PERTH (miningweekly.com) - Mineral sands miner Iluka Resources on Thursday reported a 30.5% drop in production volumes for the full year, as the company reduced output to match the declining demand environment.

Total mineral sands production for the year reached 811 800 t, compared with the 1.16-million tons produced in 2011.

Iluka said zircon production, in particular, was reduced progressively during the year, with the miner producing only 343 200 t of the product, a 42.9% decline on the previous calendar year.

The ASX-listed Iluka reduced production from its Jacinth-Ambrosia operation, as it mined lower-grade material for most of 2012, and processed less heavy mineral concentrate through its Narngulu mineral separation plant, in Western Australia.

The miner also deferred the processing of Jacinth-Ambrosia’s zircon-rich concentrate at the Hamilton mineral separation plant, in Victoria.

Rutile production for the 12 months to December was also 21.7% lower, at 220 300 t, with Iluka saying the lower production mainly reflected the planned move from three mining operations in the Murray basin to one mining operation, as well as the mine move from Kulwin to Woomack, Rownack, and Pirro, during 2012.

Synthetic rutile production, meanwhile, was down 13.1% on the previous calendar year, to 248 300 t. This decline reflected the operation of two of Iluka’s four synthetic rutile kilns during both years, with lower 2012 production mainly attributed to the decision to operate the largest of the two kilns at a lower throughput rate, from mid-year.

Iluka further reduced production by temporarily suspending a major part of the operational base during the Christmas and New Year period. This included idling the Virginia mining and processing operations, the Hamilton and Narngulu plants, and the mining operations at the Eneabba and the Tutunup South mines, in Western Australia.

Iluka on Thursday reported that sales volumes for the year were also down by 52.9%, at 488 900 t, generating a revenue of some A$1-billion, a 30.4% decline on the A$1.53-billion reported in 2011.

The lower sales revenue reflected the material reduction in the sale of the higher value products, such as zircon, rutile and synthetic rutile.

Sales volumes for the year reached 213 800 t of zircon, 105 500 t of rutile and 169 600 t of synthetic rutile. The miner also sold 443 200 t of ilmenite during the full year.

Looking ahead to 2013, Iluka was planning to return to higher-grade mining at Jacinth-Ambrosia to reduce unit cash costs at the operation. While this would increase the heavy mineral concentrate build at the site, it was considered “appropriate” in light of the reduction in zircon prices and the receipt of approvals from the South Australian authorities to accommodate higher heavy mineral concentrate storage volumes on site.

The Eneabba mining operation, meanwhile, would be idled from March, while various other operations would operate on a reduced roster.