By Bridget McArthur,Piper Duffy
Copyright abc
A mining giant will halt a significant portion of its West Australian operations amid subdued market demand.
From December, Iluka Resources will suspend production activities at its Cataby mineral sands mine in the Midwest and one of two synthetic rutile processing kilns (SR2) in the South West.
The other kiln, SR1, has been offline since 2023.
Synthetic rutile is a high-grade titanium dioxide product used as a pigment, popularised for its traits as a non-toxic whitener with UV and chemical resistance.
It is commonly used in house and car paints, laminates, plastic pipes and packaging, inks, clothing, sunscreen, toothpaste and make-up.
Iluka Resources said demand for the pigment and other mineral sands products had decreased.
It said it planned to restart production at SR2 about May next year and at Cataby about November, pending improved market conditions.
The company’s share price slipped by more than 13 per cent after the announcement, marking its largest intraday percentage fall since late March 2020.
Market downturn
Iluka Resources’ 2025 half-year report flagged a drop in synthetic rutile sales and price.
Southern Ports data showed total mineral sands exports through the Port of Bunbury, from which Iluka exported its synthetic rutile, decreased by more than 35 per cent between 2020 and 2024.
Resources analyst Tim Treadgold said it was the result of slowing construction rates in China, which had decreased demand for paint.
“China dramatically overbuilt apartments and commercial buildings and then they [were] forced to slow down,” Mr Treadgold said.
“Paint is the last product used in a construction project, so it’s taken [about three years] for the effects of the China slowdown to hit the paint market and therefore titanium dioxide.”
Mr Treadgold said it was not uncommon for mineral sands operations to be first on the chopping block when times were tough and reopen when prices picked up.
Hundreds of jobs in question
Iluka Resources head of sales Matthew Blackwell said some jobs would have to be cut at Cataby — though he could not give an estimate of how many.
About 330 people work at the mine, of whom about 200 are employed by an earthmoving contractor.
“We’re undertaking a review there to determine what resourcing will be required during the suspension,” Mr Blackwell said.
“Where it’s possible, we certainly make available appropriate employment transition and … support for those that may be impacted.”
Mr Blackwell said workers retained at Cataby would be involved in activities such as material handling, transport, asset maintenance and rehabilitation activities.
He said the company would do its best to redeploy workers not retained to other projects.
The Shire of Dandaragan, which covers Cataby, said it was unclear what would happen to local employees or the workers’ camp.
“At this point, we’re not aware whether [Iluka Resources] are transferring staff or they’re making staff redundant,” shire president Tony O’Gorman said.
“Change is always upsetting, especially when it’s unexpected change, so our thoughts are with [the workers].”
All jobs at the Capel-based kiln will be retained on site for the time being.
Capel shire president Doug Kitchen said it was welcome news in the community where Iluka Resources was a major employer.
