PERTH (miningweekly.com) – Higher revenues have lifted mineral sands miner Iluka’s after-tax net profit for the six months ended June 30 to A$20.4-million, compared with A$11.7-million in the prior comparable period.

The company said the increased earnings reflected a lower exchange rate combined with lower depreciation charges.

Revenue from mineral sand sales for the first half of the year increased to A$349.6-million, compared with A$343.2-million in the prior comparable period, despite sales volumes having decreased by 0.4% year-on-year to 275 900 t.

Zircon sales increased by 4.9% year-on-year to 153 400 t, while combined rutile and synthetic rutile sales volumes reached 122 500 t, which was marginally lower than the 130 800 t reported in the first half of 2014.

This reflected scheduling of high-grade titanium dioxide sales during the six months, as some customers rebalanced their supply chains in line with the ramp-up of Iluka’s synthetic rutile production, which restarted in April.

Iluka noted that the higher revenue achieved for its zircon, rutile and synthetic rutile products reflected an increased average realised Australian dollar per tonne, owing to a lower exchange rate, offsetting marginally lower volumes and weighted average received US dollar sales prices.

Meanwhile, cash costs declined by 12.6% to A$175.5-million in the interim period, compared with the cash costs of A$200.7-million reported in the previous corresponding period, owing to the lower production of by-products and ilmenite concentrate.

Unit cash costs of production reached A$616/t, for zircon, rutile and synthetic rutile, excluding the by-product costs, which compared with the A$719/t reported in the first half of 2014. The lower unit cash costs also reflected higher production and the completion of mining at the Woomack, Rownack and Pirro operations, in the Murray basin.

Iluka MD David Robb said on Tuesday that production would be weighted towards the second half of 2015, following the safe, efficient and rapid reactivation of mining at the Tutunup South operation, and the subsequent restart of synthetic rutile Kiln 2, in the south-west of Western Australia.

The kiln has operated at a 99% utilisation rate and has delivered higher-than-budgeted volumes, Robb said, while displaying efficient unit cash costs performance.

“Iluka’s balance sheet remains strong, both absolutely and relative to many players in the resources sector, with low net debt and significant funding headroom. This enables Iluka to continue to invest in its business and to consider external investments in a countercyclical manner, where financial merit and strategic rationale are evident,” Robb said.

“In light of some demand recovery, but with lower cycle characteristics still evident in a number of industries, I consider the company has positioned itself appropriately and in line with its objective to create and deliver value to shareholders.”