luka Resources Ltd. shares fell the most since March 2020 after the miner said it would suspend mineral sands production and kiln operations at a project in Western Australia because of poor demand.
The Perth-based company’s shares dropped as much as 15% in early trading in Sydney, and were down 11% to A$5.76 a share at 10:53 a.m. local time. Iluka plans to put its Cataby mine on hold for a year, while its Synthetic Rutile Kiln will be suspended for about six months, from Dec. 1. Both can be restarted earlier should conditions improve, it said.
“This decision has been taken given subdued demand for mineral sands and their associated downstream products, particularly pigment,” Iluka said
in a statement Wednesday. “Lower levels of global economic activity continue to weigh on both the purchasing behavior of customers and their ability to forecast with certainty.”
Iluka holds sufficient inventories of synthetic rutile — a high-grade titanium dioxide product mainly used to make pigment — to satisfy customer requirements during the halt, it said.
“The suspension will enable inventory and cash liberation, cost savings and the preservation of balance sheet strength,” Iluka said. It will continue production at Jacinth Ambrosia in South Australia, while its new Balranald mine in New South Wales is still scheduled to start by the end of the year. Those projects have a product mix different to Cataby, it said.
