ILUKA RESOURCES LIMITED — Capital/Financing Update 2003

Apr 21, 2003

Consolidated Rutile Limited A.B.N. 28 009 719 902

ANNOUNCEMENT TO THE AUSTRALIAN STOCK EXCHANGE

17 April 2003

SPECIAL DIVIDEND, EQUITY RAISING AND MARCH 2003 OUARTERLY PRODUCTION AND ACTIVITY REPORT

$1.0₁$ SPECIAL DIVIDEND

CRL has for some time been seeking ways to pass on to Shareholders the benefit of approximately \$80 million in franking credits that have arisen as a result of past activities.

Towards this aim, the CRL Board has declared a fully franked special dividend of 23 cents per fully paid share, with a record date of 1 May 2003 and payable on 13 May 2003. The total amount of the dividend is approximately \$39.8 million.

Subject mainly to the success of the current proposal (including the equity raising referred to below) and provided future circumstances do not dictate otherwise, the Board will seek to release the remainder of the franking credit value to all Shareholders.

$2.0$ EQUITY RAISING

The Board has resolved to offer existing shareholders the opportunity to participate in a non-renounceable Rights Issue on the basis of 6 new shares for every 13 shares held at 5.00pm (EST) on 1 May 2003. The Issue will be at a price of 50 cents per share and will raise up to \$40.0 million, with up to 79.9 million new shares being issued.

CRL has entered into an agreement with its two major shareholders (Iluka and QBE who currently hold 80% of the Company's shares) pursuant to which Iluka and OBE agree to subscribe for 63.9 million shares, representing \$32.0 million in subscription monies.

Detailed information regarding the Rights Issue is contained in a Prospectus lodged with the Australian Securities and Investments Commission ("ASIC") and accompanying this announcement.

The Rights Issue will be used to fund the special dividend noted above.

$3.0$ PRODUCTION - OUEENSLAND OPERATIONS

	Quarter 1 2003	Quarter 1 2002
-tonnes	14,134	14,146
-tonnes	29,416	20,672
-tonnes	9,767	9,989

4.0 FINANCIAL RESULTS

CRL's revenue, capital and exploration/evaluation expenditure for the March quarter is summarised in the following table.

	Quarter 1 2003 A\$M	Quarter 1 2002 A\$M
Sales Revenue	13.2	19.7
Capital expenditure	0.7	0.3
Exploration and evaluation expenditure capitalised	0.9	0.6

Notes

1-all revenues shown are net of hedging

2-all financials remain subject to audit confirmation

Sales revenue was lower in the current quarter compared with the corresponding period in 2002 as a result of the timing of shipments. CRL expects to remain fully sold for rutile and zircon in 2003.

$5.0$ ENTERPRISE PROJECT, NORTH STRADBROKE ISLAND

The Definitive Feasibility Study underpinning plans to mine the Enterprise deposit is scheduled to be completed within the next month. The total cost of plant upgrades and support equipment for the commencement of mining in Enterprise is expected to be approximately \$20 million.

COMPANY HOUSING SALES $6.0$

The sale of company houses on North Stradbroke Island commenced in November 2002 and, to date, sales proceeds of \$5 million have been recognised (\$0.8 million in 2002).

Dager Smith

DARREN SMITH COMPANY SECRETARY