JOHANNESBURG (miningweekly.com) – ASX-listed mineral sands miner Iluka seems to have recovered from its production dip in the previous quarter, reporting a production rate of 334 000 t for the three months to June, which is in line with the company’s full-year production guidance of about 660 000 t.

This was also a 20.8% year-on-year increase in the production of zircon, rutile and synthetic rutile, which Iluka attributed to highly encouraging demand for high-grade feedstock, including several customers bringing forward contracted volume.

“This is a positive indicator in terms of the potential for additional volumes in the second half, and in terms of conditions leading into 2017,” said the company.

Zircon demand, overall, remained consistent with 2015 levels and slightly ahead of Iluka’s first-half expectations. With this in mind, the company had advised customers of a $60/t increase in the Zircon Reference Price, which came into effect on July 1.

Iluka told shareholders that first-half production was, however, higher than sales, as sales volumes were expected to be weighted in the second half of the year.

The company’s total higher-value product sales of 316 000 t of zircon, rutile and synthetic rutile represented a 14.7% increase from the first half in 2015, with higher-aggregate  high-grade chloride feedstock sales, especially the sale of synthetic rutile, which was up 64.8%.

Iluka noted that rutile sales were in line with 2015 figures, reflecting Iluka’s approach to allocating volumes. Zircon sales were also similar to the first half of 2015.

Combined rutile and synthetic zircon sales in the first half of the year were 32.2% higher than the first half of 2015, while the total sales revenue for zircon, rutile and synthetic rutile increased by 3%.

This was associated with higher sales volumes, although it was largely offset by a greater weighting in the sales mix of synthetic rutile, as well as lower received US dollar prices for zircon period-on-period.

Total mineral sands revenue, meanwhile, which includes ilmenite and by-products, decreased by 3.2% to $338-million, compared with $350-million in the first half of 2015. This was largely associated with lower ilmenite sales, said Iluka, and reflected the use of internal ilmenite instead of upgrading to synthetic rutile and the phasing of planned chloride ilmenite sales in the second half of this year.

The overall cash cost of production, including ilmenite concentrate and by-product costs, declined by 19.8% period-on-period to $140.7-million, compared with $175-million spent in 2015.