ILUKA RESOURCES LIMITED — Capital/Financing Update 2005

Jun 13, 2005

Notice to the Australian Stock Exchange

14 June 2005

DOUGLAS PROJECT UPDATE

Iluka Resources Limited wishes to advise that at the end of May 2005, the Douglas project was approximately 55% complete and cumulative expenditure was \$151 million. The overall project budget remains unchanged at \$270 million.

Further to Iluka's comments on the likely project completion dates at the AGM in mid-May, the Company has received an update from its EPC contractor, Roche Mining. Roche's latest advice on the completion dates associated with the Douglas project EPC contract (valued at approximately \$200 million) is as follows:

• 1. Wet Concentrator Plant full scale production of heavy mineral concentrate (HMC) by mid-August 2005 following the completion of commissioning activities.
• 1. Mineral Separation Plant mechanical completion by mid December 2005. Full scale production of rutile and zircon by March 2006 following the completion of commissioning activities.

Whilst the delays on the key EPC items are extremely disappointing, other aspects of the project (such as pre-strip and overburden removal activities and road and pipeline construction) have been completed as scheduled. Iluka is continuing to work closely with Roche to manage the overall project construction process and ensure that both safety and work quality are not compromised as a result of these delays.

The delays with the EPC items will not impact upon Iluka's recently upgraded 2005 earnings outlook. The recent upgraded earnings outlook did not include any contribution from the Murray Basin in 2005. In addition, the Company expects to be able to meet its sales commitments by sourcing product from its existing operations during late 2005 and early 2006.

Investment community & media contact:

Geoff Wedawood Mobile: 0409 997 256