Iluka Resources has notified investors that it expects to record about A$565 million of exceptional, pre-tax charges in its financial results for the year ended Dec. 31, 2025, subject to final audit and board sign-off.
The package of charges breaks down into a non-cash impairment of roughly A$350 million, predominantly associated with its mineral sands operations, plus an approximately A$215 million net realisable value adjustment to inventory.
Following the announcement, Iluka shares listed in Sydney fell steeply, sliding as much as 17% to A$5.36. By 01:54 GMT the stock was trading nearly 14% lower at A$5.58.
The company pointed to persistently weak demand across mineral sands and downstream product markets, with pigment demand singled out as a particular pressure on short-term price expectations. Those market dynamics underpinned earlier operational decisions: in September Iluka moved to suspend production at its Cataby mine and at synthetic rutile kiln 2 in Western Australia, effective from Dec. 1.
As a result of the suspension and updated assessments, Iluka will reduce Cataby’s remaining ore reserves by about 35%, which equates to an approximate 7% cut to the group’s total reserves. The company expects the revised life of the Cataby mine to be about four years once production recommences.
Separately, Iluka said its underlying mineral sands earnings before interest, tax, depreciation and amortisation - EBITDA - is forecast to be around A$300 million, before accounting for the exceptional items noted above.
Key points
- Iluka will report around A$565 million of exceptional pre-tax charges for the year to Dec. 31, 2025, pending audit and board approval.
- The charges comprise a roughly A$350 million non-cash impairment and about A$215 million of inventory write-down.
- Market reaction was sharp, with the stock trading down as much as 17% intraday; the company expects underlying mineral sands EBITDA of about A$300 million before exceptional items.
Risks and uncertainties
- Continued weak demand for mineral sands and pigment products could further pressure near-term prices and financial results, affecting the minerals and downstream pigment sectors.
- Operational changes at Cataby, including a 35% reduction in remaining ore reserves and a shortened mine life of about four years on restart, introduce uncertainty for production volumes and reserve longevity in the company’s portfolio.
- The exceptional charges remain subject to audit and board approval; the final reported amounts could therefore differ from the preliminary estimates.
The information released by Iluka lays out the company’s assessment of current market conditions and their immediate financial consequences, while setting expectations for how its mineral sands business will perform before the exceptional items are applied.