Speaker #4: Thank you. Once again, to ask a question, please press star one. Your next question comes from Paul Young from Goldman Sachs.

Operator: Thank you. Once again, to ask a question, please press star one. Your next question comes from Paul Young from Goldman Sachs. Please go ahead.

Speaker #4: Please go ahead

Speaker #6: Yeah . Hi again , Tom , actually , to follow up from that last question on on the carbonate , which I know it's always been the plan just to not to put the cart before the horse too much here .

Paul Young: Yeah. Hi again, Tom. Actually, just follow up from that last question on the carbonate, which I know it's always been the plan just to, not to put the cart before the horse too much here, really ahead of commissioning. The carbonate, as far as carbonate sale is concerned, should we be thinking that, as far as those Western players are concerned, process, it's a very small group, maybe only one or two. Is the plan there to send that carbonate to France? Is that the base case?

Speaker #6: You know , it really ahead of commissioning . But the carbon as far as carbonate sales is concerned , should we be thinking that you know , as far as those Western players are , can process .

Speaker #6: I mean , it's a very small group . Maybe only 1 or 2 is the plan there to to send that carbonate to France ?

Speaker #6: Is that the— is that the base case?

Tom O'Leary: Well, it's probably more than one or two, Paul, but I wouldn't want to be more specific about where that might go, at this point.

Speaker #1: Yeah, it's probably more than one or two, Paul, but you know, I wouldn't want to be more specific about where that might go at this point.

Speaker #6: Okay . And then Tom , a question on just mineral sands CapEx and how you think about that . You've been pretty clear about Wimmera , and it's pretty prudent to start spending on Wimmer .

Paul Young: Okay. Tom, a question on just mineral sands, CapEx, and how you think about that. You've been pretty clear about Wimmera, and it's pretty prudent to only start spending on Wimmera, I think, when Eneabba is free cash flow positive and Balranald is fully ramped up. I would've thought. So I think that's pretty prudent. You've got flexibility with VHM, as you said. So you've got many permutations and you've actually got that decisions in, the ability to make those decisions around spending on mineral sands, projects, et cetera, including Wimmera. Can I just talk about J-A specifically, actually, in that context and actually more specifically on Typhoon where I see you've submitted to the federal permitting process, the permit there for Typhoon to start up, I think 3Q next year. Can you just remind how that decision's going on Typhoon?

Speaker #6: I think when any app is free , cash flow positive and , you know , Bahrain is , you know , fully ramped up , I would have thought so .

Speaker #6: I think that's pretty prudent . You've got flexibility with Vgm , as you said . So you've got many permutations and , you know , you've actually got that decisions in the ability to make those decisions around spending on mineral sands projects , etc.

Speaker #6: , including Wimmera . Can I just talk about Jay specifically ? Actually , in that context and actually more specifically on typhoon , where I see you've submitted to the Federal permitting process at the permit there for typhoon for start up , I think three or first spend three .

Speaker #6: Q next year , can you just remind us how that decision is going on ? Typhoon . And its capital light extends . Jay by a couple of years , but just the timing around the the FID on typhoon and maybe give us some some CapEx guidance on that project

Paul Young: I know it's capital light, extends J by a couple of years, but just the timing around the FID on Typhoon and maybe give us some CapEx guidance on that project.

Speaker #1: Yeah . Look , thanks , Paul . Very observant of you to pick that up . The yeah , the , the way we're thinking about typhoon is , as you've indicated , it's still the same .

Tom O'Leary: Yeah. Look, thanks, Paul. That's very observant of you to pick that up. The way we're thinking about Typhoon is, as you've indicated, it's still the same. We're treating that more as a mine move rather than a significant development to the new precinct, as you'd expect. It's not to say that it's an easy decision, though. And there will be some capital involved, obviously. And there are some things we need to tick off from an environmental perspective and others. Look, we expect to be in a position at the end of this year to make a decision there. And we expect to be talking about it early next year.

Speaker #1: It's , you know , we're treating that more as a , a mine move rather than a , you know , significant development to the new precinct as you'd expect , you know , it's not to say that it's an easy decision , though .

Speaker #1: And , you know , there will be some some capital involved , obviously , and there are some some things we need to tick off from an environmental perspective .

Speaker #1: And , and others . So look , you know , we , we expect to be in a position at the end of this year to , to make a decision there .

Speaker #1: And so we expect to be talking about it early next year.

Speaker #6: Okay. Just confirming, the CapEx on that project will probably fall into the second half of next year, in that case, it sounds like.

Paul Young: Okay. Just confirm the CapEx on that project will fall into probably, in that case, H2 of next year, it sounds.

Speaker #3: Yeah . That's right . Paul . And you know , to Tom's point , think of it like a mine move . So , you know , the capital required is very CapEx light .

Adele Stratton: Yeah, that's right, Paul. And to Tom's point, think of it like a mine move. So you know that capital required is very CapEx light. It's not a new mineral sands development.

Speaker #3: It's not, you know, a new or some development.

Speaker #6: Yeah, understood. Okay. Thanks very much.

Paul Young: Yeah, understood. Okay, thanks very much.

Speaker #7: Thanks , Paul .

Tom O'Leary: Thanks, Paul.

Speaker #4: Thank you. Thank you. There are no further questions. I'll hand back to Tom O'Leary for closing remarks.

Operator: Thank you.

Tom O'Leary: Thank you.

Operator: There are no further questions. I will hand back to Tom O'Leary for closing remarks.

Speaker #1: Okay . Look , thanks for joining the call . This morning . Again , I'd encourage you to have a look at the video .

Tom O'Leary: Okay. Look, thanks for joining the call this morning. Again, I would encourage you to have a look at the video if you have not seen it on the website, and I look forward to engaging with shareholders in coming days. Thanks again.

Speaker #1: If you haven't seen it on the website . And and I look forward to engaging with , with shareholders in coming days . Thanks again

Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.

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