ILUKA RESOURCES LIMITED — Capital/Financing Update 2005

Jan 12, 2005

Notice to the Australian Stock Exchange

13 January 2005

ILUKA AWARDS DOUGLAS PROJECT CONTRACTS FOR MINING AND ROAD TRANSPORT

Iluka Resources Limited is pleased to announce that it has awarded the mining and road transport contracts for the Douglas mineral sands project located in south-west Victoria.

The mining contract for the Douglas mine, situated 10km north of Balmoral has been awarded to Abigroup Contractors Pty Ltd. This contract is for an initial four year period and includes all of Iluka's surface mining requirements at the site.

The initial top soil stripping work commenced on site in December 2004 by local subcontractor P Miller Contractors Pty Ltd. Abigroup will commence mobilising to site mid January with full-scale mining operations beginning in early February.

The road transport contract has been awarded to Kalari Pty Ltd for a five year period and is subject to agreement of final terms of business. Kalari is a locally based company that will utilise its existing operating bases at Hamilton and Portland.

Road transport operations are scheduled to commence in Q3 2005. Kalari will transport the heavy mineral concentrate from the Douglas mine to the mineral separation plant in Hamilton and finished product to the Port of Portland for export to the Company's customers.

The next major milestones for the Douglas project are the commissioning of the wet concentrator plant at the Douglas mine in O2 2005, commissioning of the mineral separation plant in O3 2005 and production of finished product from the plant in O4 2005.

Investment Community & Media contact:

Geoff Wedawood Phone: +61 8 9360 4751 Mobile: 0409 997 256